After the second volume of the Economic Survey pointed out that the Ujwal Discom Assurance Yojana (Uday) has led to an increase in the state GFD-GDP (gross fiscal deficit-gross domestic product) ratio, the Centre on Wednesday said the process of states issuing discom debt bonds has now been completed. Governments of 16 states have taken over around Rs 2.32 lakh crore debt of their discoms as per Uday conditions. Out of this, Rs 2.09 lakh crore of their discom debts are under borrowing exemption, which will not to be included in the calculation of fiscal deficit of respective states in the financial years FY16 and FY17. As of now, the participating discoms will have to issue bonds worth about Rs 37,000 crore, the statement by the government said.
The debt takeover helped in lowering interest rates to 7%-8.5% from around 11-12%, resulting in discoms saving Rs 15,000 crore till March. However, the Economic Survey said that the GFD-GDP ratio was 3% in FY17, 0.7 percentage points higher than what it would have been without Uday bonds.
The GFD-GDP ratio of states who have issued Uday bonds is higher than the states who have not. The GFD-GSDP (GSDP: Gross state domestic product) for Haryana and Rajasthan is seen to have doubled in FY17 from FY15 levels. Haryana and Rajasthan have issued bonds worth Rs 25,951 crore and Rs 59,722 crore, respectively.
Under Uday, state governments are required to take over 75% of the short-term liabilities of their respective discoms (as in September-end 2015), 50% in the first year (FY16) and the balance in FY17.