Power Minister Piyush Goyal said on Friday that the Ujjwal Discom Assurance Yojana (Uday) approved by the union cabinet will help wipe out the accumulated losses of state electricity distribution companies (discoms) by 2019.
"A clear road map has been drawn to solve the present crisis of discoms," he said at the opening of the conference of state power ministers here, while referring to the discoms debt restructuring plan cleared by the cabinet in New Delhi on Thursday.
With the losses of electricity distribution companies in India touching a staggering Rs.3.8 trillion ($58 billion), the cabinet on Thursday approved a major restructuring and revival package for the sector, with both checks and incentives, to remove what is considered the weakest link in the government's ambitious plan of power for all by 2022.
Announcing the cabinet decision to reporters on Thursday, the minister said the Uday package includes steps to reduce the interest burden of discoms by as much as 600 basis points, by converting 75 percent of their debt into state governments bonds. These bonds, he added, will bear the same interest as that for government securities, plus 50 basis points.
Goyal assured the power ministers of states and union territories gathered here that apprehensions regarding the proposed amendments to the Electricity Act would be addressed.
Referring to India's renewable energy plan target for installed solar power capacity of 100 gigawatt (GW) by 2022, Goyal said the target could be achieved earlier with cooperation of the states.
"I am confident that we can achieve the renewable energy targets, not necessarily six-and-half years from now but possibly even in four-and-half years from now, if we all work together as a team," he said.
India has pledged to improve emissions intensity of its gross domestic product by 33-35 percent by 2030 below 2005 levels.
