How Fortunes Of Discoms Changed With UDAY
Power transmission lines are suspended from electricity pylons (Photographer: Steve Hockstein/Bloomberg)

How Fortunes Of Discoms Changed With UDAY

States have made mixed progress under the Ujwal Discom Assurance Yojana — a scheme that aims to improve their finances and efficiencies. UDAY aimed at reducing aggregate technical and commercial losses—including those due to transmission—transferring debt to states and installing smart meters, among others.

Here’s how states have fared on each of the parameters.


The total discom debt of the states that opted for UDAY stood at Rs 3.82 lakh crore, according to a Ministry of Power statement in July last year. The scheme mandated states to take over 75 percent of the debt and issue bonds for the rest.

States had taken over nearly 2.09 lakh crore as on July 24 last year, the ministry said in reply to a query in the Rajya Sabha. In response to BloombergQuint’s calls, the ministry spokesperson said the latest data isn’t available yet.

Bonds Issued

According to the scheme, state governments had to take over the losses of discoms in a graded manner in each fiscal and the remaining amount was financed through bonds. Bonds worth Rs 2,32,163 crore, or 86 percent, have been issued out of a total of Rs 2,69,056 crore. Data is available for only 16 states.

Smart Metering

UDAY mandates installation of 35 million smart meters by 2019-end. However, till June 2018 a mere 3 percent of the smart meters above 500 kWH rating and 1 percent of meters with rating of above 200kWH and up to 500 kWH were installed in 25 states.

Financial Health

The discoms of Andhra Pradesh, Maharashtra, Himachal Pradesh and Rajasthan that posted operational losses in 2015 turned profitable in the year ended March 2018, according to data available on UDAY’s website. The discoms of Meghalaya, Telangana, Tamil Nadu, Uttarakhand and Jammu and Kashmir reported losses during the period.

The discoms that turned profitable improved on two parameters:

  • Reduction of the gap between average cost of electricity supplied and average revenue realisation.
  • Reduction in aggregate technical and commercial losses, or energy loss due to inefficiency of equipment and theft.

AT&C Losses

Discoms had to curb their aggregate technical and commercial losses, including those due to transmission. According to data on the UDAY website, cumulative losses for 26 states fell from 23.98 percent in 2015-16 to 18.74 percent in 2017-18. UDAY targets zero AT&C losses by the next financial year ending March 2020.

“The progress on AT&C loss reduction remains slow with current loss levels remaining higher than the target level for FY 2018 in many large states such as Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh, Rajasthan, Punjab and Telangana,” said Girish Kadam, vice president, and sector head of corporate ratings at ICRA Ltd.


The ACS-ARR gap is the difference between the average cost of supply and the average revenue realised per unit of electricity. Data is available for 26 states.

How Fortunes Of Discoms Changed With UDAY
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