The Power Finance Corporation has reported that the aggregate technical and commercial (AT and C) losses of discoms have gone up from 20.7 percent in 2019-20 to 22.3 percent in 2020-21. The AT & C estimate gives us an idea of the losses a distribution company (discom) faces in its line of business. In layman's terms, if discom has received 100 units of power, the AT & C figure will tell us how many units are not recovered in terms of revenue. So, a figure of 25 per cent would mean that for every 100 units of power fed into the discom, 25 units are not recovered. Consequently, the discom has to operate with a recovery of only 75 units. Broadly, the losses in the system comprise technical losses and commercial losses, the latter largely implying theft. Some technical losses are inevitable in a distribution system but these can vary a lot across discoms (roughly between 4 to 12 per cent) depending on the technology adopted, the condition of the distribution infrastructure etc. Commercial losses are due to meters not being read, faulty meters, meters being manipulated or bypassed etc. The Indian distribution system has always faced high AT & C losses (in excess of 30 per cent in the early 2000s) which drains the discoms financially and makes then economically unviable.
A discom reports AT & C losses of 20%. If the discom received 50000 units of power, it was able to recover revenue for ____
40000 units
This is a numerical application question based on how the passage defines AT & C losses.
The passage explains: 'In layman's terms, if discom has received 100 units of power, the AT&C figure will tell us how many units are not recovered in terms of revenue... Consequently, the discom has to operate with a recovery of only 75 units' (for a 25% loss figure). This tells us that the AT&C loss percentage represents the share of power NOT recovered as revenue, and (100 minus the loss percentage) represents the share that IS recovered.
Here, the AT&C loss is 20%, meaning 20% of the power fed in is not recovered, so the recovered share is 100% − 20% = 80%.
Applying this to 50,000 units: recovered units = 80% of 50,000 = 0.8 × 50,000 = 40,000 units.
Therefore, the correct answer is 40000 units.
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