New Delhi: Electricity distribution companies (Discoms) had total outstanding borrowings of Rs 7.26 lakh crore as on March 31, 2025, Minister of State for Power Shripad Naik told the Upper House of Parliament, Rajya Sabha, on Monday. “As per PFC’s 14th Annual Integrated Rating and Ranking report on Power Distribution Utilities, the DISCOM-wise accumulated surplus/loss and total borrowings as on 31.03.2025 are placed,” Naik said in a written reply, sharing detailed state-wise data with the House.
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State-owned distribution utilities account for the bulk of the liabilities, with borrowings of Rs 7,11,402 crore, while private sector discoms had borrowings of Rs 14,975 crore, according to the data shared by the minister.
Among states, Tamil Nadu reported the highest outstanding discom borrowings at Rs 1,01,782 crore, followed by Rajasthan at Rs 98,488 crore and Maharashtra at Rs 90,659 crore, as per figures placed by Naik in the Rajya Sabha.
Uttar Pradesh’s discoms had outstanding borrowings of Rs 61,395 crore, while Telangana reported Rs 59,230 crore. Karnataka’s discom debt stood at Rs 47,993 crore, and Madhya Pradesh reported borrowings of Rs 49,239 crore.
Together, these states account for a substantial share of India’s total distribution sector liabilities, reflecting the continued concentration of financial stress among a handful of large power-consuming states.
Naik told the House that a significant portion of discom borrowings has been assessed as unsustainable and disallowed for recovery through tariffs. “As per information submitted to Power Finance Corporation (PFC) by the six states of Uttar Pradesh, Andhra Pradesh, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu that have a very high share (66 percent) of total borrowings of DISCOMs, i.e. Rs 2,74,120 crore as on 31.03.2025 is the quantum of debt not allowed by regulator (for recovery through tariff) and is treated as unsustainable,” he said.
“Financial liabilities of distribution utilities are the contingent liabilities of the respective state governments and need to be recognised as such,” the minister added.
Naik noted that discoms reported a profit after tax of Rs 2,701 crore in FY25 for the first time, even as legacy debt remains a concern. “With concerted efforts of Central and State Governments… these collective efforts have also resulted in DISCOMs achieving a profit after tax of Rs 2,701 crore for the first time,” he told the Rajya Sabha.
He said national aggregate technical and commercial losses declined from 21.91 percent in FY21 to 15.04 percent in FY25, while the average cost of supply–average revenue realised gap narrowed from Rs 0.69 per unit to Rs 0.06 per unit.
Outlining steps to address the sector’s financial stress, Naik said the Revamped Distribution Sector Scheme links funding to financial and operational performance, while additional borrowing space has been provided to states undertaking power sector reforms.
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He also cited tighter prudential norms for lending to state-owned utilities, rules for fuel and power purchase cost pass-through, and measures to ensure timely subsidy accounting and payments.
