States could get more time to issue bonds under the UDAY (Ujwal DISCOM Assurance Yojana) scheme. Indianmandarins has learned that the Power Ministry has finalized a proposal seeking an extension of the timeline for issuance of UDAY bonds by States. It is expected to be taken up soon by the Cabinet Committee on Economic Affairs. Fearing that a glut of power sector bonds could hamper borrowing plans of the States and the Centre as well as impact the financial restructuring scheme of electricity distribution utilities, the government proposes to extend the timeline. "There has to be enough appetite for these bonds. Though they are to be privately placed, they should also not hamper the bond issuance programmes of the Centre or private players," said a senior government official privy to the development. Under the scheme, States are expected to issue bonds of about ₹4 lakh crore - or 75 percent of the outstanding debt of Discoms. Eight of the 19 States under the scheme have already issued bonds of nearly 01 lakh crore in 2015-16. Out of the 19 States that agreed to join the UDAY, so far 10 have signed formal agreements and eight have issued bonds.