The Indian government has unveiled an INR3,050bn (US$42bn) electricity distribution reform program to help reduce losses and improve the efficiency of electricity distribution companies (discoms) over the next 5-year period. The scheme proposes to upgrade supply systems, installs prepaid meters and separate supply lines from subsidised and non-subsidised customers. Around 20% of the spending plan will be funded by the Union Budget of India, and the rest will be raised from international financial institutions, such as the Asian Development Bank (ADB) and the World Bank. In 2019, the rate of electricity transmission-distribution losses reached 18% in India, against 8% in Indonesia and 5% in China.
In May 2020, as part of an INR20,000bn (US$265bn) stimulus package, the Indian government proposed an INR900bn (US$11.9bn) aid program for the power distribution sector. Distribution companies have accumulated significant late payments due to power generating companies, liquidity issues due to restricted cash flow, uncertain income due to closure of industrial and commercial operations and low power demand in the wake of the coronavirus epidemic.
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