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After years of mounting losses, India’s power DISCOMs have quietly turned profitable posting Rs 2,701 crore in FY25. What changed, and how government reforms reshaped one of the country’s most troubled sectors, is now drawing attention.
India’s power DISCOMs post Rs 2,701 crore profit in FY25
New Delhi: India’s power distribution sector has recorded its first collective profit in more than a decade, marking a major turnaround for a segment long plagued by financial stress. Power distribution utilities (DISCOMs and power departments) posted a consolidated Profit After Tax (PAT) of Rs 2,701 crore in FY 2024-25, according to official data.
Union Minister of Power Manohar Lal termed the achievement a “new chapter” for the distribution sector, attributing the turnaround to sustained structural reforms and policy interventions by the Centre.
The latest figures represent a dramatic improvement compared to a loss of Rs 25,553 crore in FY 2023–24 and a much deeper loss of Rs 67,962 crore in FY 2013-14. Distribution utilities have consistently reported losses since the unbundling and corporatisation of State Electricity Boards, making the FY25 profit a historic milestone.
The improved financial performance underscores a gradual but steady correction in operational inefficiencies and revenue leakages that have burdened the sector for years.
Officials credit the revival to a series of targeted reforms, including the Revamped Distribution Sector Scheme (RDSS), amendments to Electricity Rules, the Late Payment Surcharge Rules, and the Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025. These measures focused on improving billing efficiency, enforcing financial discipline, and enhancing transparency in utility accounts.
According to the Power Ministry, the impact of these reforms is visible not only in profitability but also across key performance metrics.
Aggregate Technical and Commercial (AT&C) losses an indicator of power theft and inefficiencies have declined significantly, falling from 22.62% in FY 2013-14 to 15.04% in FY 2024-25. This reduction reflects better metering, improved billing systems, and stronger enforcement mechanisms.
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In parallel, the gap between Average Cost of Supply and Average Revenue Realised (ACS-ARR) has narrowed sharply from Rs 0.78 per unit in FY 2013-14 to just Rs 0.06 per unit in FY 2024-25, signalling near-cost recovery for distribution utilities.
Reforms such as the Electricity (Late Payment Surcharge) Rules have also led to a steep reduction in outstanding dues to power generating companies. Pending payments have dropped by 96%, from Rs 1.39 lakh crore in 2022 to Rs 4,927 crore by January 2026. Payment cycles have improved as well, declining from 178 days in FY 2020-21 to 113 days in FY 2024-25.
Experts say the turnaround strengthens the financial backbone of India’s power sector and creates a more sustainable foundation for future capacity expansion and grid modernisation.
