Union Budget 2026: Power Sector Reforms to Focus on Discom Privatization, Smart Meters

• Union Budget 2026 is expected to prioritize electricity distribution reforms, including discom privatization and RDSS Phase-II.
• Power distribution companies (discoms) collectively reported a profit of ₹2,701 crore in FY25, their first in years, though challenges persist.
• Aggregate Technical and Commercial (AT&C) losses declined from 21.91% in FY21 to 16.16% in FY25, showing operational improvements.
• Despite overall improvement, significant inter-state disparities and a ₹6 trillion debt burden keep privatization on the agenda.
• RDSS Phase-II will likely include stricter performance conditions and a strong focus on smart meter rollout to enhance financial sustainability.

Why It Matters: Budget 2026 aims to overhaul the power sector through discom privatization, advanced smart metering, and stricter RDSS norms.