Elephant in the room: implications of subsidy practices on DISCOM finances

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. The report documents the subsidy design and payment practices across six states in India, namely- Gujarat, Haryana, Punjab, Tamil Nadu, Uttar Pradesh, and Bihar. It highlights various state specific trends and focuses on the multiple dimensions of the impact of subsidy payments on DISCOM finances. The focus of the report is not to document state specific realities in detail but to highlight state-level observations to point to larger trends in the sector.