UDAY Scheme for Discoms

Centre cannot guarantee power supply to all villages, says official


Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: UDAY and stats related to it.

Mains level: The newscard discusses the issue of discoms and highlights the role of states to give financial support to the stressed state discoms.


State DISCOMS be responsible for power supply in rural areas

  1. The Centre has claimed 100% electrification of all villages and 83% of all households across the country. It has said that all households will be electrified by the year-end.
  2. While it is the Centre’s responsibility to connect households and villages to the power grid or provide them alternative sources of electricity, it cannot guarantee the supply of electricity to them.
  3. Access to electricity also means consistent supply but that has to be done by the State governments and the discoms, said Power Ministry official.

Discrepancies in claims

  1. In some cases, the electrification infrastructure such as cables and transformers were stolen days after they were installed, leaving the target village unelectrified in reality but connected on paper.
  2. In other cases, electricity was supplied for just a few hours a day.

Rampant power cuts

  1. Despite the government pegging India as a power surplus nation, almost every State in the country reels under power cuts, especially during peak summer.
  2. This, according to power sector analysts, is because discoms are still very inefficient, with the costs they incur in the transmission far outweighing revenue.
  3. Government data show discoms across the country, on an average, lose ₹0.22 a unit of electricity supplied.

UDAY for rescue

  1. However, the Power Ministry has claimed that this situation is improving rapidly under the Ujwal Discom Assurance Yojana (UDAY).
  2. Power Minister recently said that discom losses have drastically reduced to ₹17,352 crore in 2017-18 from ₹51,096 crore in the previous year.

Way Forward

  1. While the performance of discoms is improving, they are still not at the performance level to supply electricity 24×7. The only hope of the utilities is continued assistance from the State governments.
  2. On their own, the many of the discoms right now are not ready to provide 24×7 power, for two reasons
  3. The first is their financial health. Most of them are not financially capable to do this.
  4. Secondly, only some of the discoms have the infrastructure to supply good quality power on a sustained basis.
  5. But if the respective State governments continue to give financial support and assurances to the discoms, then this could definitely improve.
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