Uttar Pradesh Electricity Loose and Privatisation Bid

UPPCL faces a ₹48,515 crore deficit, prompting plans to privatize DISCOMs in Purvanchal and Dakshinanchal. Learn about financial gaps, protests, infrastructure woes, and regional energy challenges in Uttar Pradesh’s power sector.

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Context

  • Recently Uttar Pradesh Power Corporation Limited chairman highlighted the crisis in the Electricity sector in UP and a bid for Privatisation.

About the News

  • UPPCL reported a ₹48,515 crore cash gap for FY 2024–25, largely from Purvanchal & Dakshinanchal regions of the State.
  • Plans are underway by the State Government to privatize 51% equity in these discoms to stem losses, while maintaining tariff regulation and protecting jobs.
  • UPPCL is aiming to retain 49% and regulatory control of the DISCOM’S.
  • The move is expected to cut theft, improve billing, and could even stabilize or reduce consumer tariffs.

Other Facets

  • Purvanchal and Dakshinanchal have contributed to the lion's share of this deficit.
  • Over the past five years expenses have grown by 8.3 while revenue has lagged by 6.7 leading to a cash gap increase of 12.7 annually.
  • The Allahabad High Court  has recently rejected a PIL opposing privatization of the two DISCOMs, stating the petition lacked concrete evidence, thus greenlighting the process.

Widespread Opposition and Protests

  • Recently, over 2.7 million electricity employees across India—including from UP—held a token strike against the privatization plan.
  • Worker groups claim the losses are exaggerated to justify privatization. For example, in Agra, UPPCL allegedly lost ₹2,434 crore by supplying cheaper power to Torrent Power—despite privatisation there—prompting calls to rethink the model.

Infrastructure, Demand & Efficiency Challenges

  • Summer peak demand surged from 30,618 MW in June 2024 to a projected 32,000–33,000 MW in 2025. 
  • UPPCL has procured additional power via banking arrangements and new plants to curb blackouts but distribution bottlenecks persist.
  • UP generates only ~5,000 MW locally, relying heavily on expensive external sources.
  • Since 2014, total losses across UP’s five Discoms topped ₹1.18 trillion in FY 2023–24. Purvanchal alone accounted for around ₹35,000 crore. 

About Purvanchal

  • It is located in the Eastern part of Uttar Pradesh.
  • It is bordered by  Bihar in the east, Madhya Pradesh in the south and Nepal in the north.
  • Major rivers flow through the region are Ganga, Ghaghara, Sarayu, and Gandak.
  • Languages spoken are Bhojpuri, Awadhi, Hindi.

About Dakshinanchal 

  • Located in Southern UP; overlaps heavily with the Bundelkhand region and parts of Braj.
  • It is bordered by Madhya Pradesh in the south and Rajasthan in southwest.
  • Languages spoken are Bundeli, Brajbhasha, Hindi.
  • The area geography is Rocky terrain, plateaus, and seasonal rivers.


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