Union Government gives nod for issuance of UDAY bonds to four states
The Union Finance Ministry has approved the proposal of four states for the issuance of Ujjwal Discom Assurance Yojana (UDAY) bonds.
These four states are Uttar Pradesh, Rajasthan, Jharkhand and Chattisgarh. These states account for around about 35 per cent or around 1.5 lakh crore rupees of the outstanding loans of State electricity distribution utilities in the country.
These bonds will be issued by these states as per the UDAY Scheme which allows state governments to take over 75 per cent of power distribution companies (DISCOMs) debt and pay back lenders by issuing bonds.
The scheme also provides that remaining 25 per cent of the debt to be paid back through discom-issued bonds. Total discom debt in the country amounts to Rs.4.3 lakh crore.
So far total 16 states have agreed to join UDAY Scheme and last one to join were Manipur and Tripura. Six states have signed the UDAY contract with the Union Government.
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Month: Current Affairs - March, 2016