The Survey has taken a hard look at discoms’ revival scheme – Ujjwal Discom Assurance Yojana (UDAY).
Making a case for higher tariffs, the Survey notes, “States with the highest losses are those where tariffs fail to cover costs on average”.
In States such as Rajasthan, Tamil Nadu, Jharkhand, Madhya Pradesh and Uttar Pradesh (top ranking States in loss distribution), the per unit average tariff (AT) is lower than the average cost of supply (ACS).
It notes that after UDAY was launched, 15 States have issued tariff-revisions for fiscal 2017-18 by their respective Commissions to cover cost of supplies till date. But despite UDAY, Uttar Pradesh, Tamil Nadu and Himachal Pradesh have not reported any improvement in operational aspects like electricity access, DT metering and Feeder Metering.
UDAY has also been held responsible for upsetting the finances of state governments.
The Survey notes, “Under the UDAY scheme, States were allowed to issue non-SLR state development (SDL) bonds in the market or directly to banks or financial institutions holding the discom debt.
Due to these bonds, the state Gross Fiscal Deficit GFD/GDP ratio got increased by 0.7 percentage points to 3.6 per cent, it said.