Why the lights dimmed on UDAY

NEW DELHI : When it was launched in 2016, the Ujjwal DISCOM Assurance Yojana (or UDAY) was hailed as a game-changer for India’s power sector. Yet despite the hype, India’s power sector remains a mess. Less than 50% of rural households receive more than 12 hours of electricity supply, according to a 2018 study. And state distribution companies or discoms — responsible for delivering electricity to households — are plagued with leakages, burdened with debt, and reeling under losses.

While financial losses of discoms have declined, they continue to incur huge losses. Indicative data from a Rajya Sabha reply shows that state electricity boards faced losses of around ₹27,250 crore as of 2018-19.

UDAY sought to instil financial discipline and restructure debt but the scheme has failed to tackle the underlying issues in the sector.