Power Ministry Pushes for Two-Year RDSS Delay
The Ministry of Power has formally requested a two-year extension for the INR 3 lakh crore Revamped Distribution Sector Scheme (RDSS) to complete its objectives. The extension request, which seeks to extend the scheme’s duration until FY28, has been prompted by the slow progress of key initiatives, particularly the installation of smart meters.
Launched in 2021, the RDSS is designed to improve the operational efficiency of India’s power distribution system, reduce Aggregate Technical and Commercial (AT&C) losses, and ensure the long-term sustainability of the power sector. With an ambitious target to install 50 million smart meters by March 2025, the scheme aims to modernise India’s power distribution infrastructure and enhance financial transparency. However, as of February 2025, only 20.8 million smart meters have been installed, significantly behind the target. The delay has been attributed to several challenges, including delays in tendering processes, issues with testing approvals, and difficulties in establishing a direct debit facility for billing.
Despite these setbacks, the government has ramped up installations, with 80,000 smart meters now being installed daily, and plans to increase this number to 100,000 in the coming months. The request for an extension comes in the wake of concerns raised by the Standing Committee on Energy regarding the worsening financial health of power distribution companies (discoms). The losses of discoms have risen from INR 5.45 lakh crore in FY21 to INR 6.92 lakh crore in FY24, largely due to inefficiencies in billing and revenue collection.
The gap between the Average Cost of Supply and Average Revenue Realised remains a significant challenge. The RDSS scheme is part of the government’s broader efforts to reform the power sector and reduce inefficiencies in the distribution system. As of now, power utilities have utilised 96% of the funds allocated for FY25, and the implementation has gained momentum despite initial delays. However, the government has acknowledged that further funding, particularly from lenders like the Rural Electrification Corporation (REC), will be required to meet the scheme’s goals.
While the Ministry of Power has urged for an extension to ensure the successful completion of RDSS objectives, the Standing Committee has recommended a thorough review of the scheme to address existing bottlenecks and ensure its goals are met. The government remains committed to improving the financial stability of discoms, reducing AT&C losses, and modernising India’s power infrastructure.
