Distribution in India after Two Decades of Unbundling: Why Integration is Back on the Table

India’s electricity distribution sector is at a turning point. Despite two decades of reform, distribution companies remain financially weak, with high technical and commercial losses and heavy dependence on government subsidies. The RBI Financial Stability Report (FSR) for June 2023 highlighted that the total accumulated losses of state Discoms reached a staggering ₹6.5 lakh crore by 2022-23, accounting for 2.4 per cent of the country’s GDP. According to CRISIL Ratings, Indian DISCOM losses decreased in 2025, with expected operating losses dropping to Rs 8,000-10,000 crore. This marks a significant reduction from previous years was supported by tariff hikes, cost reductions, and improved efficiency. The Aggregate Technical and Commercial (AT&C) losses saw a substantial decline, falling from 22.62% in 2014 to a projected 15% in 2025. These figures, thus, indicate a positive trend towards financial stability and operational improvements in the sector. Schemes like the Ujwal DISCOM Assurance Yojana (UDAY) and the Revamped Distribution Sector Scheme (RDSS) contribute towards improving the financial and operational health of DISCOMs

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