**Executive Summary**
This document highlights the significant turnaround in the financial performance of India's power distribution utilities (DISCOMs), which collectively recorded a positive Profit After Tax (PAT) of ₹2,701 crore in FY 2024-25, a sharp contrast to previous years of losses. This improvement is attributed to several transformative initiatives in the distribution sector and concerted efforts by the Ministry of Power. The Electricity Distribution (Accounts and Additional Disclosure) Rules come into effect in 2025.
**Key Points / Main Content**
* **Financial Performance:**
* DISCOMs recorded a positive PAT of ₹2,701 crore in FY 2024-25.
* This compares to a loss of ₹25,553 crore in FY 2023-24 and ₹67,962 crore in FY 2013-14.
* **Initiatives in the Distribution Sector:**
* **Revamped Distribution Sector Scheme (RDSS):** Focuses on enhancing financial viability through infrastructure modernization and accelerated smart metering.
* **Additional Prudential Norms:** Links access to finance for Power sector Utilities to achievement against performance benchmarks to promote fiscal and operational discipline.
* **Amendments to Electricity Rules:** Enforces timely cost adjustments, prudent tariff structures, and transparent subsidy accounting to ensure full cost recovery.
* **Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025:** Introduces uniform accounting and enhanced transparency across Distribution utilities for improved financial governance.
* **Late Payment Surcharge Rules:** Enforces legal contracts through timely payments in the power sector thereby supporting investment in new RE projects.
* **Additional Borrowing Scheme:** Incentivizing states to implement critical power sector reforms, with borrowing limits tied to performance metrics.
* **Improved Indicators:**
* Aggregate Technical & Commercial (AT&C) losses have reduced from 22.62% in FY 2013-14 to 15.04% in FY 2024-25.
* The Average Cost of Supply-Average Revenue Realized (ACS–ARR) gap has narrowed from ₹0.78/kWh in FY 2013-14 to ₹0.06/kWh in FY 2024-25.
* Reforms reduced outstanding dues to generating companies from ₹1,39,947 crore in 2022 to ₹4,927 crore by January 2026.
* Distribution utility payment cycles reduced from 178 days in FY 2020-21 to 113 days in FY 2024-25.
**Impact Analysis**
**DISCOMs and Power Departments**
* **Impact:** Improved financial health, increased operational efficiency, and enhanced access to finance.
* **Action Required:** Implement the various initiatives and reforms to sustain the positive momentum and further improve performance.
**State Governments and UTs**
* **Impact:** Enhanced power sector performance within their jurisdiction.
* **Action Required:** Engage with the Ministry of Power, implement reforms, and participate in discussions to improve the distribution sector.
**Generating Companies**
* **Impact:** Reduced outstanding dues and improved payment cycles.
* **Action Required:** Ensure timely receipt of payments.
**Ministry of Power**
* **Impact:** Increased efficiency of the power sector.
* **Action Required:** Continue to monitor progress, engage with stakeholders, and drive further reforms.
Key Entities Referenced
Revamped Distribution Sector Scheme (RDSS): A scheme focused on enhancing financial viability of power distribution utilities through infrastructure modernization and accelerated smart metering.
Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025: Rules aimed at introducing uniform accounting and enhanced transparency across Distribution utilities for improved financial governance.
Late Payment Surcharge Rules: Rules enforcing legal contracts through timely payments in the power sector.
Ministry of Power: The central ministry responsible for the development of the power sector.
Ministry of Power
POWER DISTRIBUTION UTILITIES RECORD
POSITIVE PAT AFTER YEARS OF LOSSES; THIS
MARKS A NEW CHAPTER, SAYS POWER
MINISTER
Several Initiatives in the Distribution Sector Improve Key
Performance Indicators
प्रव तथ: 18 JAN 2026 10:34AM by PIB Delhi
The country's power distribution utilities (DISCOMs and power departments) have collectively recorded a
positive Profit After Tax (PAT) of ₹2,701 crore in year FY 2024-25 marking a significant turning point for
the sector. The distribution utilities as a whole have been reporting PAT losses for past several years since
unbundling and corporatization of State Electricity Boards.
The positive PAT of ₹2,701 crore returned in FY 2024-25 compares to a loss of ₹25,553 crore in year FY
2023-24 and a loss of ₹67,962 crore in FY 2013-14.
While commenting on this, Shri Manohar Lal, Union Minister of Power said that this marks a new chapter
for the distribution sector and is a result of several steps that have been taken to redress the concerns of the
distribution sector.
The Minister said this achievement was possible due to the leadership and vision of the Prime Minister
Shri Narendra Modi captured in his words that, “India is driving not only its growth but also the growth of
the world, with the energy sector playing a significant role in this”. Shri Manohar Lal said the government
is committed to the required reforms in the sector so that the power sector can support our growing
economy and play its part in the journey towards Viksit Bharat.
INITIATIVES IN THE DISTRIBUTION SECTOR
Some of the transformative initiatives in the distribution sector include:
Revamped Distribution Sector Scheme (RDSS): Enhancing financial viability through infrastructure
modernization and accelerated smart metering.
Additional Prudential Norms: Linking access to finance for Power sector Utilities to achievement
against performance benchmarks to promote fiscal and operational discipline.
Amendments to Electricity Rules: Enforcing timely cost adjustments, prudent tariff structures, and
transparent subsidy accounting to ensure full cost recovery.
Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025: Introducing uniform
accounting and enhanced transparency across Distribution utilities for improved financial
governance.
Late Payment Surcharge Rules: Enforcing legal contracts through timely payments in the power
sector thereby supporting investment in new RE projects.Incentivizing states to implement critical power sector reforms, with borrowing limits tied to
performance metrics as part of Additional Borrowing Scheme.
IMPROVED INDICATORS
The result of these reforms is evident not just in the positive PAT posted by the Distribution Utilities after
so many years, but also in other performance indicators.
The Aggregate Technical & Commercial (AT&C) losses have reduced over the years, signalling a
transformation. The AT&C losses have reduced from 22.62% in FY 2013-14 to 15.04% in FY 2024-
25.
Further, signalling much improved cost recovery, the Average Cost of Supply–Average Revenue
Realized (ACS–ARR) gap has narrowed from ₹0.78/kWh in FY 2013-14 to ₹0.06/kWh in FY 2024-
25.
Reforms such as the Electricity (Late Payment Surcharge) Rules have led to a 96% reduction in
outstanding dues to generating companies—from ₹1,39,947 crore in 2022 to just ₹4,927 crore by
January 2026—while bringing down Distribution utility payment cycles from 178 days in FY 2020-
21 to 113 days in FY 2024-25.
The Ministry of Power has put in concerted efforts over the past decade to improve the performance of
distribution utilities across the country. In addition to the different policy initiatives, extensive
engagements with States and UTs have emphasized reforms in the distribution sector. These include
discussions led by Shri Manohar Lal, Union Power Minister during the Regional Conferences of Energy
Ministers of States/UTs in 2025 - Gangtok (Northeastern Region), Mumbai (Western Region), Bengaluru
(Southern Region), Chandigarh (Northern Region) and Patna (Eastern Region). Regular interactions and
review have played an important role in DISCOMs accomplishing this remarkable turnaround.
This momentum is expected to be sustained as a result of the deliberations underway in the Group of
Ministers constituted by Shri Manohar Lal under the chairmanship of Union Minister of State for Power
and New & Renewable Energy, Shri Shripad Naik on the matter of improving Financial viability of the
DISCOMs.
***
NR
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