Empowering Discoms: RDSS objectives and progress so far

Launched in 2022, the Ministry of Power’s (MoP) flagship Revamped Distribution Sector Scheme aims to improve operational eff­iciencies and financial sustainability by offering results-linked financial assistan­ce to discoms. This assistance will str­en­gthen the supply infrastructure, contingent upon meeting pre-qualifying criteria and achieving basic benchmarks. The scheme aims to allocate a total of Rs 3,037.58 billion, including gross budgetary support (GBS) of Rs 976.31 billion, for a period of five years (2021-22 to 2025-26). This financial assistance is aimed at modernising and strengthening the distribution infrastructure, enhancing the reliability and quality of supply to end-consumers, and installing smart meters. Tendering activity for sm­a­rt metering and loss reduction works under the sc­he­me has gained momentum in rece­nt months. Contracts for the implementation of these works have been awarded, raising expectations for tangible prog­re­ss under the scheme. A look at the status of the RDSS…

Targets under the programme

The main objectives of the RDSS are to re­duce aggregate technical and commercial (AT&C) losses to 12-15 per cent and to eliminate the average cost of supply-average realised revenue (ACS-ARR) gap by financial year 2024-25. Addi­tionally, the scheme aims to address several concerns related to regulations, governance, government support and technological issues in the power distribution segment.

The RDSS is divided into two key components: Part A, which provides financial support for prepaid smart metering, system metering and distribution in­frastructure upgrades; and Part B, which focuses on training, capacity buil­ding, and other enabling and supporting activities. The sanctioned outlay for sm­art metering amounts to approximately Rs 1,349.86 billion, while for loss reduction works it is Rs 1,191.34 billion.

A key intervention envisaged under the RDSS is prepaid smart metering, with an estimated outlay of approximately Rs 1,500 billion and a GBS of Rs 230 billion. The scheme aims to install a total of 250 million smart meters by 2025-26. Smart metering projects are planned to be implemented under the design-build-finance-operate-transfer mode through the public-private partnership approach. In addition to prepaid smart metering for consumers, advanced metering infrastructure and system metering will be implemented at the feeder and distribution transformer levels, equipped with communicating features. Further­mo­re, the RDSS promotes the adoption of advanced information and communication technologies, such as artificial intelligence and machine learning, to analyse data generated by smart me­ters and information technolo­gy (IT)/op­e­ratio­nal technology (OT) devices.

Under the RDSS, capital investment has also been allocated for loss reduction works, system strengthening to accommodate load growth, and modernisation required to establish a smart distribution sy­stem. Loss reduction works in­volve replacing conductors with aerial bunch­ed cables, implementing high voltage distribution systems (HVDS) and feeder bifurcation. Similarly, system strengthening involves creating new sub­stations and feeders, upgrading tra­nsformation ca­pacity, and improving ca­ble infrastructure. Modernisation eff­orts include im­plementing supervisory control and data acquisition, distribution management systems, IT/OT, en­ter­­prise resource planning, geographic information system-enabled applica­ti­ons and advanced distribution management systems. These initiatives aim to en­hance distribution systems. To ensure a consistent and uninterrupted supply of electricity to farmers, the RDSS includes provisions for the segregation of agricultural feeders where the agricultural load exceeds 30 per cent. A convergence with the KUSUM programme has also been envisioned. As of now, Rs 299.45 billion has been sanctioned for the segregation of agricultural feeders.

Progress so far

According to a recent Lok Sabha report (March 2023), the utilisation of funds un­der the scheme during 2021-22, 2022-23 stood at Rs 53.7 billion against the bud­­geted outlay of Rs 85.65 billion. Under the RDSS, detailed project re­por­ts (DPRs) totalling Rs 1,191.34 billion, inclusive of GBS of Rs 758.84 billion, have be­en sanctioned. Out of the total sanctio­n­e­d funds, as proposed by states/discoms, Rs 145.09 billion has been sanctioned for districts of every state (excluding Odisha, Karna­ta­ka and Telangana) for works such as HVDS implementation, cabling and feeder segregation. According to a Lok Sabha report (Febru­ary 2023), 204.62 million prepaid smart meters, 5.41 million distribution trans­for­mer (DT) meters and 198,826 feeder meters have been sanctioned across 28 states (46 discoms) under the RDSS, for ap­p­roxi­ma­tely Rs 1.35 trillion. Tenders have been issued for smart metering works, covering approximately 103 million prepaid smart meters for consumer metering, as well as 3.8 million system meters for DTs and feeders. Fur­ther, tenders have been iss­ued for distribution infra­struc­ture/loss reduction works amounting to Rs 788.27 billion.

In the past month, several states/UTs ha­ve been onboarded to the scheme.  Th­e­se in­clude the NDMC area of New Delhi wi­th a project cost of Rs 3.37 billion, Ladakh with a sanctioned cost of Rs 6.87 billion (including grid connectivity of the Chan­gthang region, downline in­frastruc­ture in the Zanskar region and other loss reduction works in Leh and Kargil districts of Ladakh) and Nagaland.


The strategic measures of the RDSS are anticipated to improve the long-term viability of the distribution sector while reducing the ACS-ARR gap and AT&C losses, levels of outstanding subsidy pay­able by the state government, and outstanding go­vernment department dues. Going forward, im­plementation of the RDSS will be enhanced significantly  through prepaid smart metering, enfor­ce­ment of prequalification conditions and implementation of the results-lin­ked framework.