The government’s flagship reform programme, the Revamped Distribution Sector Scheme (RDSS) is strengthening distribution infrastructure, accelerating the deployment of smart prepaid meters and driving the digitalisation of utility operations. With an outlay of about Rs 3 trillion, the scheme aims to enhance the quality and reliability of power supply while ensuring the long-term sustainability of discoms. The scheme targets a reduction in aggregate technical and commercial (AT&C) losses to 12-15 per cent and aims to eliminate the gap between the average cost of supply and the average revenue realised (ACS-ARR), thereby improving the financial health of the distribution sector.
Several measures have been introduced under the RDSS to accelerate smart meter deployment and improve project bankability. Projects are being implemented under the design-build-finance-own-operate-transfer model, with performance-linked annuities converting capital expenditure into operational expenditure commitments for discoms. Standard bidding documents have been introduced to streamline procurement, while central grants support project costs. A direct debit facility framework has also been established to strengthen payment security and enhance investor confidence.
Progress under the RDSS
With sustained efforts by the central and state governments and the implementation of various reform measures, the operational and financial performance of discoms has improved significantly. AT&C losses declined from 21.91 per cent in FY 2020-21 to 15.04 per cent in FY 2024-25, while the gap between the ACS and ARR narrowed from Re 0.69 per kWh to Re 0.06 per kWh. Meanwhile, the average daily power supply improved to 22.6 hours in rural areas and 23.4 hours in urban areas in FY 2024-25. Further, billing efficiency at the national level has improved from 84.08 per cent in FY 2021 to 87.59 per cent in FY 2025, and collection efficiency has improved from 92.9 per cent in FY 2021 to 97 per cent in FY 2025.
Sanctions and disbursal
In terms of sanctions and disbursals, as per the RDSS portal (accessed on June 18, 2026), the total sanctioned cost under the RDSS stands at Rs 2,835.45 billion. Of this, Rs 1,306.63 billion has been allocated for smart metering works, while Rs 1,503.49 billion has been earmarked for loss reduction works. The total gross budgetary support (GBS) under the scheme amounts to Rs 1,213.27 billion, with Rs 244.33 billion allocated for smart metering and Rs 955.87 billion for loss reduction works. So far, Rs 346.95 billion of the GBS has been released, comprising Rs 19.37 billion for smart metering works and Rs 327.58 billion for loss reduction works.
Smart metering
As per the RDSS portal (accessed on June 18, 2026), around 195.83 million smart consumer meters have been sanctioned, of which 123.5 million (63 per cent) have been awarded. Progress has been slower than expected, with only 52.56 million (27 per cent) installed and communicating so far.
In addition, about 5.25 million distribution transformer meters have been sanctioned, with 4.89 million (93 per cent) awarded and 1.73 million (33 per cent) installed and communicating. A total of 195,952 feeder meters have been sanctioned, of which 183,801 (94 per cent) have been awarded and 164,983 (84 per cent) installed and communicating.
A large share of the progress has been concentrated in a few states. Maharashtra, Uttar Pradesh, Bihar, Assam, Rajasthan, Gujarat and Madhya Pradesh have emerged as key markets, with the top five states accounting for nearly 75 per cent of total installations. The pace of implementation has been closely linked to state and utility ownership of the programme. States where utility leadership is actively aligned with project objectives have generally witnessed faster execution.
Loss reduction
There has been moderate progress under the loss reduction component of the RDSS, particularly in the installation of high tension (HT) lines, low tension (LT) lines and distribution transformers. As per the RDSS dashboard, the overall financial and physical progress under this component stands at 34.27 per cent and 41.93 per cent respectively.
Component-wise progress indicates that a total of 922,116 ckt km of LT lines have been sanctioned, of which 856,100 ckt km has been awarded and 569,512 ckt km installed. For HT lines, 801,400 ckt km has been sanctioned, 756,275 ckt km awarded and 471,624 ckt km installed. Under the distribution transformer segment, 589,333 units have been sanctioned, 552,725 units awarded and 192,293 units installed. Further, under the substation segment, 3,996 units have been sanctioned, 3,871 units awarded and 1,095 units installed.
Emerging trends under the RDSS
The focus of the RDSS is gradually evolving from large-scale smart meter deployment to the broader digitalisation and modernisation of distribution networks. While smart metering remains the cornerstone of the programme, utilities are increasingly leveraging the digital infrastructure created under the RDSS to improve network visibility, operational efficiency and consumer service delivery.
A key trend is the adoption of advanced metering infrastructure, which enables two-way communication between utilities and consumers and supports functionalities such as remote meter reading, prepaid billing, remote connect-disconnect, outage management and real-time consumption monitoring. As smart meter installations scale up across states, utilities are also beginning to utilise the large volumes of data generated through these systems for more informed decision-making.
Another emerging trend is the use of artificial intelligence (AI) and advanced analytics for demand forecasting, load management, power theft detection and predictive maintenance of network assets. Several utilities are exploring AI-driven solutions to improve operational planning and optimise network performance. In parallel, digital twin technology is gaining traction as a tool for creating virtual models of distribution networks, enabling utilities to simulate network behaviour under different operating conditions, assess system constraints and improve outage management.
Geotagging and geographic information system-based mapping of distribution assets have also emerged as important focus areas under the RDSS. Utilities are increasingly undertaking consumer indexing and digital mapping of feeders, transformers, poles and service connections to improve energy accounting, identify loss pockets and support asset management.
Cybersecurity is another area receiving increased attention as utilities seek to secure expanding digital infrastructure and protect consumer data. Looking ahead, the digital ecosystem being developed under the RDSS is expected to facilitate the integration of distributed energy resources such as rooftop solar systems, battery energy storage systems and electric vehicle charging infrastructure.
The way forward
As the RDSS progresses, the focus is expected to move beyond smart meter installations towards achieving measurable improvements in utility operations and financial performance. While significant progress has been made, accelerating implementation in lagging states and expediting the award and execution of remaining projects will be important to maintain momentum. Utilities and implementing agencies will need to focus on large-scale deployment, last-mile installations and timely resolution of operational challenges to ensure successful project completion.
At the same time, the growing deployment of smart meters is expected to generate valuable data that can help discoms improve energy accounting, reduce losses, optimise network operations and enhance service delivery.
Consumer engagement will remain a key priority, with greater awareness of the benefits of smart metering helping to improve acceptance and participation. Going forward, the success of the RDSS will depend on continued policy support, effective coordination among stakeholders and sustained efforts by utilities to leverage digital technologies.
Based on a presentation by Ashok Rathore, Chief General Manager, PFC Limited, at a recent Power Line conference
