India’s electricity distribution companies (DISCOMs) have recorded a net profit of ₹2,701 crore in FY25, marking a significant turnaround after years of heavy losses. In FY24, these utilities had reported a combined loss of ₹25,553 crore, and the sector had faced even larger deficits in previous years.
Union Power Minister Manohar Lal welcomed the results, calling them a “new chapter” for the sector. He highlighted that a financially healthy power distribution system is essential for India’s economic growth and development goals.
The turnaround is mainly attributed to several policy and operational reforms. Programs like the Revamped Distribution Sector Scheme (RDSS) helped modernize infrastructure, install smart meters, and improve efficiency. New rules for electricity tariffs and subsidies also made cost recovery more transparent and reliable.
Efficiency has improved significantly. Technical and commercial losses, energy lost or not billed, have dropped from 22.6% in 2013–14 to 15% in FY25. The gap between the cost of supply and revenue earned narrowed to just ₹0.06 per unit, compared with ₹0.78 per unit a decade ago.
Financial management has also strengthened. Outstanding dues to power generators fell dramatically by 96%, from ₹1.39 lakh crore in 2022 to ₹4,927 crore in January 2026. The average payment cycle for utilities shortened from 178 days in FY21 to 113 days in FY25, ensuring smoother cash flow and timely payments.
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