UPSC Prelims Practice Questions — POWER DISTRIBUTION UTILITIES RECORD POSITIVE PAT AFTER YEARS OF LOSSES; THIS MARKS A NEW CHAPTER, SAYS POWER MINISTER

Q1. The collective positive Profit After Tax of ₹2,701 crore recorded by India's power distribution utilities in FY 2024-25 was compiled and announced by which one of the following Union Ministries?

• A. Ministry of Power
• B. Ministry of Finance
• C. Ministry of New and Renewable Energy
• D. Ministry of Heavy Industries

Q2. In the context of power distribution utilities, the term 'AT&C losses', which fell from 21.91% in FY 2020-21 to 16.16% in FY 2024-25, is best described as:

• A. The combined technical (network) losses and commercial (billing and collection) losses of a distribution utility
• B. The gap between the average cost of supply and the average revenue realised per unit
• C. Losses arising solely from power theft and pilferage in the distribution network
• D. The shortfall between electricity generated and electricity scheduled for despatch

Q3. The Revamped Distribution Sector Scheme (RDSS), the latest in the chronology of distribution-sector reform schemes, is scheduled to be implemented over a period of how many financial years?

• A. Four financial years
• B. Five financial years
• C. Six financial years
• D. Seven financial years

Q4. Under the UDAY scheme launched in 2015, the single largest component of the debt-restructuring package required participating State governments to take over what proportion of their DISCOMs' outstanding debt?

• A. 50 per cent
• B. 60 per cent
• C. 75 per cent
• D. 100 per cent

Q5. With reference to the Ujwal DISCOM Assurance Yojana (UDAY), consider the following statements: 1. UDAY was launched in November 2015 for the financial turnaround of power distribution companies. 2. The portion of DISCOM debt not taken over by the States was to be issued as bonds by the DISCOMs themselves. 3. One objective of UDAY was to reduce AT&C losses and eliminate the gap between Average Cost of Supply and Average Revenue Realised. 4. UDAY mandated the compulsory privatisation of all State-owned DISCOMs within three years. Which of the above is/are correctly identified as features of UDAY?

1. UDAY was launched in November 2015 for the financial turnaround of power distribution companies.
2. The portion of DISCOM debt not taken over by the States was to be issued as bonds by the DISCOMs themselves.
3. One objective of UDAY was to reduce AT&C losses and eliminate the ACS-ARR gap.
4. UDAY mandated the compulsory privatisation of all State-owned DISCOMs within three years.

• A. 1, 2 and 3
• B. 1 and 4
• C. 2 and 3 only
• D. 1, 2 and 4

Q6. Which one of the following correctly identifies the entities designated as the nodal agencies for facilitating the implementation of the Revamped Distribution Sector Scheme (RDSS)?

• A. REC Limited and Power Finance Corporation (PFC)
• B. NTPC Limited and Power Grid Corporation of India
• C. Solar Energy Corporation of India (SECI) and NHPC
• D. Central Electricity Authority (CEA) and NTPC

Q7. With reference to the Revamped Distribution Sector Scheme (RDSS), consider the following statements: 1. It has an outlay of ₹3,03,758 crore, including a Government Budgetary Support of ₹97,631 crore. 2. It is being implemented over the period FY 2021-22 to FY 2025-26. 3. Part A of the scheme covers prepaid smart metering, system metering and distribution infrastructure works. 4. It aims to raise the pan-India AT&C losses to 25-30 per cent by the end of the scheme period. Which of the statements given above is/are NOT correct?

1. It has an outlay of ₹3,03,758 crore, including a Government Budgetary Support of ₹97,631 crore.
2. It is being implemented over the period FY 2021-22 to FY 2025-26.
3. Part A of the scheme covers prepaid smart metering, system metering and distribution infrastructure works.
4. It aims to raise the pan-India AT&C losses to 25-30 per cent by the end of the scheme period.

• A. 1 and 2
• B. 3 only
• C. 2 and 3
• D. 4 only

Q8. With reference to the Electricity Act, 2003 and the restructuring of the power sector, consider the following statements: 1. The Act provided for the unbundling of State Electricity Boards into separate generation, transmission and distribution entities. 2. State Electricity Boards were originally constituted under the Electricity (Supply) Act, 1948. 3. In the unbundled structure, 'GENCO' denotes the generation company and 'TRANSCO' the transmission company. 4. The Act made the unbundling of every State Electricity Board legally mandatory and non-negotiable. Which of the above is/are correctly identified?

1. The Act provided for the unbundling of State Electricity Boards into separate generation, transmission and distribution entities.
2. State Electricity Boards were originally constituted under the Electricity (Supply) Act, 1948.
3. In the unbundled structure, 'GENCO' denotes the generation company and 'TRANSCO' the transmission company.
4. The Act made the unbundling of every State Electricity Board legally mandatory and non-negotiable.

• A. 1, 2 and 3
• B. 2 and 4 only
• C. 1 and 3 only
• D. 1, 2, 3 and 4

Q9. Under the Seventh Schedule of the Constitution of India, 'Electricity' is enumerated as a subject in which one of the following?

• A. Entry 38 of the Concurrent List (List III)
• B. Entry 38 of the State List (List II)
• C. Entry 43 of the Union List (List I)
• D. Entry 17 of the State List (List II)

Q10. The Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERCs), which regulate tariffs across the electricity value chain, are statutory bodies constituted under which one of the following?

• A. The Electricity Act, 2003
• B. The Electricity (Supply) Act, 1948
• C. The Energy Conservation Act, 2001
• D. The Electricity Regulatory Commissions Act, 1998

Q11. In the context of the recent turnaround announced for the power distribution sector, consider the following statements: 1. The collective PAT of distribution utilities improved from a loss of ₹25,553 crore in FY 2023-24 to a positive ₹2,701 crore in FY 2024-25. 2. Outstanding dues of distribution utilities to generating companies fell from about ₹1,39,947 crore in 2022 to about ₹4,927 crore by January 2026. 3. The average payment cycle of distribution utilities lengthened from 113 days in FY 2020-21 to 178 days in FY 2024-25. Which of the statements given above is/are correct?

1. The collective PAT of distribution utilities improved from a loss of ₹25,553 crore in FY 2023-24 to a positive ₹2,701 crore in FY 2024-25.
2. Outstanding dues of distribution utilities to generating companies fell from about ₹1,39,947 crore in 2022 to about ₹4,927 crore by January 2026.
3. The average payment cycle of distribution utilities lengthened from 113 days in FY 2020-21 to 178 days in FY 2024-25.

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1, 2 and 3