CAG starts major audit of 39 power discoms to check service and short-term buying

The Comptroller and Auditor General of India has begun a large-scale audit of 39 state-owned power distribution companies and five departmental undertakings across the country. The ongoing review covers performance between the 2021 and 2026 financial years, leaving privately owned distribution firms outside its scope.

Audit Focus Areas

The review started in July and is expected to finish by the middle of the next financial year. Auditors are examining both traditional operational markers like billing efficiency and technical losses alongside financial stability. Public sector distribution firms currently carry accumulated losses of 6.77 lakh crore rupees and borrowings of 7.11 lakh crore rupees. Officials note that revenue grants have grown more than four times faster than capital grants, meaning government support often goes toward covering debt and losses rather than new investments.

Consumer Surveys And Power Trading

For the first time, auditors are directly engaging with about 10,000 electricity users across domestic, industrial, and agricultural groups to evaluate service quality and power supply reliability. Another major point of scrutiny is short-term power procurement. According to officials, short-term power buying has grown from 7 to 8 percent five years ago to nearly 14 percent today, with power exchanges accounting for over 56 percent of those deals.

Context

Distribution companies form the direct link between the power sector and end users, making their financial health vital for the entire energy market. The current audit is the first phase of a broader plan by the apex auditor to examine all major energy segments, including generation, transmission, and renewable energy, over the coming years.