**Executive Summary**
This document presents the Indian government's response to a parliamentary query regarding the financial status of Power Distribution Companies (DISCOMs). It outlines government initiatives, including the Revamped Distribution Sector Scheme (RDSS), to improve DISCOM financial viability and reduce Aggregate Technical and Commercial (AT&C) losses. The response also includes an annexure detailing DISCOM-wise financial and operational parameters as of March 31, 2025.
**Key Points / Main Content**
* **Financial Position of DISCOMs:**
* DISCOM-wise AT&C loss, accumulated surplus/loss, and total borrowings as of March 31, 2025, are detailed in an annexure.
* **Government Initiatives to Address Financial Stress:**
* **Revamped Distribution Sector Scheme (RDSS):** Launched in 2021 to improve power supply quality and reliability. Fund release is linked to DISCOM performance.
* **Additional Borrowing Space:** State Governments can access extra borrowing (0.5% of GSDP) by undertaking power sector reforms, including improving DISCOM financial performance.
* **Prudential Norms for Loans:** Additional norms for loan sanctioning to State-owned power utilities are based on power distribution utilities performance against prescribed conditions.
* **Fuel and Power Purchase Costs Adjustment (FPPCA):** Rules for implementing FPPCA and cost-reflective tariff ensure passing through all prudent costs for electricity supply.
* **Subsidy Accounting:** Rules and Standard Operating Procedure have been issued for proper subsidy accounting and their timely payment.
* **Late Payment Surcharge Rules:** The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 were issued, requiring DISCOMs to clear legacy dues by June 3, 2022, and ensure timely clearance of current dues.
* **Progress Achieved:**
* National AT&C losses reduced from 21.91% in FY21 to 15.04% in FY25.
* The national Average Cost of Supply - Average Revenue Realized (ACS-ARR) gap narrowed from Rs. 0.69/kWh to Rs. 0.06/kWh.
* DISCOMs achieved a profit after tax (PAT) of Rs 2,701 crore for the first time.
* **Future Measures:**
* The draft National Electricity Policy (NEP) 2026, and Electricity (Amendment) Bill 2025, include measures such as mandatory cost-reflective tariffs, linking tariffs to indexes for automatic revision, and strengthening dispute resolution mechanisms.
**Impact Analysis**
* **State Governments**
* **Impact:** Increased focus on DISCOM financial performance for accessing additional borrowing space; contingent liabilities from DISCOMs may need recognition. Greater flexibility is provided to State Governments to continue to support specific consumer categories by providing advance subsidies on their behalf.
* **Action Required:** Undertake power sector reforms, monitor DISCOM performance, and comply with revised borrowing norms.
* **DISCOMs**
* **Impact:** Subject to performance-linked funding, mandatory legacy dues clearance, and potential tariff revisions.
* **Action Required:** Improve financial and operational parameters to secure funding, clear legacy dues, and implement cost-reflective tariffs.
* **Electricity Regulatory Commissions (ERCs)**
* **Impact:** Mandated to determine cost-reflective tariffs and potentially implement automatic tariff revision.
* **Action Required:** Ensure cost-reflective tariffs are determined and potentially implement automatic tariff revision mechanisms.
* **Consumers**
* **Impact:** Potential for changes in tariffs based on cost-reflectiveness; safeguarding of interests through various measures envisaged. Flexibility to State Governments to continue to support specific consumer categories by providing advance subsidies on their behalf ensuring that no consumer group is unduly burdened etc.
* **Action Required:** None specified in document.
Key Entities Referenced
Power Distribution Companies (DISCOMs): The financial and operational status of DISCOMs is the main subject of the question and answer.
Revamped Distribution Sector Scheme (RDSS): Key scheme to improve the financial and operational efficiency of the distribution sector.
Aggregate Technical and Commercial (AT&C) losses: Key indicator for assessing DISCOM performance.
Electricity (Late Payment Surcharge and Related Matters) Rules, 2022: Rules to improve payment discipline in the power sector.
National Electricity Policy (NEP) 2026: The policy under consideration which aims to bring in reforms to the electricity sector.
GOVERNMENT OF INDIA
MINISTRY OF POWER
LOK SABHA
UNSTARRED QUESTION NO.2109
ANSWERED ON 12.02.2026
FINANCIAL STRESS OF DISCOMs
2109. MS KANGNA RANAUT:
Will the Minister of POWER
be pleased to state:
(a) the present financial position of Power Distribution Companies (DISCOMs) in the
country, including broad indicators such as Aggregate Technical and Commercial
(AT&C) losses, outstanding dues and accumulated losses;
(b) the steps and schemes undertaken by the Government to address the financial stress
of DISCOMs including reforms related to tariff rationalisation, loss reduction, payment
discipline and operational efficiency;
(c) the progress achieved so far under these initiatives including improvements in
financial performance, reduction in losses and enhancement of service delivery; and
(d) the further measures proposed by the Government to ensure long-term financial
stability and viability of DISCOMs while safeguarding consumer interests?
