CAG Launches Nationwide Audit of Power Discoms Focusing on Consumer Satisfaction and Finances

UPDATE - follow-up to CAG begins nationwide audit of 39 power discoms, to examine consumer satisfaction and short-term power procurement: The Comptroller and Auditor General of India has started a broad audit of 39 state-owned power distribution companies and five departmental undertakings to check their operational and financial performance.

Audit Scope And Details

The ongoing audit covers performance between the financial years 2021 and 2026, though privately owned discoms are left out of this exercise. The work started in July and should finish by the middle of the next financial year. According to The Hindu - Business, subsequent phases will look at transmission, generation, renewable energy, and the Revamped Distribution Sector Scheme, assessing each segment over the preceding five years. The State Commercial Audit division is handling the process, which forms part of an integrated power sector plan expected to draw investments of Rs 50 lakh crore by 2032 and Rs 200 lakh crore by 2047.

Financial Pressures

Public sector discoms face heavy financial stress with accumulated losses of Rs 6.77 lakh crore and borrowings of Rs 7.11 lakh crore. Revenue grants have grown more than four times faster than capital grants, meaning government support mostly goes toward paying off losses, debt, and interest rather than new investments. Auditors will check standard operational parameters like Aggregate Technical and Commercial losses, billing efficiency, and collection efficiency alongside overall financial sustainability.

Consumer Focus And Trading

A major part of the audit involves checking consumer satisfaction regarding power quality. Auditors plan to survey around 10,000 consumers across domestic, industrial, commercial, and agricultural categories, engaging directly with consumers, local experts, and influential groups. Another key focus area is short-term power procurement and trading. Officials noted that short-term power purchases have grown from 7-8% to roughly 14% of the total purchase basket over the past five years, with power exchanges making up more than 56% of those transactions, raising concerns about demand forecasting and purchase costs affecting end consumers.

Context

This follows an earlier report, covered earlier on 13 Nov 2026: 'CAG begins nationwide audit of 39 power discoms, to examine consumer satisfaction and short-term power procurement'. Power distribution companies serve as the direct link between electricity generators and everyday users, making their financial stability vital for the entire economy. Independent state auditors regularly review public sector undertakings to ensure proper use of public funds and efficient service delivery.