The government has refuted reports that debt levels of power distribution companies (discom) have reached the levels they were at before the Ujjwal Discom Assurance Yojana (UDAY).
The UDAY scheme implemented in 2015 was aimed at reducing discom debt levels and improving their efficiency. CRISIL on Monday released a report saying that discom debt was set to increase to pre-UDAY levels of ₹2.6 lakh crore by the end of this financial year.
“Pre-UDAY debt levels of 16 UDAY states with comprehensive MoUs were to the tune of around ₹3.24 lakh crore,” the Ministry of Power said in a statement. “Therefore the prediction that discom debt at around ₹2.6 lakh crore would reach pre-UDAY levels is not correct.”
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The Ministry added that the CRISIL analysis perhaps did not take into account the fact that almost about ₹85,000 crore of debt was yet to be converted into grants or equity by the participating states as per the UDAY plan.
“A deeper analysis of discom debt would reveal a tighter fiscal management by discoms,” the government added in the statement. “Discoms have managed their finances with around ₹40,000 crore less than what was expected under UDAY.”