India has expanded generation and renewables, cutting power shortages sharply. But distribution remains the sector’s weakest and most unresolved link
State discoms sell power below cost, subsidising households and farmers while burdening industry, creating persistent losses and structural inefficiency
With losses of ₹6.5 trillion by 2022-23, discoms strain state finances, fuel rising guarantees, and remain a recurring drag on public balance sheets
Debt relief schemes like UDAY brought little change. Fresh restructuring will only delay hard choices, while free power promises deepen the crisis
As large companies bypass discoms to buy directly from producers, utilities risk losing their best-paying consumers, further weakening their finances
Tariffs must reflect real costs, subsidies should be budgeted transparently, and discoms must modernise to ensure viability and support future growth