Turning the Tide: India's Power Utilities Celebrate Profits After Years of Loss

Power distribution utilities in India report a landmark profit of Rs 2,701 crore in FY25, reversing years of losses. Reforms have improved financial health, reduced AT&C losses, and narrowed the ACS-ARR gap. Government initiatives, including modernization, played a crucial role in this turnaround.

India's power distribution utilities have recorded a significant profit of Rs 2,701 crore in FY25 after a prolonged phase of financial losses. This milestone, announced by the Ministry of Power, marks a substantial improvement in the sector following a series of government-led reforms and initiatives.

Over the years, these utilities had consistently registered losses, reflecting challenges since the unbundling of State Electricity Boards. However, efforts to address these issues have finally borne fruit, as indicated by the profit figures for FY25 compared to the Rs 25,553 crore loss in FY24 and the Rs 67,962 crore loss in FY14.

Key reforms, including the introduction of the Electricity (Late Payment Surcharge) Rules, have been pivotal in diminishing outstanding dues and enhancing the efficiency of payment cycles. Additionally, the Aggregate Technical & Commercial (AT&C) losses have seen a reduction, evidencing the positive impact of strategic interventions like the Revamped Distribution Sector Scheme (RDSS).