Ujwal Discom Assurance Yojana
Ujwal Discom Assurance Yojana: On November 5, 2015, the Indian government introduced the Ujjwal Discom Assurance Yojana. The goal of the Indian government’s Ujjwal Discom Assurance Yojana is to lower the debt of state-owned power distribution corporations by offering 24/7 inexpensive and accessible electricity. additionally to offer resources for collaboration in the electricity distribution company’s operational and financial restructuring.
When the program was first introduced in 2015, the goal was to run the Ujwal Discom Assurance Yojana for four years, or until 2019. However, the government ultimately decided to extend the program’s duration to five years, or until 2019, as part of the Union Budget 2020–21, to improve both the state and the power distribution industry. It has been reopened to lower the debt of owned electricity distribution firms.
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Contents
In India, the distribution businesses for electricity, or Discoms, are losing money. since the cost of electricity is significantly higher than the rate of delivery at tariff. The Discom has outstanding debt as a result. Discom is stuck with losses of over Rs 3.8 lakh crore and debt of almost Rs 4.3 lakh crore, according to figures from March 2015. Based on statistical data, the primary cause of this issue is the incapacity of state and federal power firms to lower the cost of electricity generation. 32 states and all union territories have embraced the federally sponsored Ujjwal Discom Assurance Scheme. Because of the advantages it offers, such as lower loan rates, lower coal prices, higher tariffs, and
Utility businesses are distribution companies of electricity or DISCOMS. Whose responsibility it is to buy electricity and distribute it to customers? Both urban and rural residents must receive their electricity from the state. which indicates that the state government owns the majority of the Discoms.
Name Of Scheme | UDAY Scheme 2024 |
Full form of scheme | Ujwal DISCOM Assurance Yojana |
who started | Prime Minister Narendra Modi |
sponsored by | Central government |
year of launch | 2015 |
beneficiary | all citizens of the country |
Objective | To reduce the burden of electricity debt |
official website | uday.gov.in |
Department | Ministry of Power |
scheme status | is on |
Discoms handle the task of acquiring electricity generated by companies that generate power. Through a Power Purchase Agreement (PPA), this purchase is made. However, if we examine historical statistics, we see that the purchase of electricity through this power purchase agreement has drastically decreased, with the primary cause being the discus mounting debt. The Ministry of New and Renewable Energy launched the Uday Ujjwal Discom Assurance Scheme on November 5, 2015, in response to this. which aims to lower interest rates, cut down on power outages, offer affordable power around the clock, lower the cost of electricity in the distribution sector, and increase the working capacity of distribution networks (Discoms).
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lower electricity costs with centralized support
By the end of 2014–15, UDAY had paid down 62% of the DISCOMS debt that was already in place. With the expected imminent addition of Maharashtra, Telangana, Assam, and Kerala to the UDAY network, roughly 78% of state sector DISCOM loans (apart from electricity departments) will fall within its purview.
UDAY has successfully issued bonds totalling Rs 1.68 lakh crore, accounting for approximately 76% of the state’s debt. The states of Rajasthan, UP, Haryana, Punjab, Chhattisgarh, and Bihar have saved almost Rs 2,236 crore on QI for FY 2016–17 thanks to the reduction in interest costs, which also guarantees the operational viability of the participating DISCOMS.
Here is a list of challenges associated with UDAY.
Here’s what Uday 2.0 wants.
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Q: What is the extended form of Uday?
Ans: Ujjwal Discom Assurance Yojana is the acronym for UDAY.
Q: What is the primary purpose of DISCOM?
Ans: Discoms purchase electricity from companies that generate it and resell it to end users, acting as a middleman between customers and the companies. Their smooth and continuous power supply to clients is greatly dependent on their effective operation.
Q: Which qualities make up Uday’s core?
Ans: The deployment of smart meters, demand-side management, tariff revision mechanisms, and financial restructuring are a few of UDAY’s salient features.
Q: What advantages does UDAY offer to users of electricity?
Ans: UDAY offers customers access to a clean and green energy mix, stabilizes power pricing, and enhances service quality
Q: What motivated the scheme’s inception most?
Ans: UDAY is a government initiative that aims to improve the operational and financial stability of India’s electricity distribution corporations (DISCOMs) while also providing affordable electricity to all.
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