An announcement to this effect was made, late on Saturday evening, through a government order (GO) issued by the Uttar Pradesh Power Secretary Arvind Kumar.
According to the GO, the government will also continue to explore legal remedy through an intervener writ filed in Bombay High Court in the Reliance Nippon Assets versus DHFL case to seek return of funds.
In case, the court does not grant relief, the UPPCL will first be asked to mobilize funds through its sources. If the corporation is unable to generate that money, the Uttar Pradesh government will offer an interest-free bailout package to the corporation.
"The bailout money will be used to disburse PF amount invested by employees," the order said.
Uttar Pradesh Energy Minister Shrikant Sharma, meanwhile, said that the interest of employees is paramount and the department, after taking due assistance from attorneys, took the decision.
About 45,000 Uttar Pradesh Power Corporation employees, had been on a two day strike to demand return of their provident fund.
Half a dozen officials have already been arrested in connection with the alleged investment of Uttar Pradesh power employees' provident fund money.
The economic offences wing of the Uttar Pradesh police had also raided the residence of former UPPCL Managing Director (MD) A.P. Mishra. According to available records, nearly Rs 2,600 crore of the General Provident Fund of the employees was invested in scam-hit DHFL.
( With inputs from IANS )