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Besides Ujwal DISCOM Assurance Yojana (UDAY) fading to engineer a reversal in DISCOM finances, government needs to revise incentive structures. Critically analyse the statement.

Topic:  Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

5. Besides Ujwal DISCOM Assurance Yojana (UDAY) fading to engineer a reversal in DISCOM finances, government needs to revise incentive structures. Critically analyse the statement. (250 words)

Indian Express

Why this question:

Almost five years after the launch of the Ujwal DISCOM Assurance Yojana (UDAY), there are indications that the power sector is once again in trouble. The article traces the performance of the scheme so far and brings out detailed deliberation of DSICOM finances.

Key demand of the question:

Discuss the issues of power sector in India in general and specifically with respect to the financial concerns of state DISCOMs. Highlight the need for efforts by the government in different perspectives.

Directive:

Critically analyze – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgment.

Structure of the answer:

Introduction:

Briefly highlight the issue.

Body:

In the recent past, several initiatives have been taken to address the challenges in the power sector.  These include structural changes in the regulatory framework as proposed by the Electricity (Amendment) Bill, 2014, and more recently, the UDAY scheme to address financial issues being faced by companies distributing electricity. 

Discuss what challenges are posed by the DSCOMs, why have the restructuring policies failed in the past.

Suggest what government should do to address these constraints.

Conclusion:

Conclude that a multi-pronged approach is the need of the hour.