A N S W E R
THE MINISTER OF STATE IN THE MINISTRY OF POWER
(SHRI SHRIPAD NAIK)
(a): As per the PFC’s 14th Annual Integrated Rating and Ranking report on Power
Distribution Utilities, the DISCOM-wise AT&C loss, accumulated surplus/loss and total
borrowings as on 31.03.2025 are placed at Annexure.
(b) to (d): (i) Government of India has been supporting the States to improve the financial
viability of their distribution utilities through various initiatives. Some of the key
initiatives taken are as under:
i. Revamped Distribution Sector Scheme (RDSS) has been launched in the year
2021 with the objective of improving the quality and reliability of supply of power
through a financially sustainable and operationally efficient distribution sector.
The release of funds under the scheme is linked to performance of the States/
distribution utilities against financial and operational parameters.
ii. Additional borrowing space of 0.5% of Gross State Domestic Product (GSDP) has
been made available to State Governments, which is conditional upon them
undertaking specific reforms in the power sector including financial performance
of the distribution utilities.
………2.- 2 -
iii. Additional Prudential Norms have been laid down for sanctioning of loans to
State-owned power utilities based on performance of power distribution utilities
against prescribed conditions.
iv. Rules for implementation of Fuel and Power Purchase Costs Adjustment (FPPCA)
and cost-reflective tariff have been framed so as to ensure that all prudent costs
for supply of electricity are passed through.
v. Rules and Standard Operating Procedure have been issued for proper subsidy
accounting and their timely payment.
vi. To improve payment discipline in the power sector value chain, Electricity (Late
Payment Surcharge and Related Matters) Rules, 2022 were promulgated, 2022
which entail obligations upon the DISCOMs to clear their legacy dues as existing
on 03.06.2022 in a phased manner and time bound clearance of current dues.
(ii) With concerted efforts of Central and State Governments, the Aggregate Technical
and Commercial (AT&C) losses at national level have reduced from 21.91% in FY21 to
15.04% in FY25 while the national Average Cost of Supply - Average Revenue Realized
(ACS-ARR) gap has narrowed from Rs. 0.69/kWh to Rs. 0.06/kWh. These collective efforts
have also resulted in DISCOMs achieving a profit after tax (PAT) of Rs 2,701 crore for the
first time.
(iii) Financial liabilities of State owned distribution utilities are the contingent liabilities
of the respective State Government and need to be recognized as such. In order to ensure
long-term financial stability for DISCOMs while safeguarding consumer interests, various
measures have been envisaged in the draft National Electricity Policy (NEP) 2026, and
Electricity (Amendment) Bill 2025 such as making it mandatory for Electricity Regulatory
Commissions (ERCs) to determine cost-reflective tariffs, linking tariffs to a suitable index
for automatic annual revision which operates if no tariff order is passed by the State
Commission, strengthening of dispute resolution mechanism to reduce burden on ERCs
and enable faster dispute resolution, flexibility to State Governments to continue to
support specific consumer categories by providing advance subsidies on their behalf
ensuring that no consumer group is unduly burdened etc.
***************ANNEXURE
ANNEXURE REFERRED IN REPLY TO PART (a) OF UNSTARRED QUESTION NO.
2109 ANSWERED IN THE LOK SABHA ON 12.02.2026
*************
DISCOM wise financial and operational parameters as on 31.03.2025
