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Going by the current performance, the Centre is likely to miss the final target for reducing losses of the State power distribution utilities (Discoms) under the Ujjwal Discom Assurance Yojna (UDAY).
The performance in the second half of the current financial year will be crucial for achieving the targets set under the Ujjwal Discom Assurance Yojna (UDAY).
According to the latest data shared on the UDAY portal, nationwide Discom losses widened to pre-UDAY levels (November 2015) during the quarter ended June 2019. With the nationwide average AT&C losses (Aggregate Technical & Commercial losses) coming in at 22 per cent by June-end, most Discoms in the country are far from the 15 per cent target set for financial year 2019-20.
For the full year, AT&C losses are being pitched closer to 18 per cent.
Going by the current trend, the Centre is likely to miss the final target under UDAY.
In November 2015, the Ministry of Power said that operational efficiency improvements such as compulsory smart metering, upgradation of transformers and meters, among others, and energy efficiency measures such as efficient LED bulbs, agricultural pumps, fans and air-conditioners will reduce the average AT&C loss from around 22 per cent to 15 per cent and eliminate the gap between Average Revenue Realised (ARR) and Average Cost of Supply (ACS) by 2018-19.
The realistic timeline for achieving this goal was set at 2019-20 end since Uttar Pradesh, Bihar, Jammu and Kashmir, Madhya Pradesh, Assam and Meghalaya joined the UDAY scheme a little later than other States.
“The lowering of ARR-ACS gap is a parameter to be watched out for as it directly correlates with the financial health of the power distribution company. The average losses on power supplies have come down from ₹59,000 crore when UDAY was launched to ₹26,000 crore now. They even fell to as low as ₹15,000 crore last year. The losses may have increased due to higher supplies in an election year,” an official monitoring the progress of the UDAY scheme told BusinessLine .
“We are not very close to eliminating the gap, but we are in the right direction to reform the sector,” he added.
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