India’s power distribution utilities have recorded a collective Profit After Tax (PAT) of ₹2,701 crore in FY 2024–25, marking a major turnaround for a sector that has reported losses for years. The positive performance follows a loss of ₹25,553 crore in FY 2023–24 and ₹67,962 crore in FY 2013–14, according to official data released by the Ministry of Power.
Union Power Minister Manohar Lal described the development as the beginning of a “new chapter” for the distribution sector, attributing the turnaround to sustained reforms and policy interventions. He said the improvement reflected the leadership and vision of Prime Minister Narendra Modi, noting that a strong power sector is essential to support India’s economic growth and its goal of becoming a developed nation.
The recovery has been driven by a series of reforms aimed at improving the financial and operational health of distribution companies (DISCOMs). Key initiatives include the Revamped Distribution Sector Scheme (RDSS), which focuses on infrastructure modernisation and accelerated smart metering, and additional prudential norms that link access to finance with performance benchmarks. Amendments to electricity rules have also enforced timely cost recovery, transparent subsidy accounting and prudent tariff structures.
Further measures such as the Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025, have introduced uniform accounting practices to enhance transparency, while the Electricity (Late Payment Surcharge) Rules have strengthened payment discipline across the power sector. States have also been incentivised to implement reforms through borrowing limits linked to performance metrics.
The impact of these measures is visible across key performance indicators. Aggregate Technical and Commercial (AT&C) losses have declined from 22.62 per cent in FY 2013–14 to 15.04 per cent in FY 2024–25. The gap between Average Cost of Supply and Average Revenue Realised (ACS–ARR) has narrowed sharply from ₹0.78 per unit to ₹0.06 per unit over the same period, indicating improved cost recovery.
Outstanding dues of distribution utilities to generating companies have fallen by 96 per cent, from ₹1.39 lakh crore in 2022 to ₹4,927 crore by January 2026. Payment cycles have also shortened significantly, from 178 days in FY 2020–21 to 113 days in FY 2024–25.
The Power Ministry’s sustained engagement with states and Union Territories, including regional conferences of energy ministers held across the country in 2025, played a key role in driving reforms. The Ministry expects the positive momentum to continue, with further recommendations under consideration by a Group of Ministers focused on improving the long-term financial viability of DISCOMs.
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