UPSC IAS - 2016
Which one of the following is a purpose of ‘UDAY’, a scheme of the Government?
Year Asked: 2016
Correct Answer
D. Providing for financial turnaround and revival of power distribution companies
Detailed Explanation
The correct answer is D. UDAY stands for Ujwal DISCOM Assurance Yojana, launched in November 2015. It was designed to pull the state power distribution companies (DISCOMs) out of their accumulated losses and debt, which had reached very large levels. The scheme let states take over a part of DISCOM debt, pushed for better operational efficiency such as loss reduction and metering, and tied these steps to a financial turnaround.
Why the others are wrong:
- A describes entrepreneurship and start-up support in renewables. That falls under the Ministry of New and Renewable Energy and its programmes, not UDAY.
- B refers to universal household electrification. That was the job of Saubhagya (Pradhan Mantri Sahaj Bijli Har Ghar Yojana, 2017), not UDAY.
- C describes a long-term shift away from coal. UDAY does not mandate fuel replacement; it is about the distribution sector's finances.
The core concept is the stressed power distribution sector, where poor billing, high technical and commercial losses and weak tariff recovery leave DISCOMs dependent on state support. For Mains GS-3 (infrastructure and energy) this links to fiscal federalism, state finances and the reform of the power sector. Note that UDAY's operating timeline and the restructuring details have been revised since 2016, so check the current position before quoting it in an answer.
Trap: Candidates confuse UDAY with Saubhagya because both are power schemes launched in the same period. Remember that UDAY is about DISCOM finances and Saubhagya is about household connections.
This question appeared in UPSC Prelims 2016 GS Paper-1.
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