Power replay (Indian Express)

• Mains Paper 3: Economy 
• Prelims level: Ujwal DISCOM Assurance Yojana
• Mains level:  Energy sector reforms 

Context:

• Almost five years after the launch of the Ujwal DISCOM Assurance Yojana (UDAY), there are indications that the power sector is once again in trouble. 
• The losses of state-owned distribution companies (discoms) risen, but their dues for power purchases have also surged. 
• At the end of November 2019, dues owed by discoms to power producers, both independent and state-run entities, stood at Rs 80,930 crore.
• Rs 71,673 crore extends beyond the allowed grace period of 60 days. 
• Rajasthan leads the states with the most dues, followed by Tamil Nadu and Uttar Pradesh.

Reasons behind the failure: 

• The UDAY scheme has failed to engineer a sustainable turnaround in the fortunes of the beleaguered distribution segment.
• The weakest link in the power chain. 
• The Centre is contemplating yet another scheme to address the issues that continue to plague the sector. 
• But, as distribution falls under the purview of states, rather than adopting an approach similar to that of the past schemes, the new scheme should focus on altering the incentive structure at the state level so as to ensure the achievement of targets. 
• The UDAY scheme, which involved state governments taking over the debt of discoms, had three critical components:
• A reduction in the aggregate technical and commercial (AT&C) losses, 
• The timely revision of tariffs, and 
• To elimination of the gap between average per unit of cost and revenue realised.

Way forward:

• The new plan, reportedly, aims to address these issues by reducing electricity losses, eliminating the tariff gap, smart metering, privatising discoms, and having distribution franchisees. 
• These would be welcome measures. 
• But, along with these, the Centre should also look at altering the incentive structures of states in order to ensure compliance. 
• Stiff penalties need to be imposed for not meeting the targets laid out in the new scheme.

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1) With reference to the H9N2 virus, consider the following statements:
1. It is a subtype of the influenza A virus, which causes human influenza as well as bird flu.
2. H9N2 viruses are found only in Asia. 
Which of the statements given above is/are correct?
A.   1 only
B.   2 only
C.   All the above
D.   None 

Answer: A
Mains Questions:
Q.1) What are the major challenges faced by the govt to run Ujwal DISCOM Assurance Yojana effectively?