The rollout of smart meters in India has faced significant delays, with less than 10 percent of the planned installations completed due to problems associated with new technology, data validation, and testing. As of February 18, 2025, only about 2.18 crore smart meters have been installed out of the 22.24 crore that have been approved and the 13.80 crore that have been contracted. The complete installation of 25 crore smart meters is slated for a deadline of March 2026.
A senior official from the state government indicated that while states recognize the importance of smart meters for the financial sustainability of Distribution Companies (Discoms) and the growth of the sector, outdated billing systems and cross-subsidization issues have hindered progress. The current infrastructure for billing and IT has become antiquated and is slowing down the project.
Moreover, the official noted that complicated tendering processes, logistical obstacles, necessary infrastructure upgrades, and protests from consumers in certain areas are further complicating and delaying the installation efforts.
In a recent written statement to the Rajya Sabha, Minister of State for Power Shripad Naik acknowledged the ongoing monitoring of smart meter installations by Discoms and efforts to address implementation challenges between Advanced Metering Infrastructure Service Providers (AMISPs) and Discoms. He cited that the delays stem from the introduction of smart meters as a new initiative, along with setbacks related to tender processes and the establishment of direct debit options.
Additional factors contributing to the delay include issues with data collection for consumer indexing and holdups in testing and approvals related to field installations, integration tests, and factory acceptance tests, according to the Minister.
Arindam Ghosh, a Partner for Power Sector Advisory at Nangia & Co, highlighted various obstacles such as slow tendering and contract finalization, complications with new technologies, data validation, and testing challenges. He also pointed out the high costs, inadequate communication infrastructure, and interoperability concerns affecting the process.
For example, Ghosh pointed out that challenges with interoperability have disrupted automatic data collection and complicated system integration, further impeding the speed of deployment across different states.
Shivam Bajaj, the CEO of investment banking firm Avener Capital, noted consumer resistance as a significant factor, particularly when some bills appear to be higher than expected. Smart meters provide accurate measurements of electricity usage, unlike older meters that have been less reliable.
Ghosh stressed that merely installing smart meters will not suffice to reduce Aggregate Technical and Commercial (AT&C) losses; comprehensive improvements in processes and systems are essential.
Implementing both postpaid and prepaid payment options would offer flexibility and could cater to various cultural preferences, which regulators and utility companies should evaluate for optimal effectiveness.
In Assam, for example, the pre-Reforms-Based & Standard Tariff Scheme (RDSS) has allowed consumers to monitor their electricity usage more closely, leading to a reduction in consumption, accurate billing, and lower losses for distribution companies. Reports indicate that approximately 44 percent of consumers in Assam have saved about 50 units monthly, benefiting both consumers and Discoms by enhancing efficiency and reducing financial losses.
This has contributed positively to Assam’s ranking in the latest Integrated Annual Discoms ranking metrics.
Despite the initial challenges faced during implementation, Bajaj remains optimistic about the future, highlighting the considerable value that smart meters will bring to the sector.
“The escrow framework is exceptionally strong, and there are untapped opportunities for meter manufacturers, especially in expanding into gas and water metering,” he mentioned, expressing confidence in the potential for growth.
Echoing that sentiment, Ghosh expressed optimism for the future advantages that smart meters could yield. He suggested the introduction of financial incentives and a standardized Total Cost of Ownership (TCO) strategy to ensure long-term economic efficiency. Furthermore, addressing the shortage of skilled labor—potentially through educational institutions like the National Power Training Institute (NPTI)—could help accelerate advancements in this initiative.
According to the Central Electricity Authority, there are around 2.50 lakh 11 kV feeders, 1.51 crore distribution transformers, and approximately 34.18 crore end consumers.
Out of these 34.18 crore consumers, about 32.23 crore (94.29 percent) are metered. The consumer base comprises roughly 80 percent domestic users, followed by 9 percent commercial and 8.13 percent agricultural consumers. Of the total, urban consumers account for about 13.81 crore (40.42 percent), while rural consumers represent 20.36 crore (59.58 percent).
