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Is the UDAY data being cooked up? PDF Print E-mail
Tuesday, 10 April 2018 04:05
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The discrepancies in the numbers are disconcerting – it doesn’t match with other sources, and fluctuates a lot

 

The Ujwal Discom Assurance Yojana (UDAY), as FE has just reported, has begun to bite in a big way, with state governments now having to account for the UDAY bonds in their budget since the two-year moratorium has expired. Apart from the interest on the UDAY bonds that has to be accounted for in each state budget in FY18, 5% of the losses of each state’s electricity board (SEB) in FY17 also have to be included in the FY18 budget; in FY19, 10% of the SEB losses in FY18 have to be moved to the state’s budget. In the case of Rajasthan, for instance, the UDAY costs were as high as 0.74% of its FY18 GDP, as a result of which the state’s fiscal deficit has shot up from the budgeted 2.99% of state GDP to 3.46%. In the case of Bihar, the state’s fiscal deficit is likely to end up at 7.5% of state GDP from the planned 2.87% for FY18.

It is not clear how long this will last since, as this newspaper has reported before, there is a big gap between the UDAY targets and what has actually been achieved. Bihar, for instance, was supposed to achieve ATC losses of 36.42% in FY17 but managed to cut this to just 41.75%; in the case of Uttar Pradesh, it was to lower ATC losses to 28.08% but managed just 30.21%. In the case of Rajasthan, the ATC numbers looked a lot better since, against the FY17 target of 23.09%, the state achieved 23.81%. Yet, when you look at the gap between the cost of supply and the revenue earned per unit of electricity, this was to be reduced to 41 paise in FY17, but the actual gap in that year was as high as 74 paise.

Even more worrying, as Vivek Sharma, Crisil’s senior director Infrastructure Advisory, pointed out in an article in Business Standard on Monday, there seems to be a question mark over the UDAY data. Sharma argues that the ATC losses reported by the Power Finance Corporation (PFC) are different from those reported by various state electricity regulatory commissions (SERC) and the UDAY scheme. In the case of Chhattisgarh, for instance, the state regulator reported ATC losses for 38.43% in FY15 versus 27.84% by the PFC. Do the same analysis for FY16 and you find that, in Andhra Pradesh, while PFC is reporting a 13.6% ATC loss, the UDAY data is showing a 9.41% loss and, in the case of Haryana, PFC shows a 32.4% ATC loss, while UDAY shows a lower 29%—which data is to be believed? Also, if ATC losses as reported by UDAY fluctuate as much as they do, instead of moving steadily in one direction, you wonder about the accuracy of the data. Sharma reports ATC losses falling in Uttarakhand between March 2015 and March 2016 and then jumping dramatically in December 2016; in the case of Punjab, ATC losses were quite steady between March 2015 and December 2016 and then almost doubled by January 2018. FE found that, in most states, ATC losses rose quite dramatically between FY17 and Q3FY18. In Punjab, FY17 ATC losses were 17.6% versus 32.6% in Q3FY18, while for Jharkhand, the increase was from 29.9% to 39.3%, and from 25.2% to 31.8% in the case of Madhya Pradesh. Not surprising, then, that the UDAY portal says the data is collected “without subjecting the same to any expert or independent audit” and that “if any person/entity chooses to rely on the contents of this portal, they may choose to do so at their own risk”. How policy-makers are expected to fashion policy when the data is so unreliable, though, is anyone’s guess.

 

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