Reforms Propel India's Power Sector to Financial Resurgence

India's power distribution companies witness improving financial health due to policy reforms and technological advancements. A report by Macquarie highlights the impact of the Draft National Electricity Policy 2026 and introduction of smart meters. Financial profits are seen for the first time in decades with reduced technical losses.

India's power distribution companies are experiencing a financial turnaround, buoyed by policy advancements and the introduction of new technologies. As per a report by Macquarie, the sector is benefiting from the Draft National Electricity Policy 2026, the Electricity (Amendment) Bill 2026, and the Digital India Energy Stack.

Despite a record peak power demand of around 271 GW in May 2026, the report notes substantial improvements in the sector's financial health, with profits reaching Rs 25 billion in FY25. Contributing factors include investments in the Revamped Distribution Sector Scheme and the widespread implementation of smart meters.

The scheme aims to reduce AT&C losses to 12-15 per cent, closing the gap between average cost of supply and revenue realized, by sanctioning Rs 1.53 trillion for distribution infrastructure and Rs 1.3 trillion for smart metering projects.