NEW DELHI: A rescue package for ailing electricity utilities, called ‘Ujwal DISCOM Assurance Yojna’ or UDAY, was approved by the Cabinet on Thursday. The scheme stipulates passing on discom debts in their entirety to the respective States over two years. Under the scheme, States will take over 75 per cent of the debt as on September 30, over two years — 50 per cent in 2015-16 and 25 per cent in 2016-17. Ensuring that the Centre’s finances are not impacted, the scheme stipulates that the debt taken over by the States will not be included by the Centre when calculating the fiscal deficit of respective States in fiscal years 2015-16 and 2016-17. To take over the debt, the States will issue non-SLR (statutory liquidity ratio) bonds either in the market or directly to the bank/financial institution (FI). The discom debt not taken over by the State would be converted by the banks/FIs into loans or bonds bearing an interest rate not more than the bank’s base rate plus 0.
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