A reliable and modern power distribution network is vital to meet India’s rising electricity demand. As discoms face increasing load, green energy integration, and growth in rooftop solar and electric vehicles (EVs), they must upgrade infrastructure and adopt new business models. However, operational and financial challenges persist. Power Finance Corporation Limited’s (PFC) report notes a rise in aggregate technical and commercial (AT&C) losses to 16.12 per cent in 2023-24, highlighting ongoing inefficiencies. To address this, the government launched the Rs 3 trillion Revamped Distribution Sector Scheme (RDSS), offering performance-based support to enhance discom efficiency, reduce losses and strengthen long-term sustainability.
Performance of discoms
Overall AT&C losses for discoms increased from 15.11 per cent in 2022-23 to 16.12 per cent in 2023-24. Among state sector utilities, Dakshin Gujarat Vij Company Limited (DGVCL) registered the least AT&C loss (1.31 per cent). Around 37 utilities had AT&C losses lower than the all-India national average. The top five among them were DGCVL (1.31 per cent), India Power Corporation Limited (IPCL) (4.07 per cent), Tata Power Delhi Distribution Limited (TPDDL) (5.91 per cent), Adani Electricity Mumbai Limited (AEML) (6.12 per cent) and BSES Rajdhani Power Limited (6.58 per cent). At the other end of the spectrum were state discoms such as the Nagaland PD (47.11), Arunachal PD (44.56 per cent), Ladakh PD (42.46 per cent), Mizoram PD (34.85 per cent) and Jharkhand Bijli Vitran Nigam Limited (31.17 per cent), which had the highest AT&C losses.
Billing efficiency decreased to 86.91 per cent in 2023-24 from 86.98 per cent in 2022-23. The top five utilities with the highest billing efficiency as per the report were DGVCL (98.69 per cent), IPCL (97.32 per cent), New Delhi Municipal Council (96.08 per cent), Brihanmumbai Electric Supply and Transport (95.88 per cent) and AEML (94.13 per cent).
The aggregate losses for discoms decreased from Rs 594.97 billion in 2022-23 to Rs 255.53 billion in 2023-24, a decrease of 57.05 per cent. Based on PFC’s data, the states with the highest loss levels were Karnataka, with an aggregate loss of Rs 85.5 billion, followed by Uttar Pradesh at Rs 70.58 billion and Telangana at Rs 63.51 billion. Meanwhile, state utilities that reported the highest profits were Gujarat, with a profit of Rs 43.39 billion, followed by Delhi at Rs 16.81 billion.
Meanwhile, aggregate losses on tariff subsidies received, excluding regulatory income and revenue grants under the Ujwal Discom Assurance Yojana (UDAY) for loan takeover decreased from Rs 729.05 billion in 2022-23 to Rs 319.7 billion in 2023-24.
Gross energy sold by discoms was 1,252,633 MUs in 2023-24, registering a year-on-year increase of 6.56 per cent compared to 1,175,474 MUs in 2022-23. The highest energy sales were reported by the states of Maharashtra (139.47 BUs), Uttar Pradesh (113.48 BUs), Gujarat (109.21 BUs) and Tamil Nadu (92.74 BUs).
Revenue from operations, including billed tariff subsidies, increased by 13.57 per cent from Rs 8,458.41 billion in 2022-23 to Rs 9,605.95 billion in 2022-23. The top revenue-earning discoms for 2022-23 were Maharashtra State Electricity Distribution Company Limited (Rs 996.11 billion), The Tamil Nadu Generation and Distribution Corporation (Rs 636.75 billion), Southern Power Distribution Company of Telangana Limited (Rs 321.02 billion), West Bengal State Electricity Distribution Company Limited (Rs 284.64 billion) and DGVCL (Rs 252.09 billion).
Tariff subsidy billed by discoms increased from Rs 1,690.16 billion in 2022-23 to Rs 2,107.84 billion in 2023-24. As a percentage of the total revenue, tariff subsidy billed by utilities increased from 17.56 per cent in 2022-23 to 20.21 per cent in 2023-24. Tariff subsidy released by state governments as a percentage of the tariff subsidy billed by discoms is at 97.4 per cent in 2023-24 compared to 108.58 per cent in 2022-23.
The gap in tariff subsidy billed narrowed from Re 0.41 per kWh in 2022-23 to Re 0.15 per kWh in 2023-24. The gap in tariff subsidy received, excluding regulatory income and revenue grant under UDAY for loan takeover, improved from Re 0.5 per kWh in 2022-23 to Re 0.19 per kWh in 2023-24.
The cash-adjusted gap also improved from Re 0.57 per kWh in 2022-23 to Re 0.39 per kWh in 2023-24. Receivables for the sale of power (number of days) remained constant at 115 days as of March 31, 2024.
Payables for the purchase of power (number of days) improved from 129 days as of March 31, 2023, to 132 days as of March 31, 2024. The state utility with the lowest payables, with 0 days payable for power purchase, is Kanpur Electricity Supply Company Limited, followed by DGVCL (one day), Uttar Gujarat Vij Company Limited (two days), and Paschim Gujarat Vij Company Limited (three days).
