Subsidy release, dues recovery help discoms post Rs 2,700-crore profit in FY25: Khattar

NEW DELHI: Release of subsidies accumulated over the years by respective state govts and recovery of dues from govt establishments emerged as the key factors that helped power distribution companies post a combined profit of over Rs 2,700 crore in 2024–25, compared with losses of Rs 25,553 crore in the previous year.

Speaking at the first annual conference of the All India Discoms Association (AIDA), EDICON 2026, Khattar said it was the first time since the corporatisation of state-run utilities that distribution companies had posted a combined profit. The govt attributed the turnaround to improved performance of state-run power utilities.

“Many states were not releasing subsidy amounts on time. We made sustained efforts over the past year, which led some states to fast-track the payments. This became a major reason for discoms turning profitable,” Khattar said, while appreciating states such as Bihar, Delhi, Himachal Pradesh, Rajasthan, Punjab, Tamil Nadu and Madhya Pradesh for making efforts in improving the health of power discoms.

Making a case for the installation of smart meters, the minister said recovery of long-pending dues from govt establishments had also contributed to improving the financial health of discoms. He urged distribution utilities to install smart meters in govt buildings, colonies and at the residences of govt officials.

Of the target of 20 crore smart meters, Khattar said about five crore had already been installed. He asked states and discoms to consider providing incentives to consumers to promote the adoption of prepaid smart meters across the country, which he said was important to address resistance to installation and ensure consumers benefit from them.

“We must begin with govt offices, employees and services, including installing prepaid smart meters at the residences of chief ministers and governors. Similarly, commercial, industrial and large domestic consumers should also be brought under prepaid smart meters,” Khattar said.

The power minister also spoke about the concept of cost-reflective tariffs to reduce discoms’ losses under the Electricity Amendment Bill, which is likely to come up for discussion and passage in the forthcoming budget session. “This will factor in all expenses on power supply in the tariff, thereby reducing losses. The bill is likely to come up in this budget session of Parliament, and we will try to build consensus for its smooth passage,” he said.

Khattar said cost-reflective tariffs would help discoms earn profits, which could be used for cross-subsidisation. He, however, said such cross-subsidisation should be carried out as per rules.

The minister said excess regulation by power regulators had led to higher losses for discoms and that there was a need to relax such regulations to improve their financial position. “Regulators want to curb discom losses, but excess regulation is, in fact, causing more losses,” he said.