Discom finances up, but fall short of target

SINCE THE LAUNCH OF THE SCHEME, THE RAJASTHAN GOVERNMENT HAS ISSUED BONDS WORTH ABOUT ₹70,525 CRORE

Power distribution companies (discoms) in Rajasthan have reduced the cost-revenue gap and transmission losses as mandated under Ujwal Discom Assurance Yojana (UDAY) but have fallen short of the target for 2016-17, reveals power ministry data.

Discoms in Rajasthan have improved the cost-revenue gap from ₹ 0.83 for every unit in September 2016 to ₹ 0.66 for every unit, but fell short of UDAY target of ₹0.42 per unit.

The aggregate technical and commercial losses have been reduced to 26.94% from 29.4% in September 2016, but fell short of the target of 24.2%.

In November 2015, the Centre introduced a rehabilitation UDAY scheme as discoms’ accumulated debt rose to ₹ 4.5 lakh crore by September 2015.

Discoms in Rajasthan accounted for ₹ 80,500 crore or nearly 18% of the total debt.

Since the launch of the scheme, the Rajasthan government has issued bonds worth about ₹70,525 crore.

The UDAY scheme mandates that in return discoms will reduce the aggregate technical and commercial losses, and the gap between the cost of supply and realised revenue, as per the agreed trajectory.

UDAY also requires the state discoms to initiate revision of tariffs in order to pass on legitimate costs to consumers and mitigate the burden.

“The projected saving of Rajasthan discoms due to the scheme is about ₹4,697 crore mainly due to lowering of interest costs and improvement in operational efficiency,” an official of Jaipur Vidyut Vitran Nigam Ltd, who did not wish to be named, said.

“We are working towards maintaining the financial viability and meeting targets under UDAY,” he said.

In 2016-17, discoms reported a reduced distribution loss by 4.30% while the estimated annual fiscal loss is ₹ 5,200 crore.

The government has set an ambitious target to bring down discom losses to ₹ 1,400 crore in 2017-18.