The central government has extended the date for states to join the Uday debt restructuring scheme for electricity distribution companies to enable those like Tamil Nadu, which are doubtful of its benefits, to sign the agreement, Union Power Minister Piyush Goyal said.
“I only feel very sad for the people of Tamil Nadu, because Uday (Ujwal Discom Assurance Yojana) will save Rs 22,400 crore of discoms’ debt in the next three years,” Goyal told reporters here.
“Tamil Nadu has an accumulated debt of Rs 68,000 crore and I see no reason why people of the state should be denied the benefit of this saving,” he said.
The union cabinet last month extended till March 31, 2017, the date for joining Uday, which has been signed by 18 states and one union territory so far.
Uday envisages taking over 75 per cent of discoms’ cumulative debt. States would issue loans against the debt at prevailing market rates. The balance 25 per cent would be issued as sovereign backed bonds by discoms.
The scheme also envisages access to cheaper coal, modernising transformers to cut distribution losses, as well as a provision to revise tariffs, which has been criticised by the AIADMK government in Tamil Nadu. State Power Minister Natham R.Viswanathan has described the price increases every quarter provided under Uday as a harsh imposition on the poor.
Noting how states like Rajasthan, Uttar Pradesh, Bihar and Haryana are benefiting significantly from Uday, Goyal said that Tamil Nadu would eventually have to pay off its discom debts because even banks have been instructed not to fund in this regard.
“Some day Tamil Nadu will have to pay off its discom debts. Uday will help them reduce the burden of increased tariff on the people,” the minister said.
He said he had earlier sent a team of senior officials of the power ministry to Tamil Nadu to explain how Uday will help the people of the state.