Friday, January 15, 2016

UDAY – Target linked MoU designed, no benefits if discoms default


  • The Centre is hopeful of getting at least 21 states on board for Ujjawal Discom Assurance Yojana (UDAY) reforms
  • For the states that sign up for UDAY, one of the first steps is to take over 75 per cent of DISCOM debt as on September 30, 2015 over two years - 50 per cent in 2015-16 and 25 per cent in 2016-17.
  • The state borrowing would be issued as Non-SLR State Development Loans.
  • With loans being part of the capital expenditure in the state’s Budget, the Centre is hopeful of bringing down interest rates further.
The Bait

  • Waiving unpaid overdue interest payment of discoms
  • Additional grant under Centre-sponsored schemes
  • Increased supply of domestic coal
  • Faster completion of intrastate transmission lines
The Switch
  • No future lending by PSU banks and FIs

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