Tamil Nadu joins UDAY scheme

92% of the country's discom debt covered

by Saher Naqvi

On 9 January 2017, Tamil Nadu became the 21st state to join the Ujwal Discom Assurance Yojana (UDAY) scheme, which is meant for revival of debt stressed discoms. With this, 92 per cent of the country’s discom debt has been covered under the scheme.

Under the UDAY scheme, the state will take over 75 per cent of Rs. 304.2 billion debt of Tamil Nadu Generation and Distribution Corporation (TANGEDCO). The scheme also provides for the balance debt to be re-priced or issued as state guaranteed discom bonds, at coupon rates around 3-4 per cent less than the average existing interest rate.

The state is expected to gain an overall net benefit of over Rs. 110 billion through 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.

Under the agreement, Tamil Nadu and TANGEDCO will bring about operational efficiency through compulsory feeder and distribution transformer metering, consumer indexing and geographic information system (GIS) mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, reduction in transmission losses and increased power supplies in areas with reduced (AT&C) losses.

Earlier, the state had made certain demands, including relaxation of the Fiscal Responsibility and Budget Management (FRBM) norms, which the Centre has been unwilling to do. Former chief minister J Jayalalithaa had sought a 15-year relaxation in FRBM, claiming that the debt takeover would affect the state’s fiscal deficit during the entire tenure of the bond.

However, at the signing of the memorandum of understanding (MoU), Minister of State for Power, Piyush Goyal said that no FRBM relaxation has been allowed under UDAY for the state.

UDAY was launched by the Centre on 20 November 2015 with an aim to reduce financial distress among state discoms as it has been preventing them from buying power.

References
1. http://www.thehindu.com/todays-paper/article17015996.ece
2. http://www.financialexpress.com/economy/tamil-nadu-joins-uday-scheme/502490/
CMIE STATISTICS
Unemployment Rate
Per cent
5.5 -0.0
Consumer Sentiments Index
Base September-December 2015
94.7 0.0
Consumer Expectations Index
Base September-December 2015
96.5 0.0
Current Economic Conditions Index
Base September-December 2015
91.9 0.0
Quarterly CapeEx Aggregates
(Rs.trillion) Mar 16 Jun 16 Sep 16 Dec 16
New projects 3.31 1.54 2.34 1.42
Completed projects 2.26 0.90 2.15 0.76
Stalled projects 1.04 1.32 0.35 0.44
Revived projects 0.63 0.42 0.51 0.17
Implementation stalled projects 0.92 0.50 0.57 0.79
Updated on: 23 Feb 2017 9:20AM
Quarterly Financials of Listed Companies
(% change) Mar 16 Jun 16 Sep 16 Dec 16
All listed Companies
 Income -0.2 -0.9 2.1 6.4
 Expenses 0.9 -0.4 1.8 6.7
 Net profit -29.1 -3.5 15.3 36.9
 PAT margin (%) 4.9 6.9 7.0 6.0
 Count of Cos. 4,395 4,353 4,313 4,204
Non-financial Companies
 Income -2.1 -2.5 0.6 6.1
 Expenses -3.9 -2.9 -0.2 7.7
 Net profit 4.8 10.3 27.5 21.0
 PAT margin (%) 6.2 7.4 7.0 6.1
 Net fixed assets 3.8 -9.2
 Current assets 3.1 8.1
 Current liabilities 10.6 11.5
 Borrowings 6.7 3.1
 Reserves & surplus 7.9 8.6
 Count of Cos. 3,455 3,426 3,393 3,316
Numbers are net of P&E
Updated on: 23 Feb 2017 9:28AM
Annual Financials of All Companies
(% change) FY13 FY14 FY15 FY16
All Companies
 Income 11.9 9.3 4.3 0.2
 Expenses 12.1 9.2 4.3 0.3
 Net profit 1.0 -4.2 2.7 -12.1
 PAT margin (%) 3.6 3.2 3.3 3.4
 Assets 14.1 12.2 8.9 7.7
 Net worth 9.5 9.4 8.2 6.2
 RONW (%) 6.8 6.0 6.1 5.7
 Count of Cos. 23,087 20,259 18,916 14,317
Non-financial Companies
 Income 11.1 8.9 3.3 -1.1
 Expenses 11.4 8.6 3.4 -1.9
 Net profit -8.9 -5.6 -3.6 14.1
 PAT margin (%) 2.4 2.1 2.2 3.1
 Net fixed assets 12.9 11.3 12.3 10.8
 Net worth 7.7 8.3 6.6 5.0
 RONW (%) 5.4 4.8 4.8 6.1
 Debt / Equity (times) 1.1 1.1 1.1 1.0
 Interest cover (times) 2.0 1.9 1.9 2.1
 Net working capital cycle (days) 71 69 68 68
 Count of Cos. 17,721 15,860 14,813 11,415
Numbers are net of P&E
Updated on: 21 Feb 2017 3:48PM

Low government spending and low consumer expectations to keep growth subdued

Modest increase in capital expenditure; no incentive to private players

Rs.5.34 trillion or 3.2% of GDP