NEW DELHI: With the Centre projecting an investment of Rs 50 lakh crore in power sector in the next six years, by 2032, the CAG has started a special audit of 39 state-run power distribution companies (Discoms) and five other state govt departments for previous five years to identify gaps and give a holistic picture to the govt on policy formulations and prepare an integrated plan for Centre-State investment flows.The central investment flows to this sector alone are estimated to be around Rs 3 lakh crore during the next six years, a senior official said. The first of its kind CAG report will cover 27 states/UTs and its reports will be tabled separately in each of these assemblies. The audit framework has been prepared with the help of IIM Ahmedabad and after consultations with all power secretaries of state and central departments earlier this year.This time, the federal auditor is also conducting a consumer satisfaction survey of at least 10,000 users to address grievances of electricity consumers given that any stress on Discoms ultimately affect the reliability and affordability of power supply and spills over into state finances, sources said.The audit is likely to be completed by May 2027 and to be followed with four other similar audits: a special audit next year on transmission companies (Transcos), followed by an audit of renewables and generation companies, and RDSS (revamped distribution sector schemes).“Discoms data indicated that the financial stress is primarily rooted in weaknesses in procurement, demand forecasting, metering, regulatory accounting and consumer service,” the officer pointed out. As of March 2025, about 23 Discoms had losses of Rs 30,000 crore, and 24 Discoms reported negative net worth, with accumulated losses at Rs 3.4 lakh crore.The outstanding debt of these Discoms are Rs 7.3 lakh crore with interest burden Rs 77,653 crore, making any future investment in the power sector vulnerable. “Govt support is increasingly meeting the cost of losses, debt and interest rather than investment,” the official said, adding that the revenue grants have increased from Rs 55,500 crore in 2020-21 to Rs 94,100 crore in 2024-25.The auditor had carried out data analysis of every Discoms at micro and regional level to assess the possible leakages and policy flaws. This will be part of the audit process before being shared with the Centre and states for policy actions.
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The auditor, source said, will also assess the power purchase agreements of states and UTs and evaluate against best industry practices to check their robustness as power trading and pricing ultimately affects the consumers and reliability of the electricity supply in the long run. Electricity theft and transmission and distribution losses will be surveyed in each of these states.
