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Bihar 2nd non-NDA state to join UDAY scheme, to save Rs 9k cr

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New Delhi: Bihar has become the second non-NDA state after Uttar Pradesh to formally join the UDAY scheme, meant for revival of debt-ridden power distribution utilities, which will help the state save Rs 9,000 crore. The tripartite Memorandum of Understanding (MOU) among the Power Ministry, Bihar government and discoms of the state (North Bihar Power Distribution Company Ltd and South Bihar Power Distribution Company Ltd) was signed under the Ujwal discom Assurance Yojana (UDAY) here today.

Jharkhand, Chhattisgarh, Rajasthan, Uttar Pradesh and Gujarat have already inked such MoUs. Union Power Minister Piyush Goyal who was present on the occasion said: “Elections had barely got over and within 15 or 20 days, I received the response from the Government of Bihar confirming their participation in the UDAY Yojana.”

He added the Centre stands committed on all assurances in its Bihar package of over Rs 1.65 lakh crore that includes setting up of a 4,000-MW ultra mega power project at Banka.


Goyal informed that a mine has also been alloted for the project and the government has given coal linkage to Barh power project in Bihar and eventually the cheaper coal would reduce the cost of power at the plant by Rs 2 per unit.

The minister said in addition to the package, Bihar will save Rs 9,000 crore by way of interest cost savings, reduction in AT&C and transmission losses, interventions in energy efficiency and coal reforms, among others during the period of turnaround (next three years).

He also told that in the last 20 months of the NDA rule, 2,900 MW of power has been given from the Centre pool besides supply of 980 MW of electricity from Bhutan.

The minister also spoke about Buxar thermal power plant, which will supply 85 per cent of the electricity generated to the state.

Goyal assured that a large quantity of bonds to be issued by state governments and by discoms would be subscribed by provident funds and insurance companies. The union government is expecting Rs 60,000 crore bonds to be issued by March. Six more states including Andhra Pradesh, Uttarakhand, Punjab and Haryana are negotiating with the Centre to join UDAY scheme out of 17 states, which have agreed in principle to join the scheme.

With the signing of MoU with Bihar, about 33 per cent of the discom debt, around Rs 1.40 lakh crore, would be restructured.