1. To improve financial and operational efficiencies of power distribution companies (DISCOMs).
2. It envisages reducing interest burden, cost of power and AT&C losses. Consequently, DISCOMs would become sustainable to supply adequate and reliable power enabling 24x7 power supply.
3. The scheme provides that States would take over 75% of debts of Discoms, as on 30th September, 2015 within two years.
- Unique Features
1. It provides flexibility of managing debt taken over outside fiscal deficit limit,
2. Provides reduction in cost of power and a series of time bound interventions for improving operational efficiency.
3. Provides for measures that will reduce the cost of power generation, which would ultimately benefit consumers.
1. To incentivize states for taking over of DISCOM debt outside the fiscal deficit limits;
2. Incentivizse states to reduce the cost of power through various measures such as coal linkage rationalization, liberal coal swaps, coal price rationalization, correction in coal grade slippage, allocation of coal linkages at notified prices; priority/additional funding through schemes of MoP & MNRE; and, reduction in interest burden.
- States joined the scheme
1. Andhra Pradesh became the first state to to join in the scheme UDAY.
2. Jharkhand is newly joined state