The Government of India’s Revamped Distribution Sector Scheme (RDSS), launched in 2021, is delivering measurable improvements in the operational efficiency and financial health of power distribution utilities, with Aggregate Technical and Commercial (AT&C) losses declining significantly to 15.04% in FY25 from 21.91% in FY21.
The scheme, aimed at modernising India’s power distribution infrastructure and strengthening DISCOM viability, has seen approvals for projects worth ₹2.83 lakh crore. Of this, ₹1.53 lakh crore has been allocated for loss reduction infrastructure, while ₹1.31 lakh crore is dedicated to smart metering initiatives.
Loss reduction measures under RDSS include large-scale upgrades such as replacement of ageing conductors, augmentation of substations and distribution transformers, creation of new substations, feeder segregation, and deployment of SCADA and Distribution Management Systems (DMS) for real-time monitoring. These interventions are designed to reduce technical losses and enhance the quality and reliability of power supply.
A key pillar of the scheme is the rollout of smart metering. Projects covering 20.33 crore smart meters have been sanctioned, including meters for 19.79 crore consumers, 2.11 lakh feeders, and 52.53 lakh distribution transformers. So far, 4.69 crore smart meters have been installed under RDSS, while the total installation across all schemes in the country has reached 6.13 crore.
The government has also introduced several measures to accelerate smart meter adoption and improve consumer confidence. These include prioritising prepaid smart meters for government, commercial, and high-load users, offering billing rebates, ensuring no penalties based on recorded maximum demand, enabling easy instalment-based recovery of arrears, and installing check meters to verify accuracy.
To ensure effective implementation, the scheme is monitored through a multi-tier institutional framework. Central nodal agencies, Power Finance Corporation and REC Limited, oversee project execution, while state-level Distribution Reforms Committees and a central Inter-Ministerial Monitoring Committee track progress and compliance.
Fund disbursement under RDSS is linked to improvements in operational and financial parameters, including timely subsidy payments, issuance of tariff orders, financial transparency, and reduction in regulatory assets. These measures have contributed to improved billing efficiency, which rose from 84.08% in FY21 to 87.59% in FY25, and collection efficiency, which increased from 92.9% to 97% during the same period.
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