Uday Ujjwal
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Transcript of Uday Ujjwal
Ujjwal GoyalNPTI-14th Batch
Date- 10/05/2016
Earlier Scheme
Financial Restructuring Plan (FRP) 2012 :-
Announced on-5th Oct, 2012 By Central (UPA) GovernmentReason- For Achieving Financial turnaround by Restructuring discoms debt with transitional Finance Mechanism
Features- States to take over 50% of short term liabilities through issuance of non-SLR bond and balance 50% need to be restructured by the banks with a 3 year period duly guaranteed by state governments.
Failure of FRP-2012
• No clarity was there on the interest rate at which the bonds will be issued by SEBs.
•Losses were hidden in “Other Current Assets” on which there was no clarity with DISCOMs like Rajasthan, Uttar Pradesh and Andra Pradesh(undivided).
FinancialRestructuringPlan Failure
UDAY : At a Glance
UDAY is the integrated approach of the Ministry of Power (MoP), Ministry of Coal (MoC) and Ministry of New & Renewable Energy (MNRE).
Ujwal DISCOM Assurance Yojana” is regarded as one stop medicine to all woes of the power distribution companies in India
Launched on 09th November 2015 and till now 15 out of 29 states has adopted the scheme for strengthening the financial health of DISCOMs.
According to MoP, the overall losses of all the State Discoms are INR 4.3 Lakh Crores.
UDAYAdopted StatesAP
Bihar
Haryana
Gujarat
MP
Chhattisgarh
Punjab
UP
HP
Jharkhand
Orissa
Maharashtra
Uttarakhand
J & K
Rajasthan
POWER SECTOR REFORMS
From 1956-1991•Electricity Act 1948•Industrial Policy Resolution(1956)•Generation & Distributionof Power under State Ownership
From 1991-2014•Legislative and PolicyInitiatives(1991)•Generation sector Private•Establishing CERC and SERCs (Regulatory Act-1998)•Electricity Act(2003)•APDRP/ R-APDRP/ RGGVY
From 2014- Onwards •Highest Power generation and Transmission capacity addition• Implementation of IPDS and DDUGJY•Biggest LED lighting movement in the World•Launch of UDAY
Dark Era
1956–1991Pre-
liberalizationEra
1991-2014Post-
liberalization Era
2014 onwards
Accelerated Growth
Trajectory
UDAY
Objectives of UDAY Scheme
Reduction in Cost of Interest
of Discoms through debt takeover by
States
Dramatically Improving
Operational Efficiency of
Discoms
Reducing the Cost of Power Procurement
Enforcing Financial
Discipline on Discoms
Benefits ofUDAY
To Govern
ment
• Achievement of 24X7 Power for All
• Energy security through Coal and Renewables
Industry &
Consumers
• Availability of 24X7 power improving quality of life and efficiency
• Lower cost of power
Banks & Investor
s
• Lower risk for existing investments and loans in power, coal and renewables sector
• Reduce investment uncertainty across the sector
Benefits of UDAY
1. 75% of the Discoms debt taken over by the respective states in a phased manner of 50% in FY’ 2015-16 and remaining 25% in FY’2016-17
2. Government of India will not include the debt taken over by the States as per the above scheme in the calculation of fiscal deficit of respective States in the financial years 2015-16 and 2016-17
3. States will issue non-SLR including SDL bonds in the market or directly to the respective banks / Financial Institutions (FIs) holding the DISCOM debt to the appropriate extent.
4. DISCOM debt not taken over by the State shall be converted by the Banks / FIs into loans or bonds with interest rate not more than the bank’s base rate plus 0.1%. Alternately, this debt may be fully or partly issued by the DISCOM as State guaranteed DISCOM bonds at the prevailing market rates which shall be equal to or less than bank base rate plus 0.1%.
5. State DISCOMs will comply with the Renewable Purchase Obligation (RPO) outstanding since 1st April, 2012, within a period to be decided in consultation with Ministry of Power.
6. States accepting UDAY will be given additional funding through
DDUGJY, IPDS, Power Sector Development Fund (PSDF) or other such
schemes