India’s discoms have shown measurable improvement in their aggregate financial performance in FY 2025. For the first time, the sector recorded a positive profit after tax (PAT) on an accrual basis. The average cost of supply-average revenue realised (ACS-ARR) gap has also narrowed significantly, while payment cycles of discoms have shortened. However, these gains have not resolved the sector’s deeper financial distress, as discoms continue to face high accumulated losses, substantial debt, weak debt-servicing capacity, and high interest costs. State governments have responded with repeated bailout packages through various schemes for over a decade. While these measures have provided relief, they have not addressed the underlying…
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