19 states under Uday invoked tariff revisions: Care Ratings

About 19 of the total 22 states that have joined the UjwalDISCOM Assurance Yojana (UDAY) programme has invoked revisions in the tariff structures till December 2016, said a report by CARE Ratings.Uday is the financial turnaround and revival package for electricity distribution companies of India (DISCOMs) launched by Power Minister Piyush Goyal in November 2015.

The revival roadmap is through allowing the concerned state governments to take over 75 percent of their debt and pay back the lenders by selling bonds. Discoms were allowed to issue bonds for the remaining 25 per cent of their debt. Uday has put a target of 15 per cent for aggregate technical and commercial (AT&C) losses and presently three of the 16 states on which information is available have a number of less than 15 per cent, the report added."Four states, Bihar, Jharkhand, Manipur and J & K have losses of over 30 per cent while UP is close to this mark at 29.3 per cent. These states will have to work hard to lower their losses over the next couple of years," it said.

The gap between the average cost of supply (ACS) and the average revenue realisation (ARR) of discoms was 27 per cent on average and over 35 per cent in the worst off states like Uttar Pradesh and Rajasthan. "UDAY also speaks of equalising the difference between average cost and revenue. Presently, two of the 16 states have negative ACS-ARR, meaning thereby that they are earning a profit. Interestingly, the states with higher AT&C losses have higher net revenue," the report added. 

In terms of progress in distribution of LED lights as was agreed upon in the MoUs signed with various states, the overall achievement was 77 per cent, with 100 percent registered by AP, Bihar, Gujarat and Jharkhand. Maharashtra comes in close at 99 per cent with high scores by Puducherry, Chattisgarh and Karnataka.

"The overall progress appears to be fairly satisfactory. The conversion of debt into UDAY bonds has been implemented fairly widely acrossthe signing states, which is a positive in terms of alleviating the finances of the DISCOMs," the report added.