In the first nine months of India’s current financial year (FY) 2016-2017, the
interest costs of states and union territory DISCOMs that have joined the Ujwal
DISCOM (distribution company) Assurance Yojana (UDAY) program have been reduced
by Rs.119.89 billion (~$1.83 billion) compared to the same period in FY
The UDAY program provides working capital debt financing by
banks and financial institutions to DISCOMs, and only to the extent of 25
percent of their previous year’s
revenue, stated Mr. Piyush Goyal, Minister for Power, in the Rajya Sabha.
Out of the existing state-owned power distribution utilities
debt of Rs.3,754.30 billion (~$57.31 billion), UDAY states account for Rs.3,561.52
billion (~$54.37 billion) as of 31-03-2015, added Mr. Goyal in the Rajya Sabha.
Interest costs have been a part of the financial concerns that
DISCOMs in the India face today. If this goes down, a considerable amount of
pressure will be relieved, stated an MNRE official. Interest costs resulted in
an increase in the combined DISCOM debt, added the MNRE official.
The UDAY program was launched in 2015 for the financial and
operational turnaround of DISCOMs in the country. Mercom previously reported, a
total of ~Rs.2.07
trillion (~$30.99 billion) DISCOM debt has been restructured under the UDAY
also reported that the year 2020
is the expected breakeven point for most states and union territories that have
joined the UDAY program.