Former NITI Aayog CEO Amitabh Kant has called for an “AI revolution” to transform India's electricity distribution companies (DISCOMs), asserting that energy independence hinges on radically reforming these loss-making entities. Kant emphasized that the recent Hormuz crisis served as a stark reminder of India's vulnerability due to its reliance on imported fossil fuels.
Hormuz Crisis Highlights Energy Security Needs
Speaking on July 9, 2026, Kant stated, “The Hormuz crisis was a wake-up call. Energy independence is paramount, and electrification, renewables, and storage are the way forward. But India cannot get there until we radically overhaul our loss-making DISCOMs.” His remarks come amidst renewed conflict in West Asia, which has intensified concerns over the Strait of Hormuz, a critical waterway for India, which imports approximately 87 percent of its crude oil.
AI's Potential to Revolutionize DISCOMs
Kant championed artificial intelligence as a pivotal tool for modernizing India's power distribution network. He believes AI can drastically improve operational efficiency and significantly reduce Aggregate Technical and Commercial (AT&C) losses, which have long plagued the sector.
“AI gives us a once-in-a-lifetime shot at this: predictive maintenance, lower AT&C losses, smarter capex planning,” Kant noted.
He specifically endorsed Pravāh, a Bengaluru-based startup founded by Mohak Mangal and Dhruv Suri, for its frontier AI models designed for the energy sector. Kant urged DISCOMs to engage with such innovators, stating, “Give them a year inside any DISCOM, and they will transform it.”
Challenges in Public Procurement
Despite the potential of AI startups, Kant highlighted a significant hurdle: government procurement rules. He argued that the current L1 (lowest bidder) tender system stifles innovation and prevents promising startups from contributing their solutions. “We need more founders across the energy stack building such bold solutions. But the government must also fix public procurement; with L1 tenders, startups will never make it,” he cautioned.
DISCOM Financials Show Mixed Progress
India's power distribution companies have historically struggled with substantial financial losses. However, the Ministry of Power reported a collective profit of Rs 2,701 crore in FY25, a notable turnaround from losses of Rs 25,553 crore in FY24 and Rs 67,962 crore in FY14.
Despite this improvement, deep-seated structural challenges persist. A September 2025 study by Prayas (Energy Group) for the Sixteenth Finance Commission estimated accumulated DISCOM losses at a staggering Rs 7.08 lakh crore, growing at an average annual rate of 8 percent. The study identified rising working capital borrowings, high interest costs, and persistent operational inefficiencies as key factors contributing to the sector's ongoing financial stress, underscoring the urgent need for comprehensive, long-term reforms.