Out of the Rs 2,726-crore funding that states were supposed to provide in FY19 against the losses of their power distribution companies (discoms), they have shelled out only Rs1,311 crore, the recent study on state finances published by the Reserve Bank of India (RBI) pointed out. While discoms show no significant sign of recovery, as per the Uday norms, state finances would come under additional pressure going ahead as they are mandated to fund a
progressively higher share of discom losses from their own finances.
As per the provision of the Ujwal Discom Assurance Yojana (Uday), states are supposed to take over 5% of discom losses in FY18, 10% in FY19, 25% in FY20 and 50% in FY21. Even as they managed to pay Rs1,299 crore against the requirement of Rs1,602 crore in FY18, “incomplete compliance” is already on the rise, the RBI study suggested. Government finances of 16 states which signed comprehensive financial and operational turnaround agreements under Uday are already burdened with the Rs2.1 lakh crore worth of Uday bonds.
