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Lakshadweep joins UDAY scheme

Lakshadweep joins UDAY scheme

Context:
The  Union territory of Lakshadweep joined UDAY (Scheme Ujwal DISCOM Assurance Yojana) Scheme.

Importance:

  •  Union Territory of Lakshadweep and the Government of India signed a MoU under the UDAY Scheme. This will ensure operational turnaround of Lakshadweep’s Electricity Department.
  • Lakshadweep will receive an overall net benefit of around Rs. 8 crore through the UDAY Scheme. This will be achieved by cheaper funds, reduction in AT&C (Aggregate Technical and Commercial) losses, interventions in energy efficiency, etc.
  •  The Central Government will help Lakshadweep in improving Power infrastructure which will result in further reduction of the cost of power.

Know about Ujwal DISCOM Assurance Yojana (UDAY):

  • UDAY Scheme was launched by Union Power Ministry for financial turnaround and revival package for state electricity distribution companies (DISCOMs). It aimed to help to make discoms financially and operationally healthy so they can supply  adequate power at affordable rates.
  • The scheme is optional for the states to join. Under it, state governments were to take over up to 75% of their respective discoms’ debt by issuing sovereign bonds to pay back the lenders. Remaining 25% of debt will be issued by discoms in the form of bonds.

 

  • UDAY envisages to have a permanent solution for past as well as potential future issues of power sector such as reducing interest burden ondiscoms by allowing states to take over the bulk of their debt, reduce the cost of power, increase operational efficiencies of discoms by providing capital and infrastructure like coal linkages and reduce in AT&C and transmission losses.


Know about Lakshadweep:
♦ Capital – Kavaratti
♦ Administrator – Farooq Khan

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