Smooth progress of the Indian power sector is depending on proper in- and out-flow of money. Although according to a recent CRISIL Ratings report, operating losses are projected to decrease significantly by the end of FY26 – due to tariff hikes and improved efficiency, it is not a good sign that still in 2025 Indian DISCOMs are running in loss.
Power should be treated as a commodity, and like any other commodity its sale (supply) should generate profit. Government subsidy to DISCOMs cannot keep the power business viable for more than seven decades, which is happening in India.
Although, government incentives, especially for clean energy, and federal grants for infrastructure projects have become increasingly important for modernising the grid and funding new capital investments in the US, there the electricity distribution companies are not directly dependent on government subsidies for their core revenue.
The picture in the European Union (EU) is – the Electricity Distribution Companies are not typically dependent on government subsidies for their core operations, but they can and do receive public funding for specific projects. Their primary source of revenue is a regulated tariff paid by consumers, which covers their operating costs and investments.
As of October 2025, the Indian government has allocated `16,021 crore for the power distribution sector in the Union Budget 2025-26 as part of the ongoing Revamped Distribution Sector Scheme (RDSS).
It’s high time to think how long should our government go on supporting the DISCOMs plagued with AT&C losses?
Publisher & Editor-In-Chief
