The Impressive TimesNew Delhi : The Government of India has outlined a series of transformative measures aimed at reducing Aggregate Technical and Commercial (AT&C) losses of power distribution utilities, resulting in a substantial national-level reduction from 21.91% in FY21 to 16.16% in FY25.
According to information shared by Minister of State for Power, Shri Shripad Yesso Naik, the Centre has been extending financial, operational, and policy support to help state distribution companies (DISCOMs) improve efficiency and ensure reliable power supply.
A cornerstone of the government’s efforts, the Revamped Distribution Sector Scheme (RDSS) aims to strengthen distribution infrastructure and promote financial sustainability.
Under RDSS, projects worth ₹2.83 lakh crore have been sanctioned, including ₹1.53 lakh crore for infrastructure upgrades such as:
Replacement of old and damaged conductors
Installation of Low Tension Aerial Bunched (LT AB) cables
Upgradation and augmentation of distribution transformers and substations
Segregation of agricultural feeders
The scheme also emphasizes prepaid smart metering, a major intervention designed to curb losses by improving billing efficiency and consumer accountability. Fund release under RDSS is strictly linked to performance metrics such as AT&C loss levels and the ACS-ARR gap.
To ensure greater accountability and efficiency in the sector, the government has introduced several complementary measures:
Additional Borrowing Limit: States can access up to 0.5% of GSDP as additional borrowing, provided they implement specific power sector reforms.
Enhanced Prudential Norms: Loan approvals for state-owned power utilities are now tied to DISCOM performance against prescribed standards.
Tariff Rationalisation: Rules for Fuel and Power Purchase Cost Adjustment (FPPCA) and cost-reflective tariff structures ensure that prudent electricity supply costs are recovered.
Subsidy Accounting: A detailed SOP and guidelines ensure transparent and timely payment of subsidies by state governments.
These reforms, implemented collaboratively by the Centre and states, have led to a measurable improvement in the power distribution landscape. The reduction in AT&C losses to 16.16% in FY25 marks a significant step toward the national target of 12–15%, while efforts to eliminate the ACS-ARR gap continue.
The government affirms that ongoing and upcoming initiatives under RDSS and other reform frameworks will further strengthen India’s distribution sector, ultimately delivering more reliable and affordable power to consumers.
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