Ujwal Discom Assurance Yojana (UDAY)

Ujjwal DISCOM Assurance Yojana (UDAY) is the financial turnaround and revival package for electricity distribution companies of India (DISCOMs) initiated by the Government of India with the intent to find a permanent solution to the financial mess that the power distribution is in.

• It allows state governments, which own the DISCOMs, to take over 75 percent of their debt as of September 30, 2015, and pay back lenders by selling bonds. DISCOMs are expected to issue bonds for the remaining 25 percent of their debt.
• Till now 31 states/UTs had joined this scheme Mizoram being the 27^th state to join. But later, Lakshadweep joined the scheme on 28 February, 2018, bringing the total of states and Union Territories covered to 32.
• According to a recent Reserve Bank of India report, the outstanding debt of states has increased to 25% of their combined GDP over the last five years. The total debt burden of India’s states is expected to touch Rs 52.58 lakh crore by the end of the financial year 2020, an 11.5% increase from the previous year 2018-19.