Power utilities recorded a positive Profit After Tax

In a major development for India’s energy sector, **power distribution utilities (DISCOMs and power departments) collectively posted a positive Profit After Tax (PAT) of ₹2,701 crore for the financial year 2024-25, marking a significant turnaround after years of losses.

According to an official press release from the Ministry of Power, these utilities had recorded cumulative losses in previous years — ₹25,553 crore in FY 2023-24 and ₹67,962 crore in FY 2013-14 — making this profit milestone notable for the sector’s financial health.

Power Minister Shri Manohar Lal described this achievement as “a new chapter” for the distribution sector, attributing the progress to wide-ranging reforms and government initiatives aimed at strengthening operations and governance across utilities.

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Key Policy Initiatives Driving Change

The Ministry highlighted several reforms that supported this turnaround:

• Revamped Distribution Sector Scheme (RDSS): Focused on financial viability, infrastructure upgrades, and accelerated deployment of smart meters.
• Prudential Norms: Access to finance linked with performance outcomes, encouraging fiscal and operational discipline.
• Amendments to Electricity Rules: Ensuring transparent subsidy accounting and cost-based tariff adjustments.
• New Accounting & Disclosure Rules (2025): Promoting uniform financial reporting across utilities.
• Late Payment Surcharge Regulations: Reducing overdue dues and improving cash flows for power generators.

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Improving Performance Metrics

The press release also highlighted notable improvements in key performance indicators:

• AT&C Loss Reduction: Aggregate Technical & Commercial (AT&C) losses declined from 22.62% in FY 2013-14 to 15.04% in FY 2024-25.
• ACS-ARR Gap Narrowed: The gap between average cost of supply and revenue realized tightened sharply to ₹0.06 per kWh in FY 2024-25.
• Outstanding Dues Plummet: The overdue payments to power generators dropped by 96%, from ₹1,39,947 crore in 2022 to ₹4,927 crore by January 2026.
• Faster Payment Cycles: Distribution utility payment periods shortened from around 178 days to 113 days.