The third meeting of the Group of Ministers (GoM) on electricity distribution, chaired by Union Minister of State for Power and New & Renewable Energy Shripad Yesso Naik, highlighted the escalating financial stress faced by state-run distribution companies (DISCOMs). The meeting emphasised the urgent need for the implementation of cost-reflective tariffs, AI-driven reforms, and comprehensive financial restructuring to enhance the viability of these companies.

The meeting, held in Lucknow, was attended by the energy ministers of Uttar Pradesh, Andhra Pradesh, Madhya Pradesh, and Maharashtra, along with senior officials from the central government, state governments, PFC Ltd, REC Ltd, and state utilities.

The Minister of State stated, "There is a need to design a comprehensive mechanism for the financial restructuring of liabilities held by distribution utilities. This should focus on reducing the interest burden on utilities, promoting the development of energy storage solutions, and enabling daytime power supply for agriculture. These measures aim to lower overall power purchase costs and alleviate the financial strain of subsidies."

He also highlighted the critical need to integrate AI and digital innovations, establish cost-reflective tariffs, and explore a model akin to UDAY to ensure the long-term sustainability of the sector.

Energy Minister of Uttar Pradesh, A.K. Sharma stated, "The steps taken by the Government of India will significantly strengthen and improve the distribution sector, leading to long-term benefits." He emphasised the urgency of accelerating the adoption of renewable energy and enhancing energy storage solutions to tackle future demand and transition challenges effectively.