Total debt of state-owned discoms is set to increase to pre-Uday levels of Rs 2.6 trillion by the end of this fiscal year, as many states have limited fiscal headroom to continue to support them, says a report.
According to rating agency Crisil, which analysed 15 states which account for 85 per cent of the aggregate losses, discoms have to become commercially viable through prudent tariff hikes and a material reduction in aggregate technical and commercial (AT&C) losses.
Under the agreement the states had signed under Uday scheme with the Centre in FY16, discoms were to initiate begin reforms by reducing AT&C losses by 900 basis points to 15 per cent by FY19, and also implement regular tariff hikes of 5-6 per cent per annum. In lieu, the states took over three- fourths of discom debt, thus reducing their interest burden.
