July 29, 2017

Uday scheme: Gap between average cost of power supply and average revenue of discoms narrows down

The gap between average cost of power supply and average revenue of state power distribution companies has narrowed showing positive impact of the Centre’s Ujwal Discom Assurance Yojana (Uday), a power ministry statement said.

The gap, however, continues to increase in four states of Karnataka, Kerala, Punjab and Assam due to various reasons including operational inefficiency, high pilferage and low collections.

A state-wise analysis shows that Uday is resulting in significant improvement across profitability and operational parameters. Of the 27 states and union territories that joined the scheme, 23 are exhibiting improvement in aggregate technical and commercial loss reduction or narrowing of gap between power costs and revenue.

“States like Rajasthan and Haryana have seen a significant reduction in power theft as well as a reduction in financial losses. Some states like Tamil Nadu and Andhra Pradesh have low AT&C loss but are benefitting significantly due to the reduction in cost of power resulting in lower losses. Few states like Jharkhand and Bihar have reduced power theft & are expected to also see corresponding benefits in financial loss reduction,” the statement said.

ET View: Stamp out power theft
The reduction by itself is hardly enough. In a scenario of rising generation and supply, even a narrower gap can mean much higher aggregate technical and commercial losses. The massive revenue leakage in distribution pan-India suggests rampant theft of power and attendant—albeit surreptitious— political patronage. This must change, fast.


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