States Under UDAY Program Cut Down Financial Losses in 2017

January 5, 2018


The Distribution Companies (DISCOMs) in states that joined the Ujwal DISCOM Assurance Yojana (UDAY) program have cut down their financial losses from ₹515.9 billion (~$8.14 billion) in the Financial Year (FY) 2016 to ₹348.3 billion (~$5.49 billion) in 2017.

Addressing the Lok Sabha, the Minister for Power, R. K. Singh said, “According to the data submitted by states, the participating states have achieved an improvement of 1 percent in aggregate Technical and Commercial (AT&C) losses and ₹0.17 (~$0.003)/kWh in the gap between average cost of supply and average revenue realized in FY2017.” The AT&C losses stood at 21 percent in the year 2016.

The states of Andhra Pradesh, Assam, Bihar, Chhattisgarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Sikkim, Uttar Pradesh and Uttarakhand have increased tariffs in the year 2017-18. “To further aid in the strengthening of DISCOMs, the government has sanctioned an amount of ₹2.33 billion (~$36.8 million) for online monitoring of rural feeders in the country.

Lakshadweep has also shown its willingness to join UDAY and a Memorandum of Understanding (MoU) is under scrutiny.

Mercom had previously reported that with the joining of Nagaland and the union territories of Andaman & Nicobar Islands, Dadra & Nagar Haveli, and Daman & Diu, the number of UDAY signatories has reached 31 (27 states and 4 union territories). While most of them have joined the program for a financial turnaround of their DISCOMs, few have joined for the operational and technical makeover of these utilities.

In August 2017, Mercom reported, states participating in the UDAY program have taken over debt of ₹2.09 trillion (~$32.5 billion) from their DISCOMs. This is almost half of the ₹4.3 trillion (~$64 billion) of debt by state DISCOMs.

According to the Integrated Rating for State Power Distribution Utilities Report by the Ministry of Power in May 2017, four Gujarat state power distribution utilities (DISCOMs) emerged as top performers for the fifth year in a row. Tripura replaced Meghalaya at the bottom of the rating table.

Image credit: Mercom India