India’s power distribution sector has reported a major turnaround, with distribution companies and power departments posting a combined net profit in FY 2024-25 after years of heavy losses. The improvement has been driven mainly by State-run discoms, which have sharply reduced after-tax losses over the past three years. Officials have linked the trend to better operational performance, lower dues, and policy measures aimed at improving financial discipline in the sector.
Sector-wide Profitability
India’s power distribution utilities recorded a net profit of ₹2,701 crore in FY 2024-25. This marks reversal from earlier years, when the sector remained deeply loss-making. The combined loss stood at ₹67,692 crore in FY 2013-14 and was reduced to ₹25,553 crore in FY 2023-24. The latest figures indicate a sustained recovery in the financial health of discoms and power departments.
Improvement in Operational Indicators
The Aggregate Technical and Commercial losses fell to 15.04% in FY 2024-25 from 22.62% in FY 2013-14. These losses include technical inefficiencies, electricity theft, billing gaps, and collection losses. The gap between the average cost of supply and the average revenue realised also narrowed sharply, from ₹0.78 per kilowatt-hour in FY 2013-14 to ₹0.06 per kilowatt-hour in FY 2024-25. This suggests that discoms are recovering costs more effectively.
Reduction in Outstanding Dues
The Electricity (Late Payment Surcharge) Rules have helped reduce pending dues to generating companies by 96%. Outstanding dues have fallen to ₹4,927 crore by January 2025 from about ₹1.35 lakh crore in 2022. Payment cycles have also improved, with distribution utilities reducing billing and payment delays to 113 days in FY 2024-25 from 178 days in FY 2020-21.
Policy Push and Future Outlook
The Power Ministry expects further improvement with the proposed Electricity Amendment Bill, 2026, which is likely to be introduced in Parliament during the Budget Session. The government views the current recovery as a new phase for the distribution sector, supported by reforms, better cash flow management, and stronger accountability in operations.
Last Modified: April 27, 2026