India’s power discoms turn profitable after years, post Rs 2,701 crore profit in FY25

Over the past decade, the Ministry of Power has also held regular engagements with states and Union Territories to push reforms.

• India's power distribution sector posts Rs 2,701 crore profit in FY 2024-25
• Sector reverses decade-long losses due to sustained reforms and new policies
• AT&C losses drop to 15.04%, dues to generators fall 96% since 2022

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India’s power distribution utilities, DISCOMs and state power departments, have reported a collective Profit After Tax (PAT) of Rs 2,701 crore in FY 2024-25, marking a major turnaround for a sector that has remained in losses for over a decade.

According to the Ministry of Power, distribution utilities had been consistently reporting losses since the unbundling and corporatisation of State Electricity Boards. “The positive PAT of Rs 2,701 crore returned in FY 2024-25 compares to a loss of Rs 25,553 crore in FY 2023-24 and a loss of Rs 67,962 crore in FY 2013-14,” the ministry said.

Union Power Minister Manohar Lal described the development as a turning point for the sector, saying it marks “a new chapter for the distribution sector” and is the outcome of sustained reforms to address long-standing structural challenges.

The minister attributed the improvement to the leadership of Prime Minister Narendra Modi, quoting him as saying, “India is driving not only its growth but also the growth of the world, with the energy sector playing a significant role in this.”

Manohar Lal said the government remains committed to reforms so that the power sector can support India’s expanding economy and contribute to the vision of Viksit Bharat.

Key initiatives cited by the ministry include the Revamped Distribution Sector Scheme (RDSS), which focuses on infrastructure modernisation, financial viability and faster rollout of smart meters. Additional prudential norms linking access to finance with performance benchmarks have also been introduced to improve fiscal discipline among utilities.

Amendments to electricity rules have enforced timely cost adjustments, prudent tariff structures and transparent subsidy accounting to ensure full cost recovery. The Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025 have introduced uniform accounting standards and greater transparency across distribution utilities.

The Electricity (Late Payment Surcharge) Rules have helped enforce timely payments, supporting investment in new renewable energy projects. Incentives for states to implement reforms have also been linked to borrowing limits under the Additional Borrowing Scheme.

“The result of these reforms is evident not just in the positive PAT posted by the Distribution Utilities after so many years, but also in other performance indicators,” the Ministry of Power said.

Aggregate Technical and Commercial (AT&C) losses have declined significantly from 22.62 per cent in FY 2013-14 to 15.04 per cent in FY 2024-25. The gap between Average Cost of Supply and Average Revenue Realised (ACS-ARR) has narrowed sharply from Rs 0.78 per unit to Rs 0.06 per unit during the same period.

Outstanding dues to power generators have fallen by 96 per cent, from Rs 1.39 lakh crore in 2022 to Rs 4,927 crore by January 2026, while payment cycles have improved from 178 days in FY 2020-21 to 113 days in FY 2024-25, the ministry added.

Over the past decade, the Ministry of Power has also held regular engagements with states and Union Territories to push reforms. These included regional conferences of energy ministers held in Gangtok, Mumbai, Bengaluru, Chandigarh and Patna in 2025, led by Manohar Lal.

The ministry said this momentum is expected to continue through deliberations of a Group of Ministers, chaired by Union Minister of State for Power and New & Renewable Energy Shripad Naik, aimed at further improving the financial health of DISCOMs.