According to a report released by NITI Aayog on Tuesday, losses at state-run power distribution companies (Discoms) increased to Rs 90,000 crore in FY21. Discom losses were down 38% year on year to Rs 38,000 crore in FY20, according to Union Power Minister RK Singh, owing to corrective initiatives such as prompt rate changes and improved billing and collection efficiency. Due to the pandemic upsetting the reform process that induced a certain discipline among these organizations, losses were predicted to grow again in 2020-21.

The report, co-authored by NITI Aayog and energy think tank RMI, recommended a host of measures, including providing greater autonomy to discoms, timely tariff revisions, increasing competition in the business and larger involvement of the private sector to improve the health of these perennially-distressed entities.

“A robust and long-lasting solution to the woes of the discoms requires changes in policy as well as organizational, managerial, and technological reforms,” said Clay Stranger, managing director, RMI.

Experts have pointed that revenue of discoms may have significantly dropped in FY21 with demand from high-paying industrial and commercial consumer segments getting disrupted amid the lockdowns to contain the coronavirus.