UP Government Moves Ahead With Discom Privatisation To Boost Power Sector Efficiency

The Uttar Pradesh government has approved the privatisation of two major power distribution companies (DISCOMs), marking a historic shift in the state’s electricity sector. Chief Minister Yogi Adityanath has cleared the proposal, and the Energy Department has instructed UP Power Corporation Limited to implement it. This move will impact over 40 districts and lay the foundation for a new service-oriented work culture.

Despite opposition from employee unions and political parties, the government has assured that the interests of existing employees will be protected. The workers will be integrated into the new system without loss of service or rights.

Boost for Rural and Semi-Urban Electrification

The biggest gains from privatisation are expected in rural and semi-urban areas, where electricity supply is often unreliable. The entry of private firms is likely to improve grievance redressal, build public trust, and modernise services. Poor service quality and weak accountability have plagued these regions for decades. This decision aims to transform that scenario permanently.

Tackling Financial Losses and Technical Inefficiency

UP’s government-run discoms have long faced financial strain due to high AT&C losses and poor revenue recovery. These problems hurt both the state economy and consumer satisfaction. Delhi’s discom model offers a successful example. After its 2002 privatisation, Delhi’s AT&C losses dropped from nearly 57% to below 7%. In contrast, the national average remains above 15%. Private companies bring efficiency, accountability, and a customer-first approach to billing, metering, and collections.

A Necessary Step, Not Just a Reform

The government sees privatisation not as a short-term fix, but as a structural change. Cities like Delhi, Mumbai, Ahmedabad, and Bhubaneswar have already shown how private discoms can reduce theft, improve service, and raise satisfaction levels. UP plans to replicate these reforms through smart metering, grid modernisation, and employee training. The goal is not just efficiency, but also social equity through better and fairer access to electricity.

This bold decision prioritises long-term public interest over political concerns. It reflects a shift towards energy as a right, not just a service. The change signals the beginning of a stable, modern, and consumer-driven power sector in Uttar Pradesh.

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