Restructuring scheme for discoms cleared

Aimed at bailing out debt ridden state-run power distribution companies (discoms), the Centre on Thursday approved a financial restructuring package.

The Union Cabinet chaired by Prime Minister Narendra Modi approved the ‘Uday’ (Ujwal Discom Assurance Yojana) scheme to financially turn around discoms that have  been severely indebted and make them strong,” Power Minister Piyush Goyal told reporters after the meeting.

“According to the package, states can take over, (by March 2016), 75 per cent of the discoms’ debts up to September 2015, by issuing special bonds at a price determined by the Reserve Bank at G-Sec rates plus 5  per cent,” Goyal said. This means, the state governments, which own the discoms, can take over 75 per cent of their debt as of September 30 and pay back lenders by selling bonds.