Lok Sabha Question No. 1926 (UNSTARRED), answered on 2025-12-11
Subject: Challenges in Power Sector
Ministry: POWER
Asked by: Shri Biplab Kumar Deb, Prof. Sougata Ray

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO. 1926 ANSWERED ON 11.12.2025

## CHALLENGES IN POWER SECTOR

1926.  PROF. SOUGATA RAY: SHRI BIPLAB KUMAR DEB:

Will the Minister of POWER be pleased to state:

- (a) whether the Indian power sector faces significant challenges including high transmission  and  distribution  losses,  inadequate  cost  recovery,  operational inefficiencies and financial instability of Power Distribution Companies (DISCOMs) and if so, the details thereof;
- (b) whether many DISCOMs, especially State-owned ones, are burdened with high debt and accumulated losses impacting their ability to invest in infrastructure and improve service quality, if so, the details thereof, State-wise;
- (c) whether high aggregate technical and commercial losses including power theft  and  inefficient  billing  and  collection  systems  further  exacerbate  their financial strain, if so, the details thereof;
- (d) whether lack of investment in upgrading infrastructure including smart grids and advanced metering systems hinders modernization efforts and if so, the details thereof; and
- (e) whether the Government has taken steps to address these issues through policy reforms and financial support mechanisms, if so, the details thereof?

## A N S W E R

THE MINISTER OF STATE IN THE MINISTRY OF POWER

(SHRI SHRIPAD NAIK)

(a) to (e): The losses in State owned distribution utilities (operational and financial) are a result of various parameters, some of which are highlighted below:

-  Non cost reflective tariff due to regulatory disallowance of expenses and delays in tariff revisions;
-  Gap between  Average  Cost  of  Supply  (ACS)  and  Average  Revenue  Realised (ARR);
-  Delayed payment of tariff subsidy and Government Departments dues; and
-  Reliance on short-term and non-capex borrowing to manage cash gaps.

As  a  result,  the  distribution  utilities  have  high  accumulated  losses  and outstanding debt (Details at Annexure) which impacts their ability to investment in infrastructure works. Electricity  being  a  concurrent  subject,  the  supply  and  distribution  of electricity to the all consumers, including improvement in electricity supply and grid strengthening in rural and urban areas, is the responsibility of respective State Government/ power distribution utility. Government of India (GoI) supplements the efforts of the States/ distribution utilities for improving the financial viability of the distribution sector.

GoI  has  facilitated  the  creation  of  distribution  infrastructure  through allocation  of  funds  under  various  schemes  such  as  (a)  DDUGJY,  where  central assistance was provided to ensure electrification of all villages and strengthening of distribution infrastructure in rural areas; (b) IPDS, where the strengthening of distribution  network  in  urban  areas  was  taken  up  as  a  key  measure  in  power distribution and (c) SAUBHAGYA for electrification of households. Under the above three  schemes,  works  amounting  to  Rs.  1.85  lakh  crore  were  executed  for strengthening  the  distribution  system  of  the  country.  Further,  under  ongoing Revamped Distribution Sector Scheme (RDSS), projects worth Rs. 2.83 lakh crore for  distribution  infrastructure  works  including  smart  metering  works  have  been sanctioned. The scheme emphasizes technological interventions, including smart metering, SCADA (Supervisory Control and Data Acquisition), Distribution Management System, etc.

Some of the key initiatives taken for improving the viability of the distribution utilities, are as under:

-  Funds  release  under  the  RDSS  is  linked  to  performance  of  distribution utilities against key financial parameters.
-  Performance linked additional borrowing space of 0.5% of GSDP allowed to State Governments.
-  Additional  Prudential  Norms  mandated  for  sanctioning  of  loans  to  State owned power utilities.
-  Rules have been put in place for implementation of Fuel and Power Purchase Costs Adjustment (FPPCA) and cost reflective tariff so as to ensure that all prudent expenses for supply of electricity are passed through.
-  Rules and Standard Operating Procedure issued for proper subsidy accounting and release.

