Budget 2025: Discoms may take dose of reforms to turn healthy

The government is seeking to improve the financial health of power discomes with the budget proposing to incentivise them for undertaking reforms. It will also push to augment intra-state transmission infrastructure.

The government's dedication to improving the financial and operational stability of electricity distribution companies, coupled with incentives for enhancing intra-state transmission capacity, will boost the efficiency of the power sector, power minister Manohar Lal said.

States will be allowed an additional borrowing of 0.5% of gross state domestic product (GSDP), depending on the reforms they make in the distribution sector.


This is a positive for the power sector, but "implementation remains key", said Vikram V, vice-president and co-group head at ratings firm ICRA.

Distribution gains importance as the government plans to support clean technology for domestic value addition and build an ecosystem for solar cells, electrolysers, wind turbines, very high-voltage transmission equipment and grid-scale batteries. "These policy measures will drive capacity expansion, fortify supply chains, and position India as a global leader in clean energy manufacturing," said Amit Paithankar, chief executive at Waaree Energies Ltd that makes solar modules.