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.
Which among the following was most likely the figure for AT & C losses in India in 2018-19?
20%
This question requires inferring a plausible figure from the trend described in the passage, since the passage does not give the exact 2018-19 figure directly.
The passage tells us: AT&C losses were 20.7% in 2019-20 and rose to 22.3% in 2020-21. It also tells us that AT&C losses were 'in excess of 30 per cent in the early 2000s,' implying that over roughly two decades, losses had come down substantially from that early-2000s peak to the low-20s range seen in 2019-20 and 2020-21.
Given that 2018-19 is the year immediately preceding 2019-20 (20.7%), the most reasonable estimate for 2018-19 would be a broadly similar figure, somewhere close to 20%, rather than a dramatic jump. Now compare with the options: 8% and 10% are far too low, since the passage indicates losses have consistently stayed well above these levels even in recent years, and the passage also notes India's system 'has always faced high AT&C losses.' 39% would only fit the 'early 2000s' peak the passage mentions, not a year as recent as 2018-19. That leaves 20%, which sits naturally close to the 20.7% figure of the following year, 2019-20.
Therefore, the correct answer is 20%.
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