The Comptroller and Auditor General of India (CAG) has launched a nationwide audit of 39 state-owned electricity distribution companies (DISCOMs), along with five government departments involved in power distribution, in one of the widest reviews ever undertaken of the financially stressed distribution segment.

Source: Electrical Mirror

The exercise will examine the financial position of the distribution utilities, their electricity procurement practices and the quality of services provided to consumers. Private distribution companies have been kept outside the scope of the audit.

According to data cited in the CAG's press note, 24 DISCOMs had negative net worth as of March 2025, while their accumulated losses stood at Rs 3.41 lakh crore. Their outstanding borrowings amounted to Rs 7.26 lakh crore, resulting in an annual interest burden of Rs 77,653 crore.

The audit will also examine demand forecasting, metering, billing, revenue collection and aggregate technical and commercial (AT&C) losses, with particular attention to short-term electricity purchases and transactions through power exchanges.

The national average AT&C loss stood at 15.04 per cent in FY2024-25, while 27 DISCOMs failed to meet the prescribed benchmarks. The Hindu reported that the CAG is widening the purview of its power-sector audit beyond the generation and transmission utilities it has usually examined, starting with DISCOMs through a horizontal performance audit that also covers the PM Surya Ghar rooftop solar scheme.

Source: The Hindu

The findings will be submitted to the respective state legislatures, while common shortcomings identified during the exercise will be shared with the Ministry of Power for consideration of policy measures.

Distribution remains the weakest financial link in India's power chain, and the audit's state-by-state findings are expected to feed directly into the Centre's continuing push to cut losses, improve billing and collection, and make state utilities viable.