India’s Power Sector and DISCOM Reforms

In 2015, India’s power distribution companies owed nearly ₹3.8 lakh crore. A decade of reform later, rural India finally gets power almost all day.

📑 Contents

Must Know.

Power Sector Reform Timeline.

Key Schemes and the Legal Framework.

The Problem. India’s power sector has run through several major Central reform schemes. Each targets the same problem: loss-making DISCOMs, and unreliable power supply.
Legal Foundation. The Electricity Act, 2003 is the legal foundation. It structures how tariffs, licensing, and DISCOM regulation work.
UDAY, 2015. UDAY (Ujwal DISCOM Assurance Yojana) launched in November 2015. State governments took over 75% of their DISCOMs’ debt, to ease financial strain.
RDSS, 2021. The current flagship scheme is RDSS (Revamped Distribution Sector Scheme), launched in July 2021. Its total outlay is ₹3,03,758 crore, including ₹97,631 crore in Central support.
RDSS Focus. RDSS funds two things mainly: loss-reduction infrastructure, and smart metering, for state-owned DISCOMs.

Progress Under RDSS.

Funding, Reach, and What Came Before.

Sanctioned Funding. Under RDSS, projects worth ₹1.53 lakh crore have been sanctioned for loss reduction. A further ₹1.31 lakh crore has been sanctioned for smart metering.
Smart-Metering Reach. That smart-metering work alone covers 19.79 crore consumers, across 2.05 lakh feeders.
Earlier Schemes. Earlier schemes fed into RDSS’s design: IPDS (Integrated Power Development Scheme, Dec 2014 to Mar 2022), and NSGM (National Smart Grid Mission, 2015 to Mar 2024). Both are now closed.
Draft Policy, 2026. A Draft National Electricity Policy, 2026 proposes further reform. This includes cost-reflective tariffs, an automatic monthly Fuel and Power Purchase Cost Adjustment (FPPCA), and a target of single-digit AT&C losses.
Supply Hours. Average daily power supply in rural areas rose from 12.5 hours in FY14, to 22.6 hours in FY26. In urban areas, it rose from 22.1 hours to 23.4 hours, over the same period.

The Deeper Numbers.

Scale of the Crisis, and How Reform Works.

The Original Crisis. UDAY’s debt takeover addressed a real crisis. DISCOM accumulated losses had reached roughly ₹3.8 lakh crore by March 2015, over 3.5% of GDP at the time.
AT&C Losses. “AT&C losses” (Aggregate Technical & Commercial losses) measure power that’s generated but never paid for. This includes power lost in transmission, and power that’s simply unbilled or unpaid. Cutting this figure is the central technical goal, across UDAY, RDSS, and the new Draft Policy alike.
Private DISCOMs Excluded. RDSS explicitly excludes private-sector DISCOMs from its financial assistance. It targets state-owned distribution utilities specifically.
Ending Regulatory Assets. The Draft Policy also proposes ending the practice of building up “regulatory assets” — deferred costs DISCOMs are allowed to recover later, instead of through timely, honest tariff revisions.

Latest Government Disclosures.

Rajya Sabha Replies, August 2026.

Data. 10 August 2026: Minister of State for Power Shripad Naik disclosed the government’s electricity-tariff and reform framework, in a written reply to the Rajya Sabha. This included the Draft National Electricity Policy, 2026, and the rural/urban supply-hours figures above. (Source: PIB)
Data. 10 August 2026: In a separate written reply the same day, the Minister disclosed detailed DISCOM digitalisation figures under RDSS: ₹47,124 crore released since FY23, and 14,853 DISCOM personnel trained in digital systems. (Source: PIB)