UDAY – Ujwal Discome Assurance Yojana

UDAY is an effort to make these DISCOMs financially and operationally healthy, to be able to supply adequate power at affordable rates, and enable the Governments to make efforts towards 100% Village electrification and 24X7 Power For All.

  • UDAY Scheme has been launched by Union Ministry of Power for financial restructuring of debt of power distribution companies.
  • It aims for financial revival and turnaround of Power Distribution companies (DISCOMs) and also ensures a sustainable permanent solution to the problem. By becoming part of it, states power DISCOMs can convert their debt into state bonds as well as roll out number of measures to improve efficiency at power plants. It seeks to make DISCOMs financially and operationally healthy so they can supply adequate power at affordable rates and play important role in Union Government’s ambition of meeting target of 100% Village electrification and 24X7 Power For All.
  • It envisages to reduce interest burden, cost of power and AT&C losses. Consequently, DISCOM would become sustainable to supply adequate and reliable power enabling 24×7 power supply.
  • The scheme provides that States would take over 75% debt of Discoms, as on 30th September, 2015 in two years.
  • UDAY has inbuilt incentives encouraging State Governments to voluntarily restructure their debts. These incentives include taking over of DISCOM debt by the States outside the fiscal deficit limits; reduction in the cost of power through various measures such as coal linkage rationalization, liberal coal swaps and priority/additional funding through schemes of MoP & MNRE.
  • UDAY is different from earlier restructuring schemes in several ways including flexibility of keeping debt taken over outside fiscal deficit limit, reduction in cost of power and a series of time bound interventions for improving operational efficiency.
  • UDAY also provides for measures that will reduce the cost of power generation, which would ultimately benefit consumers.
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