India, May 20 -- Privatising electricity distribution companies in 11 Indian states could cut their combined fiscal deficit from 3.5% to 3% of GSDP.

AT&C losses and ACS-ARR gap have improved.

But many public DISCOMs remain fragile, with high power purchase costs, ageing networks and subsidy burdens.

A new report by SBICAPS has argued that privatisation of electricity distribution companies, or DISCOMs, could help 11 Indian states reduce their fiscal deficits and improve the operational health of the power sector, even as it warned that many public utilities remain financially fragile despite recent gains.

The report, DISCOM Privatisation: A Path to Achieve State Fiscal Targets, showed aggregate technical and commercial, or AT&C, losse...