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UDAY Power Debt in Retrospect and Prospects: Analyzing the Efficiency Parameters

Author

Listed:
  • Kaur, Amandeep

    (National Institute of Public Finance and Policy)

  • Chakraborty, Lekha

    (National Institute of Public Finance and Policy)

Abstract

The Government of India launched the Ujwal DISCOM Assurance Yojana (UDAY), in November 2015, with an objective of "Power for All". Under the UDAY scheme, selected States agreed to convert 75 per cent of the DISCOM's (State Power Distribution Companies) power debt into State government non-SLR bonds, priced at not more than 75 basis points above the prevailing cut-off yield rate of govern-ment security of 10-year maturity. At aggregate level, so far, around 86 per cent of UDAY bonds have been issued - Rs. 2.32 lakh crores out of Rs. 2.69 lakh crores - across all UDAY States/UTs. Our estimates reveal that the financial and operational efficiency parameters envisaged in UDAY tripartite MoUs - between DISCOMs, the State Governments and the Ministry of Power, Government of India - have not been met by many States. Using UDAY portal data, we find that the average AT C (Aggre-gate Technical and Commercial) losses that should have been implemented in states -due to political econmy reasons - and the operational parameters in our analysis indicate widening inefficiencies across States in power infrastructure.

Suggested Citation

  • Kaur, Amandeep & Chakraborty, Lekha, 2018. "UDAY Power Debt in Retrospect and Prospects: Analyzing the Efficiency Parameters," Working Papers 18/244, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:18/244
    Note: Working Paper 244 2018
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    Cited by:

    1. Pratik Datta, 2019. "Value Destruction and Wealth Transfer Under the Insolvency and Bankruptcy Code, 2016," Working Papers id:12965, eSocialSciences.
    2. Shameem P, Mohammed & Chittedi, Krishna Reddy, 2022. "Strides for aberrations: The Electricity (Amendment) Bill, 2021 of India," Energy Policy, Elsevier, vol. 165(C).
    3. Datta, Pratik, 2018. "Value Destruction and Wealth Transfer under the Insolvency and Bankruptcy Code, 2016," Working Papers 18/247, National Institute of Public Finance and Policy.
    4. Singh, Kamaljit & Vashishtha, Simmi, 2019. "Empowering the power sector through UDAY: A study of Haryana," MPRA Paper 99266, University Library of Munich, Germany.

    More about this item

    Keywords

    Power infrastructure ; Power Debt ; Bonds ; Financial efficiency;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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