India’s smart metering market is on the cusp of exponential growth. Following the success of various pilot projects across the country and positive outcomes for stakeholders, the pace of smart meter awards and installation is increasing. As of October 24, 2025, over 43.8 million smart meters have been installed. In 2024-25, nearly 14.7 million smart consumer meters were installed, over three times the number installed in the previous year, driven by the flagship Revamped Distribution Sector Scheme (RDSS).
For discoms, smart metering offers multiple benefits, including improved billing and collection efficiency, reduced aggregate technical and commercial (AT&C) losses, interest cost savings from prepaid metering, and reduced deviation settlement mechanism payables owing to better demand forecasting. Other advantages include lower asset failure rates, deferred capital expenditure through optimal asset utilisation, faster outage detection and reduced billing costs. For consumers, the benefits include real-time consumption management, loading information and alerts, enhanced safety and reliability, and convenience through mobile app-based services. Consumers also receive timely disruption alerts, improved power quality and better integration of rooftop solar, electric vehicles and other distributed
energy resources.
Policy enablers
With an outlay of Rs 3.03 billion for a period of five years (2021-22 to 2025-26), the RDSS is providing financial assistance to discoms for the modernisation and strengthening of distribution infrastructure, as well as for improvements in reliability and quality of supply to end-consumers. The scheme incorporates all current projects sanctioned under programmes such as the Integrated Power Development Scheme, the Deendayal Upadhyay Gram Jyoti Yojana and the Prime Minister’s Development Package 2015.
There are two key components of the scheme. Part A is pivotal for smart metering projects – it aims to install 250 million prepaid smart meters during the scheme period and provide financial support for prepaid smart metering, system metering and distribution infrastructure upgrades. Part B is focused 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. Further, system metering at the feeder and distribution transformer levels with communication features and associated advanced metering infrastructure (AMI) are essential elements of the scheme. The roll-out of smart meters is being carried out via public-private partnerships in the total expenditure (totex) mode so that service-level agreements can be enforced for proper energy accounting, in turn facilitating the identification of defaulting consumers and meter tampering.
While the RDSS has a deadline for 2025-26, the Ministry of Power has proposed extending the scheme by two years, until 2027-28, to achieve the envisaged targets.
Approximately 224 million smart consumer meters, 5.31 million distribution transformer (DT) meters, and 0.2 million feeder meters have been sanctioned across the onboarded states. As of October 24, 2025, over 145.13 million consumer smart meters have been awarded, accounting for 65 per cent of the total sanctioned meters; and 43.8 million consumer smart meters have been installed till date, as per the National Smart Grid Mission dashboard. Further, 4.7 million DT meters (89 per cent of the sanctioned meters) and 184,307 feeder smart meters (89 per cent of the sanctioned meters) have been awarded.
During 2024-25, 14.71 million smart consumer meters were installed, nearly three times the installations in the previous year. State-wise, Bihar is leading with the highest number of installed smart meters, totalling 7,958,426, followed by Maharashtra with 6,660,423. Uttar Pradesh closely trailing with 5,719,615, while Assam and Madhya Pradesh have installed 4,730,999 and 2,895,672 meters respectively.
Performance improvements
Metering has resulted in improved operational benefits for utilities. According to the 13th Integrated Ratings and Rankings Report by Power Finance Corporation Limited, AT&C losses at the national level were 16.5 per cent in 2021-22 but fell to 15.36 per cent in 2022-23, and rose marginally to 16.12 per cent in 2023-24, driven largely by a 1.05 percentage point decline in collection efficiency. About 40 of 63 utilities saw an improvement in their AT&C losses in 2023-24, with 18 utilities recording a greater than 2 percentage point improvement.
Collection efficiency declined from 97.56 per cent in 2022-23 to 96.51 per cent in 2023-24. However, despite the dip, over 22 utilities achieved a collection efficiency of 99.5 per cent or more, with 15 utilities reaching a perfect 100 per cent.
Billing efficiency for private and state discoms remained at similar levels till financial year 2023. Billing efficiency improved across 36 discoms, with six showing a significant improvement of over 2 percentage points – PGVCL, UPCL, AVVNL, MSPDCL, SBPDCL and DVVNL. Notably, private discoms improved their billing efficiency from 87.68 per cent to 88.22 per cent, while power departments increased their efficiency from 86.54 per cent to 87.27 per cent.
