One of the main reasons attributed to the failure is govt’s unfulfilled promise of taking over 75% of the discom’s debt
Chennai: Centre’s flagship Ujwal Discoms Assurance Yojana ( UDAY ) scheme failed to revive the financial health of Tamil Nadu ’s state-owned power utility, according to the CAG report on state finances 2024-25. One of the main reasons attributed to the failure is govt’s unfulfilled promise of taking over 75% of the discom’s debt. Similarly, the revamped distribution sector scheme (RDSS), which was introduced in 2021, is also still in the initial stages of implementation, according to the report. The total outlay approved for Tamil Nadu stood at ₹28,731.74 crore which includes ₹19,163.5 crore for smart metering and ₹9,568.24 crore for loss reduction work. The report also has highlighted state govt’s financial support in the form of subsidy and grants, increased by 314% in 11 years, from ₹5,947.09 crore in 2013–14 to ₹24,636.98 crore in 2024–25.
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“TN govt was obligated to take over 75% of the debt (₹56,317 crore) but it ultimately took over only 34.38% (₹22,815 crore), citing financial constraints,” said the report. Smart metering, however, did not take off in the state yet. Download the TOI App.
Union power ministry launched UDAY scheme in Nov 2015 with the objectives of financial turnaround of DISCOMs and improving their operational efficiency to provide affordable and accessible round-the-clock power. Tamil Nadu entered the scheme in Jan, 2017. However, in contract to the primary objective of reduction in gap between average cost of supply (ACS) and average revenue realised (ARR) to zero by 2018-19, the gap in fact worsened from (-) 0.60 per unit of electricity in 2015-16 to (-) 1.07 in 2019-20, with total outstanding debts rising from ₹81,312 crore to ₹1.23 lakh crore crore as on March 2020.