India’s smart meter rollout under the Revamped Distribution Sector Scheme (RDSS) is running significantly behind target, with only 44 million meters installed so far against a 250 million target by 2028, even as execution delays, payment withholdings and tariff compression continue to weigh on the sector.
According to a report by India Ratings and Research (Ind-Ra), around 122 million smart meters have been awarded till March 2026, but actual installations remain limited to 44 million meters, highlighting the widening gap between project allocation and on-ground execution.
The pace of deployment also remains well below requirement. Monthly installations currently stand at 2.47 million meters against the required run rate of 4.6 million meters needed to achieve the 2028 target.
Operational Bottlenecks
The report said delays in achieving “go-live” status remain a major challenge for advanced metering infrastructure service providers. Smart meter projects are currently taking 14-16 months to become operational against the stipulated seven-month timeline because of system integration issues and operational bottlenecks.
Ind-Ra also flagged continuing payment-related risks despite government-backed support mechanisms.
Payment withholdings ranging between 3%-9% continue across projects due to metering gaps at feeder and distribution transformer levels and invoice reconciliation delays.
The report added that tariff compression is reducing financial cushions available to developers. Recent bids have seen operating expenditure tariffs decline to around ₹70 per meter per month compared with ₹80-95 per meter in earlier projects, affecting project cash flow buffers amid delayed operationalisation.
Despite these pressures, Ind-Ra said sector risks remain manageable due to improving payment visibility and stronger implementation support mechanisms.
“Smart metering installations are expected to increase, and DDF issues faced by advanced meter infrastructure service providers appear temporary rather than structural. These issues are expected to resolve as the sector matures,” Vishal Kotecha, Director, Infrastructure Ratings, Ind-Ra, said.
Robust Manufacturing
The report said domestic manufacturing capacity of around 100 million meters annually is expected to support faster deployment in the coming years. Distribution companies have also started providing extensions aligned with scheduled commercial operation dates to support project execution.
Ind-Ra said financial metrics of rated projects remain stable despite execution delays.
Debt service coverage ratios remain above 1.25 times, while equity returns continue to exceed 15%, supported by sponsor backing, DDF-backed payment mechanisms and adequate cash flow visibility.
The agency added that smart metering costs account for only around 0.5%-1.5% of a discom’s annual revenue requirement, limiting the impact of regulatory non-approval on project viability.
Jitendra Kumar Agarwal, Joint Managing Director of Genus Power Infrastructure, said smart metering is becoming a critical pillar of India’s next phase of power-sector reforms.
“Smart metering has become a critical enabler of India’s next phase of power-sector transformation,” Agarwal said.
“Smart meters are empowering consumers with greater visibility and control over their consumption, bringing transparency, accountability and informed consumption into the system,” he added.