Government today extended the timeline for states to join UDAY scheme, meant for the revival of debt-laden discoms, and issue bonds for paying a major part of their outstanding debt during the fiscal ending March 2017.The Ujwal Discom Assurance Yojana (UDAY) scheme a bailout package meant for struggling power distribution companies has been tweaked to bring into its fold more states.Under UDAY, introduced in 2015, state governments would be taking over 75 percent of the debt held by their discoms. Half the debt will be taken over in the firscal year 2015-16 and the rest 25 per cent in 2016-17. The balance 25 per cent of the debt is to be serviced through state government-guaranteed bonds issued by the discoms.
According to the changes in the scheme, states that will be signing on anew will be allowed to convert 75 percent of their debt at one go in this fiscal year itself. They wouldn't have to stagger it. The states that will be coming on board include Assam, Tamil Nadu, Madhya Pradesh, Odisha and Himachal Pradesh, among others.
Barring this change, the clause pertaining to state-guaranteed bonds will remain.Pramod Deo, former chairman, CERC said it is understandable why states like Tamil Nadu, Kerala and West Bengal hadn't signed on earlier as they had elections. "The question is how the MoUs will be implemented.
RV Shahi, fomer power secretary , said it is a good development. The states were taking on working capital loans and they were overburdened. Watch video for more...
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