Policy Update
Elenora Tu’u
Background
India’s Ministry of Power (MoP) stands at a pivotal crossroad—balancing an ambitious scaling of renewable energy and electrification with the urgent necessity to reform entrenched financial and infrastructural bottlenecks. Its ability to drive DISCOM reform, grid modernization, and storage uptake will define whether India achieves its 2030 clean energy goals and sets the stage for a 2047 decarbonized grid.
The Ministry of Power established on 2nd of July 1992, oversees India’s electricity sector which includes spanning generation, distribution, transmission, regulation and rural electrification, operating from Shram Sahki Bhawan, New Delhi. Its roots go back to the Department of Power established under the Ministry of Energy, Coal and Non-Conventional Energy Sources, later transitioned off to gain responsibility as MoP during the time of corporate sector and broader economic reforms-initiated post – 1991.
Key miles include electrification drives like Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), which was launched in 2015, successfully connecting over 597,000 villages, seeing nearly a 100% coverage of electrification nationwide by 2018. Moreover, to facilitate the effective implementation, bodies like Bureau of Energy and Efficiency (BEE) and Central Regulatory Bodies like Central Electricity Regulatory Commission or CERC were established to oversee and regulate energy efficiency and policy.
Policies and Schemes such as National Electricity Plan (NEP), BESS, and RDSS are few to name under MoP.
Source: Government of India_Mop: https://powermin.gov.in/en/content/overview
Key Functions
- Policy formulation: MoP develops strategic frameworks like NEP-National Electricity Plan 2022-23, energy mix, projecting capacity needs and mandating 600GW renewables, emphasizing solar, hydro, wind, batteries and pump storage.
- Rural Electrification: continuation and oversight of Deen Dayal Upadhyaya Gram Jyoti Yojana and Saubhagya – which can be assumed as universal household connections.
- Regulatory oversight: Monitors and coordinates with respective regulators – CERC, making sure of real time grid coordination across all multi-state level systems.
- Transmission and Modernization: Ensures progressive implementation of tech intensive and smart-grid, this includes drones,facts, scada, cybersecurity as per DristiIAS-2021 recommendation from task force.
The recent meeting between India-USA on critical emerging technology and MoU on Semiconductor supply chain highlights India’s way on a progressive foot ahead during the 13th ministerial level meeting in Washington D.C. https://www.drishtiias.com/daily-updates/daily-news-analysis/india-us-commercial-dialogue
- Energy and Clean Tech: Through BEE initiative – it supports UJALA that is a LED distribution. Which is a super efficient programme and carbon crediting frameworks established to support the progressive coverage under the MoPs mission and goals.
- Storage and Renewable Integration: This integration mechanism rolls out BESS – Battery Energy Storage Systems, storage incentives and pumped storage policies aimed at achieving 47 GW BESS by 2032.
Structure of the organization
The Ministry of Power supervises CBD-led policy coordination along with managers of CPSU (Central Public Sector Undertakings), such as Grid Corp, NTPC, PFC, REC, and CPRI. The Ministry directly or indirectly liaises with all state DISCIOMS to ensure operationalization of national schemes within the guidelines of implemented regulatory frameworks.
Performance Assessment
- Capacity and Clean Energy Targets: India so far recorded added 30GW of clean energy in fiscal 2024-25, which is enough to power up to 18 million homes; and roughly a 170GW of projects are in the pipeline towards the 500GW clean target by 2030 as per AP news reports – AP News
- Also installed, a capacity reached 468 GW as of March 2025; renewable energy – includes hydro nuclear, which forms a 46.3% as per PMF and IAS reports.
- Renewable needed by 2029-2030 as per Financial Times. Moreover, non-fossil capacity stands at an assumed 45%, but actual generation as AP news records at 24%; whereas coal still accounts for 75% of the electricity generation – AP News.
- Loss Reduction and Grid Readability: According to Power Line Magazine peak and energy shortfalls are improving, seen in 2023 – 2024 saw deficits of -1.4% and 0.3% respectively. Additionally, IAS and Power Line Magazine highlights that transmission and distribution losses have also declined from a whooping 34% in 2001 to 2002 to a 17.7% in 2022-2023, a big thanks to RDSS on the progress.
- Integration and Reality, however the progress bottleneck remains, it is noted that roughly 82GWh is needed by 2026-2027 which is against 336GWh that is.
The annual growth in power generation during recent years is as under.
Source: Government of India MoP: https://powermin.gov.in/en/content/overview
Infrastructure Development, Financial and Distribution Reforms.
By far NEP has envisioned 191,000 – kilometer transmission lines and a 1,270 GVA transformer capacity by 2032 according to PW Only IAS. Perhaps the smart grid pilot highlights the vision by NEP,such as Puducherry 2012, which are being scaled, albeit it’s even distribution and progress.
Insight on financials – despite some fiscal relief, financial stress persists given the population and increasing number of households, corporate spaces and private sector investment needs demanding the government’s attention for reforms and scalability mechanisms. Fiscal year 2021 saw a Rs.1.3trillion cash -adjusted losses, a Rs.795 billion subsidy delays subject to governments attention redressal and a Rs.2.73 trillion owed to generators according to Power Line Magazine.
