The latest sets of data from the power ministry suggest that the sector has witnessed a smart turnaround, mostly because of the UDAY scheme introduced a few years ago. According to the ministry, the UDAY states have managed to cut their financial losses by a whopping 70%, from Rs 51,480 crore in FY16 to Rs 15,049 crore in FY18. Indeed, the ministry says, states like Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Maharashtra, Rajasthan and Daman & Diu have shown profits in FY18; Uttar Pradesh, Tamil Nadu, Punjab, Karnataka, Madhya Pradesh, Tripura and Manipur showed losses, but these were 50% lower than those in FY16. It is, then, odd that generating companies are unable to service their bank loans on time, and since they are on the verge of default—if not defaulted already—the government is trying to get the central bank to relax its classification norms for NPAs.
