The Government of India’s Revamped Distribution Sector Scheme (RDSS), launched in 2021, is delivering measurable improvements in the operational efficiency and financial sustainability of power distribution companies (DISCOMs), with Aggregate Technical and Commercial (AT&C) losses declining to 15.04% in FY25 from 21.91% in FY21.
According to the Ministry of Power, distribution infrastructure projects worth ₹2.83 lakh crore have been sanctioned under RDSS. These include ₹1.53 lakh crore for loss reduction works and ₹1.31 lakh crore for smart metering initiatives, based on proposals submitted by states. The scheme targets reducing AT&C losses to 12–15% at the national level while eliminating the gap between Average Cost of Supply (ACS) and Average Revenue Realised (ARR).
Loss reduction measures under the scheme include replacement of old conductors, augmentation of substations and distribution transformers, development of new substations, feeder segregation, and deployment of SCADA/DMS systems for real-time monitoring. These interventions are aimed at improving supply quality and reducing system inefficiencies.
Smart metering remains a central pillar of RDSS. Sanctions have been issued for 20.33 crore smart meters, covering 19.79 crore consumers, 2.11 lakh feeders, and 52.53 lakh distribution transformers. So far, 4.69 crore smart meters have been installed under RDSS, while total installations across various schemes, including those implemented by states, have reached 6.13 crore.
To accelerate adoption, the Ministry has introduced several measures to enhance consumer confidence and participation. These include prioritizing prepaid smart meters for government, commercial, industrial, and high-load consumers, offering billing rebates as incentives, ensuring no penalties based on maximum demand recorded, enabling easy installment-based recovery of arrears, and installing check meters to validate accuracy.
The scheme’s implementation is being closely monitored through institutional mechanisms. Power Finance Corporation (PFC) Ltd and REC Ltd act as nodal agencies overseeing project execution. Additionally, state-level Distribution Reforms Committees, chaired by Chief Secretaries, and a central Inter-Ministerial Monitoring Committee, led by the Secretary (Power), review progress regularly.
Fund disbursement under RDSS is linked to improvements in operational and financial parameters, including timely payment of government subsidies and dues, regular tariff orders, transparent accounting practices, and avoidance of regulatory asset creation. These measures, alongside broader reforms by central and state governments, have contributed to enhanced DISCOM performance.
National billing efficiency improved from 84.08% in FY21 to 87.59% in FY25, while collection efficiency rose from 92.9% to 97% during the same period.
The update was shared by Minister of State for Power, Shripad Naik, in a written reply in the Rajya Sabha on March 30, 2026.