Moreover, DISCOMs continue to incur losses, an average AT & C lose roughly 27%, it is to be noted also that almost 40% for some states – according to a dristi ias report. Through RDSS and UDAY, almost around $60 billion has been directed since 2015 to clear debts, promoting smart metering narrowing cost gap revenue as IMF eLibrary highlights. It should be noted that scalable financing and infrastructure strengthening enhances the capable execution of implemented projects, and schemes under NEPs vision across all states and UTs.
Emerging Challenges.
- Investment Deficit: CPSU clean energy capex notably remains low and private investments are gravitating towards mature technologies over existing system level innovation.
- Overcapacity and Idle Assets: There is required curtailment for thermal generation excess. Over capacity or idle assets without effect demand – side measures, pile up losses or plant idle.
- Political Interference and DISCOM Debt: Cross distribution subsidies, high distribution losses and increase in political reluctance to reforms and tariff revision persist, this delays smart meter adoption threatening crucial sector’s function and productivity, IMF eLibrary provides insights on challenges subject to political interference.
- Lastly import and supply chain risk: India’s heavy reliance imports expose the nations external fragility, threatening self-reliance goals according to a research article published by MDPI – Investigation on Current and Prospective Energy Transition Scenarios in Indian Landscape Using Integrated SWOT-MCDA Methodology https://www.mdpi.com/1595750
Way forward
| Challenge | Suggestion |
| DISCOM Reform & Tariff Rationalization | Continue UDAY/RDSS efforts, enforce smart meters, reduce AT&C losses. Gradually phase out cross-subsidization; shift to cost-reflective tariffs to make DISCOMs creditworthy, ensuring timely payments to generators. |
| Solar + Storage Integration | Scale up BESS and pumped storage per NEP; expedite PLI incentives, global mineral partnerships, and domestic gigafactory set-up—from current ~82 GWh to ~336 GWh by 2030.Explore alternative storage (e.g., flow batteries, green hydrogen, long-duration storage). |
| Grid Modernization & Flexibility | Roll out smart grid functionalities nationwide—real-time monitoring, drones, cybersecurity, FACTS—to bolster resilience Financial Times. Strengthen interstate coordination and real-time dispatch through SCADA enhancements. |
| Regulatory & Financial Innovation | Empower regulators to enforce performance-based incentives (e.g., carbon credit trading, firm power procurement). Facilitate green financing, risk guarantees—e.g., BEE’s partial risk fund—and crowd in private investment in energy storage and flexibility platforms. |
| Just & Inclusive Transition | Ensure rural/urban communities benefit from renewable infrastructure initiatives. Strengthen welfare schemes like UJALA, microgrids, EV charging infrastructure—integrated with solar & storage for localized stability. |
Long-Term Strategic Planning.
Future-proof grid for EV, industrial electrification, and green hydrogen via Vision 2047. Align with Aatmanirbhar Bharat and Energy Vision 2047 to target a 90% clean grid by 2047 jpia.princeton.edu. Additionally, increase pump hydro, seasonal storage, micro grids and expand and invest in research in grid scale innovation.
Critical Opinion
While the Ministry of Power (MoP) has delivered significant gains in electrification across the nation, through renewable capacity and modern schemes, its impact remains constrained by entrenched structural flaws. For instance as highlighted in performance on financials, setbacks require schemes or policies that ensure budget equity-DISCOM debt remains a central drag back, even with fiscal support. In addition, persistent tariff distortions tether policy to sub -optimal outcomes.
Moreover, transmission and storage inflexibilities continue to dampen the uptake of solar and wind – It should be noted that building renewables without consumer-rate grid upgrades is akin to planting seeds without periodic irrigation outflows. Although progressive strides were made with several policies, such as National Electricity Plan, Revamped Distribution Sector Scheme, and Battery Energy Storage System incentives, pumped storage guidelines highlight a point in the right direction, however their implementation is slow due to structural flaws and financial setbacks as highlighted above.
To reach scalable efforts, The Ministry of Power’s role in aggregating central efforts and enforcing timelines will define whether India can pivot decisively before climate and energy security deadlines tighten.
References
- Policy frameworks: NEP, pumped storage, carbon trading
- Pathi, S. (2024, April 9). India, a major user of coal power, is making large gains in clean energy adoption. https://apnews.com/article/ffaaa2446482f0b96516045528ed690b
- Pradhan, K. (2023, May 5). Unlocking India’s energy transition: Opportunities, challenges, and the role of cross-subsidies. Journal of Public and International Affairs, Princeton School of Public and International Affairs. https://jpia.princeton.edu/news/unlocking-india%E2%80%99s-energy-transition-opportunities-challenges-and-role-cross-subsidies
- Drishti IAS. (2023, March 14). Smart grid technology and India’s energy landscape. https://www.drishtiias.com/current-affairs-news-analysis-editorials/news-analysis/14-03-2023
- PMF IAS. (2025, June 5). Current affairs: Energy sector roadmap. https://www.pmfias.com/current-affairs-june-05-2025/
- Rural electrification & installed capacity stats
- DISCOM debt, UDAY, loss metrics
- Smart grid & transmission upgrades jpia.princeton.edu
About the contributor:
Elenora Tu’u is an undergraduate student specializing in Politics and Public Policy. This article is published as part of her course work with the IMPRI Impact and Policy Research Institute.
Acknowledgement:
The author sincerely thanks Aasthaba Jadeja and IMPRI fellows for their valuable contribution.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.
Read more at IMPRI:
Empowering Citizens Digitally: The Role of the National Portal of India
Beti Bachao Beti Padhao 2015: Hope in Headlines or Change on Ground?
