IEEMA welcomes UDAY, the new scheme to rescue discoms

Nov. 9, 2015 - PRLog -- Indian Electrical and Electronics Manufacturer Association, today welcomed the Ujjwal Discom Assurance Yojana of the Central Government, which aims to ease the financial crunch faced by power distribution companies that has impaired their ability to buy electricity.

Mr. Babu Babel, President, IEEMA said, “ It is a very positive step as this programme would focus on increasing productivity, decreasing costs and enhancing fiscal discipline by involving states directly. UDAY will also help the banking sector, as banks too cannot hold such large non-performing loans. The industry is determined to support the government, however the key thing would be to tackle losses as a consequence of power theft and unsustainable direct subsidies. IEEMA already has a program to reach out to the distribution companies and aid them with technical solutions for complex problems related to mitigating loses and enhancing revenues.

Overall a very positive move, it would be important to have the right people and process in place for its correct implementation. As a result of this scheme, losses will be transferred to states and they should be able to sustain it. “ said Mr. Babel

Power situation in the country in terms of generation has improved substantially with some work which is needed to be done in transmission sector. However, distribution aspect of electricity remains a challenge in many states. The financial condition of many of the distribution companies is alarming and that of financial distress. The Ujjwal Discom Assurance Yojana, UDAY, is a brilliant initiative of the Ministry of Power and IEEMA welcomes this scheme.