What is UDAY Scheme ?
The Ujwal DISCOM Assurance Yojana (UDAY) was launched in November 2015 by the Indian government to improve the financial and operational health of power distribution companies (DISCOMs). DISCOMs in India have historically struggled with high levels of debt, operational inefficiencies, and technical losses, impacting their ability to provide consistent and affordable electricity to consumers. UDAY sought to address these challenges through a series of structural and financial reforms. Key Components of the UDAY Scheme: Debt Restructuring : A major component of UDAY was the restructuring of DISCOM debt. Under the scheme, state governments took over 75% of the debt held by their DISCOMs and issued bonds to cover it. This move reduced the interest burden on DISCOMs, allowing them to focus more on operational improvements. Operational Efficiency Improvements : Reduction in AT&C Losses : Aggregate Technical and Commercial (AT&C) losses, which result from theft, unbilled consumption, ...