States to face cut in funds for missing targets under UDAY 2.0: Minister

New Delhi: The Centre has proposed reduction in power sector funds of the states that would not maintain performance benchmarks set under the second version of UDAY scheme, which is at the draft stage, Power Minister R K Singh said on Wednesday.

The government plans the second wave of reforms in the power distribution sector and has shared the draft with states, the minister told reporters here.

The Centre in November 2015 had launched the Ujwal DISCOM Assurance Yojana (UDAY) to bring about operational and financial turnaround of debt-laden power distribution companies. "We have planned second wave of distribution reforms and shared the draft with states. We are going to combine the features of UDAY scheme (meant for revival of debt-laden discoms) Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS)," the power minister said. The UDAY scheme was aimed at reducing interest burden, cost of power and losses in distribution sector, besides improving operational efficiency of discoms within a turnaround period of three years.