ACS-ARR
Accumulated Total
Gap
State/ DISCOM AT&C Loss (%) Surplus/ Borrowings
(Rs./kWh)
(Loss) (RsCr) (Rs Cr)
State Sector 15.40 0.11 (6,77,561) 7,11,402
Andaman & Nicobar Islands 24.14 2.22 - -
Andaman & Nicobar PD 24.14 2.22 - -
Andhra Pradesh 7.87 (0.15) (29,420) 77,583
APCPDCL 7.95 (0.62) (9,688) 21,204
APEPDCL 7.70 (0.02) (7,155) 20,693
APSPDCL 7.99 (0.01) (12,577) 35,687
Arunachal Pradesh 46.20 0.00 - -
Arunachal PD 46.20 0.00 - -
Assam 15.44 (0.26) (1,028) 1,131
APDCL 15.44 (0.26) (1,028) 1,131
Bihar 15.51 (0.41) (16,526) 14,002
NBPDCL 14.49 (0.57) (4,917) 6,509
SBPDCL 16.35 (0.28) (11,608) 7,494
Chhattisgarh 14.25 (0.19) (10,423) 5,428
CSPDCL 14.25 (0.19) (10,423) 5,428
Delhi 8.36 (0.86) - -
NDMC 8.36 (0.86) - -
Goa 10.39 0.20 - -
Goa PD 10.39 0.20 - -
Gujarat 8.25 (0.40) 7,355 258
DGVCL 4.26 (0.46) 2,507 26
MGVCL 8.37 (0.24) 877 9
PGVCL 12.73 (0.44) 2,276 208
UGVCL 6.16 (0.33) 1,695 15
Haryana 11.76 0.10 (27,915) 20,311
DHBVNL 12.20 0.03 (13,052) 12,099
UHBVNL 11.12 0.20 (14,862) 8,213
Himachal Pradesh 19.44 0.23 (3,391) 7,024
HPSEBL 19.44 0.23 (3,391) 7,024
Jharkhand 28.19 0.95 (20,512) 22,381
JBVNL 28.19 0.95 (20,512) 22,381
Karnataka 11.92 0.69 (34,980) 47,993
BESCOM 12.50 1.21 (13,819) 22,611CHESCOM 8.76 0.36 (4,064) 5,410
GESCOM 13.48 0.10 (5,661) 6,147
HESCOM 12.14 0.23 (11,398) 12,251
MESCOM 10.02 (0.00) (37) 1,575
Kerala 6.61 (0.17) (38,648) 17,638
KSEBL 6.61 (0.17) (38,648) 17,638
TCED 6.94 (0.13) - -
Ladakh 26.82 (0.89) - -
Ladakh PD 26.82 (0.89) - -
Madhya Pradesh 22.76 (0.04) (71,394) 49,239
MPMaKVVCL 29.60 0.22 (30,900) 18,176
MPPaKVVCL 12.78 (0.36) (12,503) 14,184
MPPoKVVCL 26.66 0.02 (27,992) 16,878
Maharashtra 17.69 0.56 (35,671) 90,659
BEST 5.07 0.60 - -
MSEDCL 18.09 (0.70) (35,671) 90,659
Manipur 12.90 (0.20) (290) 745
MSPDCL 12.90 (0.20) (290) 745
Meghalaya 17.52 0.13 (4,962) 1,474
MePDCL 17.52 0.13 (4,962) 1,474
Mizoram 32.31 (0.34) - -
Mizoram PD 32.31 (0.34) - -
Nagaland 48.86 (0.50) - -
Nagaland PD 48.86 (0.50) - -
Puducherry 14.72 (0.64) - -
Puducherry PD 14.72 (0.64) - -
Punjab 19.21 (0.30) (3,404) 17,411
PSPCL 19.21 (0.30) (3,404) 17,411
Rajasthan 15.18 (0.04) (90,303) 98,488
AVVNL 9.22 (0.45) (25,563) 26,126
JdVVNL 21.42 0.02 (34,689) 36,793
JVVNL 13.75 0.18 (30,052) 35,569
Sikkim 21.84 0.33 - -
Sikkim PD 21.84 0.33 - -
Tamil Nadu 10.96 (0.19) (1,19,153) 1,01,782
TNPDCL 10.96 (0.19) (1,19,153) 1,01,782
Telangana 19.84 0.27 (69,741) 59,230
TSNPDCL 23.22 0.53 (21,399) 21,885
TSSPDCL 18.51 0.17 (48,342) 37,345
Tripura 29.61 1.40 (991) 842
TSECL 29.61 1.40 (991) 842
Uttar Pradesh 19.54 0.73 (1,00,858) 61,395DVVNL 19.70 1.03 (33,974) 16,412
KESCO 14.29 1.09 (5,232) 2,243
MVVNL 17.70 1.11 (25,236) 14,338
PaVVNL 11.91 (0.29) (8,782) 6,562
PuVVNL 30.70 1.30 (27,634) 21,840
Uttarakhand 15.08 0.06 (5,482) 1,729
UPCL 15.08 0.06 (5,482) 1,729
West Bengal 17.17 (0.03) 174 14,658
WBSEDCL 17.17 (0.03) 174 14,658
Private Sector 10.05 (0.64) 30,351 14,975
Delhi 6.48 (1.13) 22,184 2,914
BRPL 6.70 (0.89) 12,892 894
BYPL 7.15 (0.95) 5,650 701
TPDDL 5.70 (1.58) 3,642 1,319
Gujarat 3.63 (0.42) 3,892 3,562
Torrent Power Ahmedabad 3.80 (0.30) 3,206 3,354
Torrent Power Surat 3.24 (0.67) 686 208
Maharashtra 4.99 (2.04) 1,245 3,818
AEML 4.99 (2.04) 1,245 3,818
Odisha 17.81 0.18 1,263 4,531
TPNODL 12.51 (0.06) 480 1,006
TPSODL 23.36 0.82 219 1,498
TPWODL 17.64 0.36 301 1,093
TPCODL 19.11 (0.09) 262 933
Uttar Pradesh 8.48 (0.15) 1,561 0
NPCL 8.48 (0.15) 1,561 0
West Bengal 4.68 0.19 205 151
IPCL 4.68 0.19 205 151
Grand Total 15.04 0.06 (6,47,210) 7,26,378
**********