The States/ distribution utilities are implementing the reforms and with the concerted efforts of Central and State Governments/ distribution utilities, AT&C losses at national level have reduced from 21.9% in FY21 to 16.16% in FY25 and ACS-ARR gap has reduced from Rs 0.69/kWh in FY21 to Rs. 0.11/kWh in FY25. While the reform measures have shown some positive results in reducing overall AT&C losses and narrowing the revenue gap, consistent and robust implementation by States is required to ensure sustained financial viability and operational efficiency of distribution utilities.

***********

## ANNEXURE

## ANNEXURE REFERRED IN REPLY TO PARTS (a) TO (e) OF UNSTARRED QUESTION NO. 1926 ANSWERED IN THE LOK SABHA ON 11.12.2025

*************

State wise Accumulated (Loss)/ Surplus in Rs. Cr.

(Amount in Rs. Cr.)

| States/ UTs        | 2019-20   | 2020-21   | 2021-22   | 2022-23   | 2023-24   | 2024- 25(P)   |
|--------------------|-----------|-----------|-----------|-----------|-----------|---------------|
| Andhra             | (29,143)  | (28,707)  | (31,195)  | (29,218)  | (29,210)  | (19,722)      |
| Pradesh Assam      | (959)     | (1,229)   | (893)     | (1,699)   | (1,324)   | (1,028)       |
| Bihar              | (14,673)  | (17,160)  | (19,537)  | (19,777)  | (18,503)  | (16,526)      |
| Chhattisgar        | (7,290)   | (7,710)   | (8,924)   | (10,057)  | (10,016)  | (10,423)      |
| Gujarat            | 79        | 436       | 798       | 935       | 5,165     | 7,355         |
| Haryana            | (28,978)  | (28,341)  | (28,404)  | (28,165)  | (28,001)  | (27,915)      |
| Himachal           | (1,521)   | (1,706)   | (1,810)   | (3,126)   | (3,754)   | (3,391)       |
| Pradesh Jharkhand  | (6,261)   | (9,183)   | (11,556)  | (15,848)  | (18,469)  | (20,512)      |
| Karnataka          | (5,645)   | (9,821)   | (14,413)  | (17,559)  | (26,109)  | (34,996)      |
| Kerala             | (12,104)  | (18,970)  | (33,722)  | (34,668)  | (35,978)  | (38,647)      |
| Madhya             | (52,981)  | (56,880)  | (61,010)  | (65,291)  | (69,301)  | (71,394)      |
| Pradesh Maharashtr | (23,428)  | (26,251)  | (26,070)  | (31,275)  | (36,226)  | (35,671)      |
| a Manipur          | (131)     | (146)     | (157)     | (286)     | (295)     | (290)         |
| Meghalaya          | (2,413)   | (2,475)   | (2,636)   | (4,259)   | (4,634)   | (4,962)       |
| Punjab             | (8,159)   | (6,713)   | (5,644)   | (10,420)  | (9,620)   | (3,404)       |
| Rajasthan          | (86,868)  | (89,084)  | (89,556)  | (92,070)  | (91,565)  | (90,303)      |
| Tamil Nadu         | (99,860)  | (1,38,643 | (1,51,639 | (1,62,507 | (1,66,944 | (1,67,520)    |
| Telangana          | (42,293)  | (48,982)  | (49,816)  | (60,922)  | (67,276)  | (69,741)      |
| Tripura            | (391)     | (382)     | (514)     | (854)     | (1,171)   |               |
| Uttar              | (85,069)  | (70,661)  | (78,004)  | (82,556)  | (89,662)  | (1,00,858)    |
| Pradesh Uttarakhan | (3,699)   | (3,851)   | (3,872)   | (5,096)   | (5,435)   | (3,458)       |
| d West             | 3         | 34        | 83        | 119       | 158       | 174           |
| Private            | 6,424     | 21,008    | 24,963    | 28,871    | 15,900    | 25,214        |
| Sector Grand Total | (5,05,361 | (5,45,418 | (5,93,528 | (6,45,728 | (6,92,269 | (6,88,016)    |

)

)

)

)

)

Source: PFC Report on Performance of State Power Utilities 2024-25 (Prov.)

