The T&D Losses and AT&C Losses Inefficient planning, lack of investments, inadequate maintenance, low plant load factor, high transmission and distribution losses, erratic supply to consumers and other issues resulted in pathetic services and perennial financial losses. India’s power distribution segment is plagued by two types of losses:- Transmission & Distribution (T&D) Losses: These losses are due to inefficiency in transmission sector and has mainly occurred due to feeder metering in the past. Please note that a substantial portion of T&D loss, including theft of electricity gets attributed to agricultural consumption. Aggregate technical and commercial (AT&C) losses: These losses refer to the difference between units input into the system and the units for which the payment is collected. Here we should note that while the T&D Loss do not capture losses on account of non-realisation of payments. As the T&D loss was not able to capture all the losses in the net work, concept of Aggregate Technical and Commercial (AT&C) loss was introduced. AT&C loss captures technical as well as commercial losses in the network and is a true indicator of total losses in the system. AT&C Loss is the clearest measure of overall efficiency of the distribution business as it measures technical as well as commercial losses. Thus, the reasons of the T&D and AT&C losses are: Power Theft Non-billing Incorrect billing Inefficiency in collection Leakage in transmission and distribution system Lack of investment The fraction of losses is very high. The T&D losses have been consistently on higher side, and reached to the level of 32.86% in the year 2000-01. Overall AT&C loss was 38.86% in 2001-02 At present (2012) the all-India T&D losses are 24.15 per cent. In 2009-10, the average AT&C loss for utilities selling directly to consumers stood at 27.2%. Further, one more issue with the power distribution companies is the mismatch between tariffs and cost of generating power. Poor Financial Conditions of SEBs The very high fraction of losses have plunged the financial health of state electricity boards in a distressed state. The high losses affect revenue, insufficient or no revision in tariff is another major factor that has affected performance. Moreover, the distribution arms of SEBs succumb to political pressures and are not able to do tariff revisions. Thus, politicians also have kept the power reforms hijacked. The fallout of the poor financial status of the SEBs is that for the discoms, it has become increasingly difficult to service their debts. So, alarm bells started ringing in the banking sector and most lenders became very cautious in extending loans to the power sector as a whole. Then, the finance ministry also asked