In 2023-24, the average cost of supply-average revenue realised (ACS-ARR) gap narrowed by 20 paise per unit, from Re 0.59 per kWh in 2022-23 to Re 0.39 per kWh in 2023-24. This led to a decline in the absolute cash gap, from Rs 826.65 billion in 2022-23 to Rs 578.54 billion in 2023-24. In addition, several state/union territory discoms reported improvements, including those in Delhi, Maharashtra, Uttar Pradesh, Ladakh, Assam, Karnataka, Bihar, Puducherry, Manipur, Uttarakhand, Gujarat, West Bengal and Tamil Nadu, where ACS-ARR gap reductions exceeded Re 0.50 per kWh.
Issues and challenges
The adoption of smart meters faces several key challenges hindering large-scale implementation and effective operation. One major issue is consumer resistance and lack of awareness, as many consumers are reluctant to replace existing meters or are unavailable at their premises during installation. Consumer indexing also presents difficulties, along with natural calamities, rain and other geographical challenges that affect deployment and maintenance. Communication technology issues and the integration of smart meters with legacy systems further complicate implementation. Additionally, ensuring active consumer engagement remains a concern. Other technical and operational hurdles include interoperability issues, managing a unified head-end system across multiple smart metering vendors, and addressing cybersecurity and data privacy risks. Further, regulatory and policy support is essential to facilitate prepayment mechanisms, time-of-use or time-of-day tariffs, demand response initiatives, and timely connect/disconnect and recharge processes.
Weak consumer engagement mechanisms and poor feedback systems further impact satisfaction. Delays in addressing complaints and inadequate post-installation support erode confidence. Utilities should adhere to standard operating procedures covering pre-installation surveys, installation support and structured feedback collection.
Another major challenge is outdated IT infrastructure. Many utilities continue to use legacy systems that are difficult to integrate with smart metering technologies. Upgrading and modernising IT systems and deploying hybrid communication technologies can enhance data reliability and reduce meter non-communication.
Data utilisation also remains limited. Many utilities lack the technical capacity and skilled personnel to analyse and apply meter data effectively. Developing in-house analytics capabilities and identifying key operational use cases can help maximise the value of smart meter data.
Operational delays–such as slow installation, delayed fund release and extended testing timelines–further affect implementation. Streamlining processes, ensuring the timely establishment of direct debit facility agreements and adopting sample-based testing using in-house laboratories can accelerate deployment.
Further, supply chain constraints persist due to overdependence on a few original equipment manufacturers. Diversifying procurement across multiple vendors can help ensure adequate meter availability and timely implementation.
Implementation experience and outcomes
These challenges notwithstanding, early pilot projects in states such as Assam and Bihar have provided critical learnings that have helped shape the national smart metering roll-out. These pilots offered valuable insights into the operational, technical and consumer-related aspects of implementation, enabling other discoms to avoid initial pitfalls. The best practices emerging from these early initiatives have supported other states in scaling up their own projects effectively. Simultaneously, frameworks around data privacy, cybersecurity and regulatory guidelines have evolved alongside implementation to ensure a secure and compliant ecosystem.
Smart meter implementation has significantly enhanced operational efficiency for discoms. Utilities now have near-real-time visibility into electricity consumption, enabling more transparent billing, pilot initiatives on time-of-day tariffs and improved demand-side management. The availability of granular network data has also empowered discoms to make data-driven decisions, improving reliability and system performance.
To support effective implementation, several initiatives are being undertaken. Regular workshops are conducted for discoms and key stakeholders to share best practices, address challenges and build awareness of smart metering benefits. Comprehensive standard operating procedures and templates have been developed to streamline project execution, including Level 2 (L2) implementation plans for improved monitoring. Standardised analytics reports and templates have been introduced to help discoms harness data from AMI. AMI service providers (AMISPs) are also driving data analytics-based pilot use cases to demonstrate practical applications. Additionally, consumer engagement is being strengthened through the ConsumerApp, featuring alerts and notifications, while clear guidelines have been issued for addressing faulty or burnt meters. Cybersecurity provisions have been enhanced in AMISP standard bidding documents to safeguard infrastructure and consumer data.
Going forward, discoms are focusing on data analytics solutions, capacity building, monitoring of smart meter installation projects and prompt issue resolution to sustain momentum. Ensuring effective implementation of payment security mechanisms and improving cash flow management will further streamline project execution. Further, continued support for indigenous manufacturing under the Make in India initiative will strengthen the domestic smart metering ecosystem.
Akanksha Chandrakar
