Goyal rebuffs RBI on UDAY

Piyush Goyal  

Power Minister Piyush Goyal on Tuesday rebuffed the Reserve Bank of India's (RBI) recent report showing that the Ujjwal Discom Awas Yojana (UDAY) scheme was harming state finances, and said that the debt was already with the state governments since they owned the stressed electricity distribution companies (discoms).

“I wish RBI would re-examine its logic in saying that state finances will be hurt,” Mr. Goyal told reporters. “I have said this before, that the UDAY scheme shifts the debt from discoms already owned by the state governments to the state governments directly. In essence, it has shifted the debt from the subsidiary to the holding company.”

An RBI report released on May 12 said the finances of several Indian states were deteriorating after they took over the discoms’ debt under UDAY. It said the states also had to provide for additional provisions under UDAY to provide working capital for the discoms.

Low tariffs

On the historically low Rs. 2.44 solar tariff arrived at in an auction in Rajasthan last week, he cautioned that not all tariffs would be as low. “We won’t hold Rs. 2.44 as gospel since there were particular reasons, such as the high radiation levels and the fact that the bid was backed by the Solar Energy Corporation of India, for it,” he said. “But it is a sign of the good work we are doing in bringing solar tariffs down.”