CAG Launches Nationwide Audit Of 39 Power Discoms Amid ₹3.41 Lakh Crore Accumulated Losses: Report

The Comptroller and Auditor General (CAG) has launched a nationwide integrated audit covering 39 public-sector power distribution companies (discoms) and five electricity departments, examining their financial performance and operational efficiency.

According to a report by Business Standard, the exercise involves 28 officers and will analyse five years of data, with statewise audit reports expected in 2027.

Unlike previous audits, the initiative adopts a common methodology across states to identify systemic weaknesses and recommend policy improvements.

The four-year programme will subsequently cover electricity transmission, generation and renewable energy.

The audit will assess aggregate technical and commercial (AT&C) losses, billing efficiency, revenue collection, electricity supply reliability and financial sustainability.

It will also survey approximately 10,000 consumers nationwide to evaluate service quality.

Short-term electricity procurement, including purchases through power exchanges, will receive particular attention.

Preliminary analysis indicates weaknesses in demand forecasting, metering, procurement practices, regulatory accounting and customer services.

According to a senior official cited in the report, government revenue grants have increased substantially, with support increasingly directed towards covering losses, debt and interest rather than infrastructure investment.

The audit will also examine implementation of the Centre's Revamped Distribution Sector Scheme (RDSS).

CAG data showed that 41 discoms reported combined profits of ₹32,661 crore in FY25, while 23 others recorded losses totalling ₹29,959 crore.

Accumulated losses across discoms exceeded ₹3.41 lakh crore by March 2025, while outstanding borrowings surpassed ₹7.26 lakh crore.

Their interest burden stood at ₹77,653 crore. The CAG has engaged institutions including the Indian Institute of Management Ahmedabad to strengthen audit methodology and capacity.

Findings will be presented to state legislatures, while common policy concerns will be referred to the Union Power Ministry.

Separately, the Ministry's latest annual distribution utility ratings placed Gujarat utilities and Odisha's private discoms among the strongest performers.

Utilities in Telangana and Jharkhand ranked among the weakest.

The audit aims to identify reforms needed to improve electricity distribution efficiency and reduce financial pressure on state governments.