DISCOMs Turn Profitable After Years of Losses

• DISCOMs record first collective profit in years with ₹2,701 crore PAT in FY 2024-25
• Losses shrink sharply from ₹25,553 crore in FY 2023-24
• AT&C losses fall to 15.04% and payment cycles improve considerably
• Centre credits reform push, smart metering and fiscal discipline for turnaround

GG News Bureau
New Delhi, 18th Jan: The country’s power distribution utilities (DISCOMs and state power departments) have collectively recorded a positive Profit After Tax (PAT) of ₹2,701 crore in FY 2024-25, marking a historic turnaround for a sector that has struggled with persistent financial stress since the unbundling and corporatization of State Electricity Boards. This marks the first collective profit after years of accumulated losses.

The improvement is particularly striking when compared with past figures—DISCOMs had reported a loss of ₹25,553 crore in FY 2023-24 and a massive deficit of ₹67,962 crore in FY 2013-14, reflecting how deeply entrenched the financial crisis once was in the distribution segment.

Commenting on the achievement, Union Power Minister Shri Manohar Lal said the recovery represents “a new chapter” for the power distribution sector and is the outcome of sustained policy reforms, stronger financial governance, and better operational discipline. He emphasized that the revival was not accidental but the result of deliberate and consistent government intervention over the past decade.

The minister further linked the progress to Prime Minister Narendra Modi’s vision that India is not just growing for itself but also contributing to global growth, with the energy sector playing a central role in this trajectory. He reiterated that the government remains committed to deeper reforms to ensure the power sector supports economic expansion and India’s journey toward Viksit Bharat.

A range of initiatives have contributed to this turnaround, including the Revamped Distribution Sector Scheme (RDSS), which has focused on infrastructure modernization and accelerated deployment of smart meters. Additional prudential norms have tied access to finance with performance benchmarks, while amendments to electricity rules have ensured timely tariff adjustments and transparent subsidy accounting.

The newly notified Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025 have introduced uniform accounting practices, strengthening financial transparency across utilities. Meanwhile, the Electricity (Late Payment Surcharge) Rules have improved payment discipline and reduced arrears to generating companies, boosting investor confidence in the sector.

The impact of these reforms is visible in key performance indicators. Aggregate Technical and Commercial (AT&C) losses have declined from 22.62% in FY 2013-14 to 15.04% in FY 2024-25, reflecting better billing and collection efficiency. The Average Cost of Supply–Average Revenue Realized (ACS–ARR) gap has narrowed from ₹0.78 per kWh to just ₹0.06 per kWh, signaling much-improved cost recovery.

Outstanding dues to generating companies have dropped by 96%, from ₹1,39,947 crore in 2022 to ₹4,927 crore by January 2026. At the same time, DISCOM payment cycles have improved from 178 days in FY 2020-21 to 113 days in FY 2024-25, reducing financial strain across the power value chain.

The Ministry of Power has also conducted extensive consultations with states and Union Territories through regional energy conferences in Gangtok, Mumbai, Bengaluru, Chandigarh, and Patna during 2025. These engagements, led by Shri Manohar Lal, played a crucial role in aligning states with reform priorities.

Going forward, the government expects this momentum to continue as deliberations progress within a Group of Ministers chaired by Union Minister of State for Power and New & Renewable Energy Shri Shripad Naik to further strengthen the financial viability of DISCOMs.