Union Cabinet chaired prime minister Narendra Modi has given its nod ujwal DISCOM Assurance Yojana(UDAY) for financial restructuring of debt of power distribution companies.
The scheme aims for financial turnaround and revival of power Distribution companies DISCOM's
Allows power DISCOM's in a selected state to convert their debt into states bonds as well as role out number of measures to improve efficiency at power plant.
Seeks to ensures that struggling DISCOM's in selected states to convert their debt into state bonds as well as roll out a number of measures to improve efficiency at power plants.
Assures the rise vibrant and efficient DISCOM's through four initiatives:
(i)Improve operational efficiencies of DISCOM's.
(ii)Reduce the cost of power
(iii)Reduce interest cost of DISCOM's
(iv)EEnforce financial discipline on DISCOM's through allignment with state finance.
Debt Burden:Shifts 75% of power DISCOM's debt burden to states balance sheets.
This step would result in interest cost savings to the tune of 3-5 percent.
State Power Bonds or loans:selected states would be able to sell the balance 25 per centas state backed power bond or loans which will carry interest rates of g-sec plus 50 basis points.
Improve operational steps by implementing steps like
swapping coal linkages
monitoring aggregate technical and commercial (AT&C)losses.
