Union MoS Chairs 4th GoM Meet to Revive DISCOM Viability and Drive Power Sector Reforms

The Union Minister highlighted the need for urgent regulatory reforms to improve utility efficiency and transparency.

 The 4th meeting of the Group of Ministers (GoM), constituted by the Government of India to address the pressing issues related to the financial and operational viability of electricity distribution utilities (DISCOMs), was convened today under the chairmanship of Shri Shripad Yesso Naik, Union Minister of State for Power and New & Renewable Energy.

Held in Vijayawada, Andhra Pradesh, the high-level meeting brought together prominent figures from the energy ministries of several key states and senior representatives from central and state power agencies. The meeting aimed to assess ongoing reforms, deliberate on actionable interventions, and outline a strategic path forward for the sustainability of India's distribution sector.

Prominent Attendees and Host State’s Role

Key members of the GoM in attendance included:

• Shri A. K. Sharma, Energy Minister, Uttar Pradesh

• Shri Gottipati Ravi Kumar, Energy Minister, Andhra Pradesh

• Shri Hiralal Nagar, Minister of State for Energy, Rajasthan

• Smt. Meghana Sakore Bordikar, Minister of State for Energy, Maharashtra

The event was also attended by representatives from the All India DISCOM Association (AIDA), senior officials from the Ministry of Power, Government of India, various State Governments, State Power Utilities, and Power Finance Corporation (PFC) Ltd.

In his welcome address, Shri Shripad Yesso Naik thanked the Government of Andhra Pradesh for hosting the event and acknowledged the support and collaboration extended by the participating states. He recapped the critical insights and proposals from the previous three meetings, emphasizing that addressing DISCOM challenges requires unified efforts by both Central and State Governments.

Focus on Regulatory Reforms and Financial Health of DISCOMs

The Union Minister highlighted the need for urgent regulatory reforms to improve utility efficiency and transparency. He underlined the collective responsibility of State Governments and State Electricity Regulatory Commissions (SERCs) in ensuring long-term sustainability of the power distribution sector.

A comprehensive review of the current Tariff Policy was suggested, considering its inadequacies in addressing contemporary challenges. AIDA, participating as a special invitee, urged that SERCs strictly adhere to the Tariff Policy and associated rules when finalizing tariff petitions. The association stressed the importance of aligning policies with both consumer needs and utility capabilities.

Presentations: Data-Driven Insights and Policy Recommendations

A detailed presentation by the Joint Secretary (Distribution), Ministry of Power, laid bare the financial vulnerabilities of DISCOMs in member states. Key findings included:

• Escalating debt levels outpacing annual revenue growth

• Major disallowances in tariff/true-up orders by regulators

• Delays in payment of government department dues and subsidies

• Inadequate cost-reflective tariff structures

The presentation included a proposed action plan to reduce outstanding debt burdens and operational losses. Emphasis was also placed on modernizing utility operations through digitization, especially the adoption of smart metering, Artificial Intelligence (AI), and Data Analytics for load forecasting and power purchase optimization.

Strategic Recommendations and Future Vision

Several member states emphasized that mere policy proposals would not suffice without effective implementation on ground. Concrete suggestions included:

• Enabling cost-reflective tariffs

• Timely disbursal of subsidies

• Clearance of dues by government departments

• Expedited implementation of the Revamped Distribution Sector Scheme (RDSS)

• Exploring public-private partnerships, privatization, and introduction of parallel licensees to improve efficiency

Additionally, it was proposed that the GoM framework be extended beyond the current reporting timeline to allow for continued inter-state collaboration. A rotating mechanism was suggested to enable different states to host brainstorming sessions on persistent power sector challenges.

One key proposal underlined the need to convene a dedicated session focused on reducing power purchase costs, bringing together regulators, generation companies, DISCOMs, and financial institutions.

Collective Commitment Toward Power Sector Sustainability

The meeting concluded with a reaffirmation of the Group of Ministers' commitment to ensuring the financial viability of DISCOMs across India. The Union Minister expressed optimism that through collaborative dialogue, policy realignments, and strategic interventions, India's power distribution sector could evolve into a robust, efficient, and consumer-friendly ecosystem.

The deliberations of the 4th GoM meeting have laid a strong foundation for deeper reforms, with the promise of transforming DISCOMs into commercially viable and operationally sound entities — a critical step for ensuring reliable and affordable electricity for all.