Unpacking India’s Electricity Subsidies: Reporting, transparency, and efficacy

Direct tariff electricity subsidies in India rose 32% between FY 2016 and FY 2019, reaching INR 110,391 crore in FY 2019. The report finds that the Ujjwal DISCOM Assurance Yojana (UDAY) scheme has largely failed to improve the financial health of distribution companies (DISCOMs), as 24 of 31 states and union territories reported revenue gaps in FY 2019 and only 6 met the target of reducing aggregate technical and commercial (AT&C) losses to 15%. Furthermore, no state adhered to the National Tariff Policy's target range for billing consumers relative to the average cost of supply. Subsidy allocation is heavily skewed, with agricultural consumers receiving 75% of total subsidies, while transparency remains low, with only 13 states and union territories clearly reporting subsidy data.

• Direct tariff electricity subsidies from state governments increased by 32% from FY 2016 to FY 2019, totaling INR 110,391 crore (USD 14.96 billion) in FY 2019, which represents 4.52% of the total budget outlay and 37.36% of the budget for defence expenditure for that year.
• The Ujjwal DISCOM Assurance Yojana (UDAY) scheme has not achieved its financial goals for most jurisdictions: 24 of 31 states and union territories had a revenue gap in FY 2019, and only 6 of 31 met the target of reducing aggregate technical and commercial (AT&C) losses to 15% by FY 2019.
• National tariff policy targets are not being met; no state or union territory billed consumers within the target range of +/-20% of the average cost of supply (ACoS). In 12 jurisdictions, industrial and commercial users were charged over 120% of ACoS, while domestic and agricultural users were charged less than 80%.
• Subsidy distribution is dominated by the agricultural sector, which received 75% of total subsidies, followed by domestic consumers (20%) and industries (4%). Only Delhi, Haryana, Tamil Nadu, and Uttar Pradesh have specified support for a fixed number of units.
• Data transparency is poor, with only 13 states and union territories clearly reporting subsidy data and only seven reporting by category. Additionally, 15 jurisdictions show significant data variations between Power Finance Corporation (PFC) reports and state documentation.

APA

Sharma,, P. A. V. N. (2020). Unpacking India’s Electricity Subsidies: Reporting, transparency, and efficacy. International Institute for Sustainable Development. https://www.iisd.org/publications/india-electricity-subsidies

Chicago

Sharma,, Prateek Aggarwal,Anjali Viswamohanan,Danwant Narayanaswamy,Shruti. Unpacking India’s Electricity Subsidies: Reporting, transparency, and efficacy. International Institute for Sustainable Development, 2020. https://www.iisd.org/publications/india-electricity-subsidies.

Wikipedia

{{cite report |last1=Sharma, |first1=Prateek Aggarwal,Anjali Viswamohanan,Danwant Narayanaswamy,Shruti |title=Unpacking India’s Electricity Subsidies: Reporting, transparency, and efficacy |publisher=International Institute for Sustainable Development |date=16 December 2020 |url=https://www.iisd.org/publications/india-electricity-subsidies |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sharma2020unpacking, author = {Sharma,, Prateek Aggarwal,Anjali Viswamohanan,Danwant Narayanaswamy,Shruti}, title = {{Unpacking India’s Electricity Subsidies: Reporting, transparency, and efficacy}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = dec, url = {https://www.iisd.org/publications/india-electricity-subsidies}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }