Union Government and Bihar Government on 22 February 2016 signed a Memorandum of Understanding (MoU) with the DISCOMs of Bihar (North Bihar Power Distribution Company Limited, and South Bihar Power Distribution Company Limited) under the Scheme Ujwal DISCOM Assurance Yojana (UDAY) for operational and financial turnaround of the DISCOMs.
With this, Bihar became sixth state to sign MoU with Union Government for power scheme UDAY after Andhra Pradesh, Rajasthan, Uttar Pradesh, Chhattisgarh and Jharkhand. Gujarat has also signed the MoU for operational turnaround, considering the healthy financial position of the DISCOMs of the State.
An overall net benefit of approximately 9000 crore rupees would accrue to the State by opting to participate in UDAY, by way of savings in interest cost, reduction in Aggregate Technical and Commercial (AT&C) and transmission losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.
Benefits for the People of Bihar
Higher demand for power from DISCOMs would mean higher PLF of Generating units and therefore, lesser cost per unit of electricity thereby benefitting consumers.
The DISCOMs would also increase power supply in areas with reduced AT&C losses. The scheme would allow speedy availability of power to around 1152 villages and 160.60 lakh households in Bihar that are still without electricity.
Availability of 24x7 power to hitherto unconnected villages and households etc. would boost the economy, promote industries, thereby improving employment opportunities and see Bihar develop into one of the leading industrialised States in India.
The Scheme UDAY was launched by the Union government on 20 November 2015 to ensure a sustainable solution to enable the distribution utilities across the country to break out of a long standing debt of almost 4.3 Lakh crore rupees.
It is an effort to make the DISCOMs financially independent and operationally healthy, to be able to supply adequate power at affordable rates, through 100% Village electrification and 24X7 Power For All.
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