New Delhi: Despite years of investment and reform in the power sector, India continues to lose a substantial portion of the electricity it generates before it ever reaches consumers. According to data presented by the Ministry of Power in the Lok Sabha, the country recorded transmission losses of 3.55% and distribution losses of 13.09% in FY2023–24, resulting in a combined transmission and distribution (T&D) loss of 16.64% of total electricity generation.
This makes India one of the highest loss-incurring power systems globally—both in percentage terms and absolute volume.
The magnitude of these losses in financial terms is staggering.
In FY 2023–24, India generated approximately 1,744 billion units (BU) of electricity. A 16.64% T&D loss implies that around 290 BU of electricity never reached end users. To put this in perspective, Uttar Pradesh, the country’s most populous state, consumed about 115 BU in 2023, while Madhya Pradesh consumed around 70 BU, and Bihar roughly 30 BU annually.
This means India effectively loses more electricity each year than the combined consumption of these three major states.
In FY2023–24, Madhya Pradesh reported substantial T&D losses. While intra-state transmission losses were relatively contained at 2.61%, distribution losses were high—28.04% for East Discom (vs. a target of 15.5%), 25.70% for Central Discom (vs. 16.5%), and 12.33% for West Discom (below its target of 14.5%). These contributed to an overall financial loss of approximately Rs 3,000 crore. The excessive distribution losses—largely driven by theft, defective meters, and poor billing—meant that Madhya Pradesh’s aggregate T&D losses exceeded the national average of 16.64%.
Assuming a conservative average tariff value of Rs 5 per unit, the economic loss from 290 BU of electricity translates to about Rs 1.45 lakh crore annually—nearly 0.5% of India’s GDP. This underscores the systemic financial stress on distribution companies (discoms), increasing their dependence on subsidies and reducing their capacity to invest in infrastructure upgrades—factors that ultimately affect the consumer through reduced service reliability and rising tariffs.
When compared internationally, India’s T&D losses remain among the highest. Countries like Germany, the United Kingdom, and France report losses well below 7%, with the United States averaging 5–6%. In South Asia, Bangladesh reports losses around 8%, Sri Lanka about 9%, while Pakistan hovers around 17–18%. India’s 16.64% puts it on par with some of the least efficient grids in the world.
Transmission losses—largely stemming from technical factors like line resistance and voltage drops—are harder to eliminate but can be reduced through grid modernization and better load management. Distribution losses, however, stem primarily from commercial inefficiencies: electricity theft, faulty or bypassed meters, unbilled usage, and poor bill recovery mechanisms.
The government has rolled out multiple programs to address this—most notably the Revamped Distribution Sector Scheme (RDSS), which promotes smart metering, feeder-level monitoring, and infrastructure upgrades. But the pace of implementation varies widely across states, and chronic financial stress among discoms remains a structural challenge that continues to hamper efforts at loss reduction.
