The Centre today extended the timeline till March next for the states to join the UDAY scheme for revival of debt-laden power distribution utilities.
"The deadline for transferring discoms' debt to state budget and issuing bonds for 50 per cent outstanding was March 31, 2016. The Union Cabinet today decided to extend this date to March 31, 2017," Finance Minister Arun Jaitley said at a press conference after the Union Cabinet meeting here.
"Many states have already singed on it (agreement) to join the UDAY scheme," he said.
With the approval for extension of timeline, the states shall take over 75 per cent of discoms' debt as on September, 30, 2015 by March 31, 2017 by issuing bonds, an intervention to lower the interest burden, an official release said.
The states which could not join so far would get an opportunity to join UDAY and put the DISCOM reforms on accelerated path, it added.
The Union Cabinet chaired by Prime Minister Narendra Modi in its meeting today has approved an extension of timeline for taking over 50 per cent of the Outstanding Debt of DISCOMs, as existing on September, 30, 2015, by States and borrowings by Jammu & Kashmir under UDAY (Ujjwal DISCOM Assurance Yojana) - a scheme for operational and financial turnaround of DISCOMs.
It further said,"The time limits have now been extended by one year from the earlier stipulated date of March 31, 2016. This decision would allow States, which could not participate in the scheme UDAY earlier to join the Scheme."
Under UDAY, so far 19 States have already given their consent to join the scheme, out of which 10 States, viz. Rajasthan, Uttar Pradesh, Chattisgarh, Jharkhand, Punjab, Bihar, Haryana, Gujarat, Uttarakhand and Jammu & Kashmir have already signed MOUs with the Central Government.
In the year 2015-16, Bonds worth Rs 99,541 crores were floated by the participating States to clear 50 per cent of the outstanding debt of States and outstanding CPSU dues in Jharkhand and Jammu & Kashmir.
Further, DISCOM Bonds worth Rs 11,524 crores were floated. In the year 2016-17, Bonds worth Rs 14,801 crores have been floated by the State of Uttar Pradesh.
UDAY provides for the financial turnaround and revival of Power Distribution companies (DISCOMs), and importantly also ensures a sustainable permanent solution to this long standing problem.
