MUMBAI: The external debt of state-owned electricity distribution companies (discoms) is set to increase to pre-UDAY levels of ₹2.6 lakh crore by the end of this fiscal, a note by credit ratings agency Crisil said today. With most states having limited fiscal headroom, continuous financial support to their discoms may be difficult, which forces these discoms to become commercially viable through prudent tariff hikes and a significant reduction in technical and commercial (AT&C) losses.
UDAY or Ujwal Discom Assurance Yojana, which was approved by the Union Cabinet in November 2015, sought to financially stabilize discoms by allowing them to convert their debt into state government bonds, subject to certain conditions. Crisil’s report is based on an analysis of discoms in 15 states that account for 85% of the aggregate losses.
