The Centre may table the Electricity (Amendment) Bill during the Budget Session of Parliament as it steps up efforts to reform India’s power distribution system. The Bill seeks to amend the Electricity Act, 2003, and address persistent financial and operational weaknesses in electricity distribution companies (discoms).
Power Minister Manohar Lal Khattar has said the government plans to introduce the legislation in the current session. Officials link the move to Budget 2026 priorities, which place power sector reform high on the policy agenda.
Distribution remains the weakest segment of the power value chain. Many state-run discoms continue to post losses despite repeated bailout packages. Delayed payments to power generators and transmission firms remain common.
Tariffs in several states do not reflect actual costs, which adds pressure on public finances and discourages private investment. The proposed amendments aim to address these issues through structural change.
A key provision allows multiple distribution licensees to operate in the same area by using standard network infrastructure. The government believes competition can improve service quality, reduce outages, and give consumers more choice.
The Bill also seeks to strengthen the authority of state electricity regulatory commissions. Regulators may receive clearer powers to ensure timely tariff revisions and enforce performance norms. Officials say states will continue to decide subsidy levels, while tariffs move closer to cost recovery.
Another objective involves reducing cross-subsidies. Industrial and commercial users often pay higher tariffs to support domestic and agricultural consumers. Policymakers argue that a gradual correction can improve efficiency and lower overall system stress.
The Centre has already circulated a draft version of the Bill and invited comments from stakeholders. It has held consultations with state governments, utilities, and industry representatives. Officials say the final draft will reflect feedback received during these discussions.
The proposal has triggered opposition from power sector unions and employee groups. The All India Power Engineers Federation has warned of protests, citing concerns over privatisation and job security. Union leaders argue that private participation may raise tariffs and weaken public control.
The government has rejected these claims. It says the Bill focuses on accountability, efficiency, and consumer interest. It also plans to align the amendments with ongoing programmes such as the Revamped Distribution Sector Scheme, which targets loss reduction, smart meter deployment, and operational reforms.
If Parliament clears the Bill, it could reshape power distribution across states. The debate during the Budget Session will test the government’s ability to balance reform with political and social concerns.