(FE)
The news on the Ujjwal Discom Assurance Yojana (UDAY) is a mixed bag. On the positive side, the financial metrics of state power distribution companies (discoms) improved in nine months of FY17, with their interest cost burden falling to 8.5%, as against 13% earlier. However, sustaining this performance would be a challenge in FY18 when UDAY’s incentives are no longer in place. The bottomline is that discoms have to improve on their operational parameters if the scheme’s benefits are to be sustained over the long term.
“Steps that culminate in the reduction of AT&C (Aggregate Technical & Commercial) losses, meeting the FY19 target of 15% losses, would be critical for the revival of discoms,” says Anujesh Dwivedi, director, Deloitte & Touche.
The overall AT&C losses for 24 states have fallen to 20.55% (as of August 11) from 23.84% in 2016, according to the UDAY Dashboard. An India Ratings report has revealed that only three states — Goa, Gujarat and Rajasthan — achieved their AT&C loss reduction target in 9MFY17. Of the 10 states which joined UDAY in FY16, the AT&C loss figures of six states — Bihar, Chhattisgarh, Jammu & Kashmir, Punjab, Uttar Pradesh and Uttarakhand — were higher than in FY16. While Haryana and Jharkhand reduced their AT&C losses, these were higher than the nine-month target.
