India's power sector needs financial reforms, transparent tariffs, and digital tools to improve liquidity and reduce stress, says CEA chairperson.

Financial reforms and transparent tariff policies are vital for India’s power distribution companies, says Central Electricity Authority Chairperson Ghanshyam Prasad. He stressed the need for consistent implementation of the Fuel and Power Purchase Cost Adjustment mechanism to enable monthly tariff updates based on fuel and power costs. Prasad highlighted Gujarat’s success in saving money by selling surplus power on exchanges and Bihar’s use of nearly a crore prepaid smart meters to improve cash flow. He urged expanding prepayment systems across the power sector and modernizing tariff-setting with digital tools and AI to enhance liquidity and reduce systemic stress.