UDAY will lead to Rs 1.8 Lakh Crore Savings Annually : Piyush Goyal
UDAY will lead to Rs 1.8 Lakh Crore Savings Annually : Piyush Goyal
Union Minister of State ( IC) for Power, Coal and Renewable Energy,Shri Piyush Goyal has
asserted that the newly unveiled debt restructuring plan for DISCOMs, will
eventually lead to a saving of Rs 1,80,000 crore annually. Named as
UDAY (UjjwalDiscom Assurance Yojana), which also means dawn in
English, the package involves a massive bailout plan for debt ridden Discoms,
besides measures to reduce power thefts, align consumer tariff with generation
cost and promote energy efficiency.
Shri Piyush Goyal held an extensive investors interaction
meeting in Mumbai on Monday evening to explain the new power sector
reform initiative of the government. In a packed house attended by FIIs,
Private Equity Funds, Sovereign Wealth funds, Insurance companies, rating
agencies, analysts and Mutual funds among others, the Power Minister expressed
confidence that UDAY will find pan-India acceptance. “Almost all the state
power ministers heartily welcomed the new initiative during the Conference held
in Kochi last week” he said.
Shri Piyush Goyal further said “it is a bottom up approach,
not a top down approach. The states will be assisted and hand held to bring
down the cost of power by improving their distribution, transmission and sub
transmission network, reducing the cost of power through coal rationalization
and also bringing down the interest cost substantially.
Shri Goyal said the weakest aspect in the power sector was
related to distribution, wherein Discoms have accumulated losses of
approximately 3.8 lakh crores and outstanding debt of Rs 4.30 lakh crores.
The Minister said, UDAY is also a good news for the banking sector,
which has a huge exposure to the near bankrupt state Discoms.
Under UDAY, states can take over 75 per cent of their debt as
on September 30, and payback lenders by issuing bonds. This takeover of
debt will not be added to the fiscal deficit of the states. For the remaining
25 per cent, the State Electricity Boards shall issue bonds. The Minister
assured the assembled investors that the sovereign, state and PSU bonds of
India have never failed on payments.
Shri Goyal asserted that tariff increase was no substitute for
efficiency improvement and added “regulators cannot pass on inefficiency of Discoms to
consumers”.
The Minister said the energy efficiency under UDAY would be achieved by
reduction in interest rate, reduction in aggregate technical and commercial
losses, increase in coal availability, improving billing and
collection efficiency, and better demand side management. He said the National
Domestic LED Programme alone, when fully implemented will lead to
reduction of consumer bills to the tune of Rs 40,000 crore, besides
reducing peak load by 20,000 Mega Watts.
Terming UDAY as a new milestone in the power sector, even though it is
optional, Shri Piyush Goyal urged all states to look at it
in the holistic fashion and see the benefits it offers. He further said states
accepting the scheme and performing as per operational milestones will be given
additional or priority funding under Deen Dayal Upadhyay Gram Jyoti Yojana and
Integrated Power Development Scheme and other schemes of the power and
renewable energy ministries.
The Minister said that if implemented in right spirit UDAY can help almost
all the loss making Discoms in the country to post profits within
next 2-3 years.
You can
watch complete proceedings by clicking the web link of Video recordings of Minister's
Investors Meet .
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