India’s power distribution utilities have recorded a collective Profit After Tax of ₹2,701 crore in FY 2024–25, marking a decisive turnaround for a sector that had remained in losses for years after the unbundling and corporatisation of State Electricity Boards. The milestone represents a sharp reversal from a loss of ₹25,553 crore in FY 2023–24 and a much deeper loss of ₹67,962 crore in FY 2013–14.
Union Power Minister Manohar Lal described the achievement as the beginning of a new chapter for the distribution sector, attributing the turnaround to sustained reforms and focused interventions. He said the progress reflects the leadership and vision of the Prime Minister, under which the energy sector has emerged as a key driver of India’s economic growth and its journey towards a developed nation.
The improved financial performance is the result of a series of structural and policy initiatives aimed at restoring the viability of distribution utilities. These include the Revamped Distribution Sector Scheme, which focuses on infrastructure modernisation and accelerated smart metering; additional prudential norms linking access to finance with performance benchmarks; amendments to electricity rules to ensure timely cost adjustments, transparent subsidy accounting and full cost recovery; and the Electricity Distribution Accounts and Additional Disclosure Rules 2025, which have introduced uniform accounting standards and enhanced financial transparency.
Reforms have also strengthened payment discipline across the power sector. The Electricity Late Payment Surcharge Rules have led to a 96 per cent reduction in outstanding dues to generating companies, which fell from ₹1,39,947 crore in 2022 to ₹4,927 crore by January 2026. During the same period, the average payment cycle of distribution utilities improved from 178 days in FY 2020–21 to 113 days in FY 2024–25.
Operational indicators have shown parallel improvement. Aggregate Technical and Commercial losses declined from 22.62 per cent in FY 2013–14 to 15.04 per cent in FY 2024–25, signalling better efficiency and reduced leakages. Cost recovery has also strengthened, with the gap between Average Cost of Supply and Average Revenue Realised narrowing sharply from ₹0.78 per unit in FY 2013–14 to ₹0.06 per unit in FY 2024–25.
The Ministry of Power has complemented policy reforms with sustained engagement with States and Union Territories, including regional conferences of energy ministers held across the country in 2025. These interactions have focused on improving governance, financial discipline and service delivery in the distribution segment.
Officials said the positive momentum is expected to continue, supported by ongoing deliberations of a Group of Ministers constituted to further improve the financial viability of distribution utilities. The turnaround underscores the impact of coordinated reforms and positions the power distribution sector to better support India’s growing economy and long-term development goals.
