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GOVERNMENT OF INDIA
MINISTRY OF POWER
RAJYA SABHA
UNSTARRED QUESTION NO.4150
ANSWERED ON 30.03.2026
POWER DISTRIBUTION REFORMS AND FINANCIAL SUSTAINABILITY OF
DISCOMS
4150 SHRI NARAYANA KORAGAPPA:
Will the Minister of POWER be pleased to state:
(a) whether Government has undertaken any review of the performance of power distribution
companies (DISCOMs) under the Revamped Distribution Sector Scheme (RDSS) with regard to
operational efficiency reducing Aggregate Technical and Commercial (AT&C) losses;
(b) if so, the details thereof including the progress made in reducing AT&C losses and
improving billing and collection efficiency across States;
(c) whether Government has taken steps to accelerate the installation of smart meters and
modernise distribution infrastructure in order to strengthen financial sustainability of DISCOMs
and improve quality of power supply; and
(d) if so, the details thereof?
A N S W E R
THE MINISTER OF STATE IN THE MINISTRY OF POWER
(SHRI SHRIPAD NAIK)
(a) to (d): Revamped Distribution Sector Scheme (RDSS) has been launched by the Government
of India (GoI) in the year 2021 with the objective of improving the operational efficiency and
financial viability of the Distribution Utilities. Under the scheme, distribution infrastructure works,
including smart metering works, worth Rs. 2.83 lakh crore have been sanctioned. The scheme aims
to reduce Aggregate Technical and Commercial (AT&C) losses to pan-India levels of 12–15% and
eliminate the gap between Average Cost of Supply (ACS) and Average Revenue Realised (ARR).
Under the scheme, projects worth Rs. 1.53 lakh crore for loss reduction infrastructure and
Rs. 1.31 lakh crore for smart metering have been sanctioned based on the proposals submitted by
the States. The Loss reduction works include replacement of old conductors, augmentation of
substations and Distribution Transformers (DTs), creation of new substations, installation of new
DTs, feeder segregation and implementation of SCADA/DMS systems for real-time monitoring.
The works have been undertaken under RDSS to reduce losses and improve quality of power
supply.
Further, installation of smart meters is a key intervention under the scheme which helps
improve the financial discipline of the DISCOMs through enhanced revenue collection and better
energy accounting of the distribution system. Smart metering works for 19.79 crore consumers,
2.11 lakh feeders and 52.53 lakh Distribution Transformers (DTs), totaling 20.33 crore smart
meters, have been sanctioned based on the proposal submitted by the States/ distribution utilities
and 4.69 crore smart meters have been installed. Smart meters have also been installed under other
schemes including States’ own schemes. A total of 6.13 crore smart meters have been installed
across the country under various schemes.To accelerate installation of smart meters, the Ministry has issued various advisories and
Standard Operating Procedures (SOPs) to build consumer confidence, which include:
(i) Prioritizing installation of prepaid smart meters for Government establishments,
commercial, industrial and high-load consumers and subsequently for other consumers
based on demonstration of benefits.
(ii) Incentivizing consumers for prepaid meter installation through rebates in bill;
(iii) No penalty on consumer based on maximum demand recorded by smart meter;
(iv) Mechanism for recovery of past arrears in easy installments;
(v) Installation of check meters for enhancing confidence in accuracy of smart meters.
The performance of distribution utilities under the scheme, is regularly reviewed through
institutional mechanisms. Monitoring and review of works sanctioned under RDSS, including smart
metering works, is being done by the Nodal Agencies namely PFC Ltd and REC Ltd on a regular
basis. Further, an institutional mechanism at the State level i.e., Distribution Reforms Committee
headed by Chief Secretary of the State concerned, and at the Central level i.e., Inter-Ministerial
Monitoring Committee headed by Secretary (Power), has been put in place under the RDSS
guidelines to review and monitor the implementation of the works sanctioned under the Scheme.
Further, the release of funds under the scheme is contingent on improvement in various
operational and financial parameters which, in addition to other initiatives taken by GoI and States,
has helped to improve efficiency in DISCOMs. These include timely payment of Government
subsidies and Govt. department dues to the utilities, regular issuance of tariff order, publishing of
accounts, non-creation of regulatory assets, etc.
As a result of the various reform measures undertaken under RDSS and other initiatives, the
AT&C losses of distribution utilities at the national level have reduced from 21.91% in FY21 to
15.04% in FY25. Further, the Billing Efficiency at national level has improved from 84.08% in
FY21 to 87.59 % in FY25 and the collection efficiency has improved from 92.9% in FY21 to 97 %
in FY25.
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