Privatisation is the path to sustainable and efficient power distribution in India

Privatisation has emerged as a viable solution to address financial stability, grid modernisation and improved consumer experience.

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Milind Solanki Vice President Ernst & Young

Financial distress, inefficiencies, and operational challenges have long plagued the power distribution sector in India. With over $120 billion in cumulative losses over the past 15 years, the traditional model of government-backed bailouts through schemes like the Revamped Distribution Sector Scheme (RDSS) has proven unsustainable. Privatisation has emerged as a viable solution to address these deep-rooted challenges and ensure financial stability, grid modernisation, and improved consumer experience.

Struggles of Power Distribution Companies

Discoms in India face many issues, including high transmission and distribution (T&D) losses, political inefficiencies, cross-subsidisation and non-payment of electricity dues. A significant burden is placed on commercial and industrial (C&I) consumers, who pay significantly higher tariffs compared to global standards. This model discourages industrial growth and creates an unsustainable financial structure for Discoms.