Electricity revenue subsidies finance 10% to 30% of the revenue required by electricity distribution companies (DISCOMs) in India. Consequently, they have significant impacts not only on the state exchequer but also on DISCOM finances.

Once electricity connections are given, to improve quality of life and promote economic activities, it is essential to ensure sufficient and affordable electricity supply, delivered with good quality, and supported by good service.

The implementation of fuel surcharges has been strongly advocated by the Union Government as a measure to alleviate the financial predicament of DISCOMs. In this context, the report studies the various processes, methodologies, and practices across states to determine, levy, and recover fuel surcharges.