*:  data  also  includes  last  year  figures    for  TANGEDCo  (Tamil  Nadu)  which  was recently unbundled into 3 companies one of which is TNPDCL (distribution company of Tamil Nadu). Considering, Accumulated Losses of only TNPDCL i.e. Rs (1,19,153) Cr, total accumulated losses at National level would be: Rs (6,39,649) Cr.

## State wise Accumulated Outstanding Debt in Rs. Cr.

## (Amount in Rs. Cr.)

| States/ UTs         | 2019-20   | 2020-21   | 2021-22   | 2022-23   | 2023-24   | 2024- 25(P)   |
|---------------------|-----------|-----------|-----------|-----------|-----------|---------------|
| Andhra              | 24,463    | 31,375    | 36,364    | 51,465    | 65,710    | 77,600        |
| Pradesh Assam       | 1,916     | 2,011     | 908       | 1,072     | 1,105     | 1,131         |
| Bihar               | 6,726     | 11,387    | 12,616    | 13,885    | 14,009    | 14,002        |
| Chhattisgarh        | 4,102     | 4,139     | 3,539     | 6,198     | 5,398     | 5,428         |
| Gujarat             | 636       | 626       | 393       | 333       | 271       | 258           |
| Haryana             | 6,864     | 6,926     | 8,324     | 11,886    | 17,156    | 20,311        |
| Himachal Pradesh    | 5,722     | 6,254     | 6,267     | 6,682     | 6,776     | 7,024         |
| Jharkhand           | 11,475    | 15,656    | 16,732    | 20,284    | 18,592    | 22,381        |
| Karnataka           | 22,769    | 29,795    | 29,564    | 32,211    | 39,485    | 47,993        |
| Kerala              | 20,310    | 19,874    | 18,867    | 18,560    | 18,293    | 17,638        |
| Madhya              | 49,112    | 50,702    | 52,473    | 49,145    | 50,844    | 49,239        |
| Pradesh Maharashtra | 38,092    | 38,254    | 44,075    | 58,325    | 84,171    | 90,659        |
| Manipur             | 370       | 474       | 455       | 619       | 730       | 745           |
| Meghalaya           | 624       | 1,335     | 1,812     | 1,728     | 1,650     | 1,474         |
| Punjab              | 16,258    | 15,590    | 16,643    | 17,813    | 20,164    | 17,411        |
| Rajasthan           | 48,934    | 53,030    | 65,945    | 79,611    | 92,226    | 98,488        |
| Tamil Nadu          | 1,24,413  | 1,37,632  | 1,47,716  | 1,59,431  | 1,73,521  | 1,88,411*     |
| Telangana           | 22,202    | 31,032    | 30,137    | 35,239    | 46,127    | 59,230        |
| Tripura             | 413       | 431       | 663       | 607       | 730       | 0             |
| Uttar Pradesh       | 58,326    | 81,952    | 82,047    | 78,306    | 67,937    | 61,395        |
| Uttarakhand         | 1,818     | 1,785     | 1,447     | 1,562     | 1,964     | 1,729         |
| West Bengal         | 14,222    | 15,425    | 16,616    | 16,751    | 15,604    | 15,279        |
| Private Sector      | 20,544    | 20,426    | 22,126    | 23,122    | 10,216    | 7,595         |
| Grand Total         | 5,00,310  | 5,76,112  | 6,15,729  | 6,84,836  | 7,52,677  | 8,05,422      |

Source: PFC Report on Performance of State Power Utilities 2024-25 (Prov.)

*:  data  also  includes  last  year  figures  for  TANGEDCo  (Tamil  Nadu)  which  was recently unbundled into 3 companies one of which is TNPDCL (distribution company of Tamil Nadu). Considering, Outstanding Debt of only TNPDCL i.e. Rs. 1,01,782 Cr, total Outstanding Debt at National level would be: Rs. 7,18,793 Cr.

**************