Government nod for UDAY bonds

Published - March 03, 2016 01:11 am IST - NEW DELHI:

The Finance Ministry has approved the issuance of Ujjwal Discom Assurance Yojana (UDAY) bonds by four states, according to Minister of Power Piyush Goyal.

“The Finance Ministry has approved the issuance of UDAY bonds by four states. They are Uttar Pradesh, Rajasthan, Jharkhand and Chattisgarh,” Mr. Goyal told reporters on Wednesday. He did not, however, specify when the bonds will be issued.

Manipur and Tripura have agreed to join UDAY, he said. This takes the total number of states that have agreed to join UDAY to 16. So far, six states have signed the UDAY contract.

State governments can take over 75 per cent of discom debt and pay back lenders by issuing bonds. The scheme provides for the remaining 25 per cent of the debt to be paid back through discom-issued bonds. Total discom debt in the country amounts to Rs.4.3 lakh crore.

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