Union Minister of Power and Housing & Urban Affairs, Shri Manohar Lal, chaired the 5th meeting of the Group of Ministers (GoM) constituted to address issues related to the viability of electricity distribution utilities. The meeting took place in New Delhi with participation from senior central officials, state energy ministers, and power utility representatives.
The discussions centered around structural reforms needed to ensure the financial and operational health of distribution companies (discoms), prevent recurring debt traps, and provide reliable, affordable, and sustainable power supply across India.
High-Level Participation
The meeting witnessed the presence of Shri Shripad Yesso Naik, Union Minister of State for Power and New & Renewable Energy, along with energy ministers from Maharashtra, Uttar Pradesh, Tamil Nadu, Rajasthan, Andhra Pradesh, and Madhya Pradesh. Officials from the Ministry of Power, Central Electricity Authority (CEA), State utilities, and Power Finance Corporation Ltd. also joined.
Core Issues Affecting Distribution Utilities
The Secretary (Power), Government of India, outlined that discoms are struggling due to:
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Rising debt burdens
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High cross-subsidies increasing manufacturing costs
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Sub-optimal service delivery
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Weak financial sustainability discouraging private investment
The meeting emphasized the urgent need for irreversible reforms to ensure long-term financial health and quality service.
Proposed Reform Measures
Key reforms discussed include:
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Debt Restructuring Scheme: A new central government scheme to restructure distribution utility debts.
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Tariff Rationalization: Regulatory Commissions to issue full cost-reflective tariffs; State Governments to provide direct subsidies where necessary.
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Smart Metering: Accelerated installation of prepaid smart meters, starting with all government establishments.
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Regulatory Strengthening: Ensuring timely tariff orders, reducing litigation through mediation mechanisms, and enhancing accountability.
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State Government Liability: Recognizing distribution utility debt as an ultimate liability of State Governments.
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Data-Driven Decisions: Promoting data analytics for demand forecasting, power purchase optimization, and efficiency improvement.
Electricity (Amendment) Bill and Future Outlook
The Additional Secretary, Ministry of Power, presented provisions of the proposed Electricity (Amendment) Bill, aimed at:
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Enhancing financial viability of utilities
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Strengthening the regulatory framework
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Facilitating ease of doing business
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Supporting energy transition goals
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Optimizing distribution network utilization
Commitment to Reform
The Group of Ministers reaffirmed their commitment to work jointly with the Central Government, State Governments, and Regulators to strengthen the power distribution sector. They agreed that reforms must ensure transparency, cost-effectiveness, and sustainability while reinforcing the national goal of “Power for All, at All Times.”