Discoms’ net worth continues to be negative at Rs 1,733.65 billion as of March 31, 2024. Total borrowings increased from Rs 6,848.36 billion as of March 31, 2023, to Rs 7,526.77 billion as of March 31, 2024.
Update on RDSS
The central government launched the RDSS to improve the efficiency and financial health of power discoms. With a total outlay of Rs 3.04 trillion (including Rs 976 billion as government support) from FY 2021-22 to FY 2025-26, the scheme offers result-linked financial assistance to discoms meeting set benchmarks. Implemented by REC Limited and PFC, the RDSS aims to cut AT&C losses to 12-15 per cent and eliminate the average cost of supply-average revenue realised gap by 2024-25. It comprises two parts: Part A focuses on smart metering and infrastructure upgrades, while Part B supports training and capacity building.
According to the RDSS portal (accessed on June 17, 2025), around Rs 1,481.58 billion has been sanctioned (aggregate value of detailed project reports approved) for loss reduction works and Rs 1,306 billion for smart metering works. The overall physical progress of loss reduction works and smart metering works under the RDSS stands at 28.34 per cent and 9.86 per cent respectively. So far, under the scheme, about 198 million prepaid smart meters, 5.3 million distribution transformer (DT) meters and 195,976 feeder meters have been sanctioned across 30 states/union territories (UTs).
Additionally, physical works for system strengthening have gathered significant momentum across various states, particularly in Maharashtra, Madhya Pradesh, Gujarat, Tamil Nadu and Karnataka. As part of the ongoing initiatives under the RDSS, key infrastructure upgrades include the replacement of ageing lines and transformers to reduce technical losses, installation of 11 kV and 33 kV feeders to improve load handling and reliability, and deployment of ring main units, automation systems and digitalised substations. Over 200,000 ckt km of lines and more than 300,000 DTs are being upgraded or replaced under the scheme. Moreover, feeder metering has achieved 98 per cent coverage at the national level, a critical step towards enabling energy accounting and auditing at the substation level.
Smart metering progress
As per the NSGM portal (assessed on June 18, 2025), 32.11 million smart consumer meters have been installed in the country. Notably, during 2024-25, 14.7 million smart consumer meters were installed – much higher than meters installed in the previous year (4.84 million). Overall, around 224 million smart consumer meters, 5.3 million DT meters and 2.05 million feeder meters have been sanctioned across the onboarded states. Further, over 143 million consumer smart meters have been awarded, which is 64 per cent of the total sanctioned meters. Over 4.7 million (89 per cent) of the sanctioned DT meters and 170,304 (83 per cent) of the sanctioned feeder smart meters have been awarded.
With the government mandating the transition to a complete smart metering system, replacing all the existing 250 million meters by 2025, the pace of smart meter awards and installations is expected to accelerate in the coming months. Bihar leads with the highest installation of smart meters, totalling 6,674,087, followed by Assam with 3,554,812. Uttar Pradesh trails closely with 3,001,314 meters installed and Maharashtra at 2,311,996 meters. Madhya Pradesh and Gujarat have installed 2,207,341 and 1,263,066 meters respectively.
Key priorities under RDSS
The Ministry of Power (MoP) has urged states/UTs to fast-track RDSS implementation, focusing on infrastructure upgrades and prepaid smart metering. States must install smart meters in all government establishments by August 2025 and for commercial, industrial and high-load consumers by November 2025. Timely clearance of government dues and resolving issues such as right of way are key. Smart meters, powered by artificial intelligence (AI)/machine learning (ML) analytics, are seen as vital for improving efficiency and consumer empowerment.
To accelerate progress, the MoP will tighten performance monitoring, expedite fund disbursals and showcase early successes. Lagging states will receive additional support through workshops and field visits. Technology platforms such as the RDSS portal and the National Feeder Monitoring System will be used for tracking, gap analysis and evaluation. Strengthening consumer engagement, cybersecurity and interoperability will also be a focus.
RDSS 2.0
RDSS 2.0 is envisioned as an enhanced version of the current scheme, aiming to bridge infrastructure and technology gaps. It would focus on modernising substations, transmission lines and underground cabling, while integrating advanced technologies such as AI/ML for better load forecasting and demand management. The scheme also plans to promote smart homes, efficient appliances and peer-to-peer energy trading via smart meters. With rising power demand, renewable energy integration and EV growth, RDSS 2.0 would support deeper automation and long-term sector resilience.
Conclusion
Over the years, improvements in AT&C losses and reduction in aggregate financial losses indicate positive momentum; however, challenges such as high borrowings, negative net worth and uneven smart metering progress remain. The RDSS has played a pivotal role in driving reforms, with significant investment in infrastructure modernisation and digitalisation. The proposed RDSS 2.0 presents an opportunity to further deepen reforms by integrating advanced technologies, enabling consumer-centric innovations, and enhancing distribution network resilience in the face of rising demand and clean energy integration. Going forward, an extension of the RDSS would be crucial to realising its full potential and ensuring the long-term financial and operational sustainability of India’s power distribution sector.
