The Comptroller and Auditor General of India (CAG) has launched a nationwide audit of 39 state-owned power distribution companies (discoms), along with five additional departmental undertakings. Unlike previous fragmented audits that targeted individual entities across different years, this current exercise represents a consolidated review of the power sector's distribution segment.
According to officials, the audit began in July and is projected for completion by the middle of the next financial year. While the review evaluates standard operational benchmarks such as billing efficiency, collection performance, and Aggregate Technical and Commercial (AT&C) losses, it also prioritizes a detailed analysis of financial sustainability and the quality of services provided to end-users.
A significant component of the assessment involves direct consumer feedback. The CAG plans to survey approximately 10,000 consumers across domestic, industrial, commercial, and agricultural categories to gauge their satisfaction with power reliability and service quality. This engagement may involve the Ministry of Statistics and Programme Implementation or other specialized survey agencies.
The audit also examines the increasing trend of short-term power procurement. Officials highlighted that the share of such procurement in states' total purchase baskets has grown to nearly 14%, compared to 7-8% five years ago, with more than 56% of these transactions occurring through power exchanges. The audit is assessing the financial impact of these procurement costs on both the distribution companies and consumers.
Key facts
- The audit covers 39 state-owned discoms and five departmental electricity undertakings, excluding private distribution companies.
- Performance is being assessed for the period between the 2020-21 and 2025-26 financial years.
- Public sector discoms currently report accumulated losses of Rs 6.77 lakh crore and total borrowings of Rs 7.11 lakh crore.
- The audit is conducted by the CAG’s State Commercial Audit division, established last year to focus on public sector enterprises.
- Findings will be submitted to state legislatures, with systemic issues reported to the Union Ministry of Power.
Why it matters
Officials noted that discoms serve as the primary interface between the power sector and the public, and their financial stability affects the entire energy value chain. The integrated assessment aims to identify systemic deficiencies, as government revenue grants are increasingly being diverted to cover debt and loss payments rather than infrastructure investment. The audit is part of a broader plan to examine the entire power sector, including transmission, generation, and renewable energy, over the next four years.
Background
The power sector is projected to attract investments of approximately Rs 50 lakh crore by 2032 and Rs 200 lakh crore by 2047, prompting the CAG to initiate this comprehensive, multi-segment audit approach.
Source: Indian Express, The Hindu
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