Union Cabinet approves scheme to allow power distribution companies to convert debt

Q.  Union Cabinet has approved a scheme whereby discoms in select states can convert debt to ________.
- Published on 06 Nov 15

a. State Bonds
b. Debentures
c. Shares
d. Dividends

ANSWER: State Bonds
 
Union Cabinet has approved a scheme whereby power distribution companies in select states can convert debt into state bond and roll out steps to improve efficiency in power plants. Plan is called UDAY/ Ujwal Discom Assurance Yojana. It will shift 75% of their burden from them to state balance sheets resulting in interest cost savings of 3 to 5 percent.

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