UDAY's second rise

State governments will need to reduce subsidies

Successive governments’ struggles to price services at market rates are amply demonstrated by the crisis in UDAY, or the Ujwal Discom Assurance Yojana, the 2015 scheme to boost ailing state power distribution companies (discoms). Now into its fifth year, UDAY has proven no more effective than two other attempts to solve the chronic discom debt problem in this century. The cumulative losses of 21 states that adopted UDAY stand at Rs 28,639 crore in FY19. To be sure, this is a significant reduction on Rs 51,562 crore in FY16, the first year of the scheme, but a massive 88 per