DISCOMs post ₹2,700cr profit after 10 years of losses
What's the story
India's power distribution utilities (DISCOMs) have reported a net profit of ₹2,701 crore in the fiscal year 2025 (FY25), marking a major turnaround from a loss of ₹25,553 crore in FY24. The turnaround is even more remarkable when we look at the last decade. In FY14, DISCOMs had posted a massive loss of ₹67,962 crore.
Minister's remarks
Power Minister hails discoms' financial turnaround
Union Power Minister Manohar Lal Khattar hailed the financial turnaround as a new chapter for the distribution sector. He attributed this change to reforms aimed at addressing long-standing concerns in the sector. "The government is committed to necessary reforms in the sector so that the power sector can support India's growing economy and play its part in the journey toward Viksit Bharat," he said.
Performance indicators
AT&C losses and ACS-ARR gap show improvement
The reforms have also led to an improvement in key performance indicators. The Aggregate Technical & Commercial (AT&C) losses, which represent the gap between energy bought and energy billed/collected, have come down from 22.62% in FY14 to 15.04% in FY25. Meanwhile, the Average Cost of Supply-Average Revenue Realized (ACS-ARR) gap has narrowed from ₹0.78/kWh in FY14 to ₹0.06/kWh in FY25, indicating better cost recovery practices among DISCOMs over time.
Payment reforms
Late payment surcharge rules and payment cycles
The Electricity (Late Payment Surcharge) Rules have helped cut outstanding dues to generating firms by 96% from ₹1,39,947 crore in 2022 to ₹4,927 crore by January 2026. The rules also brought down the DISCOM payment cycles from 178 days in FY21 to 113 days in FY25. These steps were introduced to ensure timely payments by DISCOMs and promote financial discipline within the sector.