B Tulasidas
The Ministry of Power, Government of India published Draft Electricity (Amendment) Bill-2025 on October 9. Various central government departments and state governments have been asked to send their comments to the ministry within 30 days. When one examines this Bill, along with the justifications provided by the Centre in a 57-page document, the danger lurking for the country, the people, and the power sector becomes clear. To put it bluntly, it is clear that this is meant to privatise the electricity distribution sector and turn states into mere ceremonial figures, thereby increasing the control of the central government.
DOMINANCE FOR PRIVATE PLAYERS
Currently, there are 67 DISCOMs (distribution companies) across the country. Among them, 16 are run by private companies. In Delhi, Mumbai, Gujarat, West Bengal, Odisha, and other states, corporate entities like Adani Power, Tata Power, Torrent, and CESC are managing those private DISCOMs. Recently, the UP government proposed to privatise two DISCOMs. Although private DISCOMs came into existence in Odisha in the early days of World Bank reforms, they left the people in the lurch during a major cyclone, and the DISCOMS had to be taken back under government control. The main goal of the new bill is the privatisation of DISCOMs or allowing private players to use the infrastructure of public sector DISCOMs. Following the principle that to kill a dog, you must first call it mad, this bill also proclaims the accusation that the existing DISCOMs are trapped in a quagmire of losses. It is stated that all DISCOMs together have losses of Rs 6.9 lakh crores. World Bank reforms and government policies are the reason for this. But the attempt to malign DISCOMs is based on the ‘mad dog’ theory itself!
SINKING PUBLIC SECTOR DISCOMS
To empower private DISCOMs, this bill introduces a new entity called the ‘Electric Line Authority’. The erstwhile state electricity boards and the DISCOMs that succeeded them had the authority to erect electrical lines and take necessary access regarding permanent structures and immovable properties. Now, it is proposed that all such powers be handed over to private DISCOMs in the name of this Authority. What’s more, they have newly added some sections to allow the Electric Line Authority (private DISCOMs) to use the existing infrastructure of public sector DISCOMs. Without even erecting a new pole, private DISCOMs can provide connections to consumers of their choice (primarily the affluent) and get profits. The bill mentions that a fee should be paid to the DISCOMs for using the infrastructure, but it’s an open secret that it will be nominal. If they plan to set up their own lines, they would have to arrange their own infrastructure. If they are allowed to give connections of their choice using the public sector DISCOMs’ infrastructure, private DISCOMs will surely opt for that. Therefore, it is certain that public sector DISCOMs will be sunk through private players’ trickery. Paving the way for that is the aim of this new bill.
NO CROSS-SUBSIDIES
Another major point in this bill is the removal of cross-subsidies. This means that while a poor household in AP consuming less than 30 units per month currently pays Rs 1.90 per unit, the brightly lit hoardings in major cities are charged Rs 12.25 per unit. Similarly, for function halls, industries, and railways, the charges are somewhat higher compared to domestic consumers. That is, within the scope of the DISCOMs, some concession is provided to the poor and weaker consumers by charging more from the affluent and luxury consumers. This is called cross-subsidy. This has been the policy in effect since Independence. The World Bank dictates market driven economy and does not approve of it at all. That is why the BJP government states in this bill that there should be no cross-subsidies. However, doing it all at once would lead to public opposition, so it stipulated that it should be gradually reduced over five years. Therefore, under BJP rule, even the poorest consumer who uses just one bulb will have to pay the same electricity charges as those who put up luxurious hoardings. According to the new bill, electricity charges will be determined on a ‘Cost to serve’ basis. Therefore, the burden of electricity charges on consumers will increase.
NO FREE ELECTRICITY OR CONCESSIONS FOR AGRICULTURE AND OTHERS!
Currently, in both Telugu states and in some others, electricity is supplied free of charge or at a subsidised rate for agriculture. Similarly, free or concessional rates apply to Dalits, Tribals, and some other categories. Likewise, there are separate rates for aquaculture, horticulture, etc. The respective state governments bear the cost incurred by DISCOMs for all these as a subsidy. Generally, every year, the Regulatory Commission (ERC) before determining the electricity charges asks the state government in writing how much subsidy they will bear. Based on its convenience, the state government informs in writing the amount of subsidy it will bear. The ERC then declares the electricity charges (tariff) after deducting the subsidy amount that the state government has promised to bear from the DISCOMs’ annual revenue required. This entire process goes according to the existing Electricity Act (2003). However, in practice, state governments have been accumulating arrears in the subsidy amounts they need to pay year after year (this is one of the main reasons for DISCOMs’ losses). Whether the state government pays or not, the supply of subsidised electricity to these categories continues. This new bill poses a threat to these as well. Henceforth, it is stipulated that state governments must pay the subsidy they promise to the DISCOMs at the beginning of the financial year. It specifically mentions that state governments should pay the subsidies in advance to the DISCOMs. On one hand, there is the poor financial condition of state governments, and we are aware of the irresponsible financial management by some ruling parties! So, is advance subsidy practically feasible?
TOWARDS AUTHORITARIANISM...
Actually, the bill introduced now is not entirely new. This is one of the things the Narendra Modi government withdrew after the historic farmers’ protest in Delhi. They are now trying to bring it back through a backdoor. Although such a bill was introduced in 2022, after facing resistance inside and outside Parliament, it was referred to a Parliamentary Select Committee. Now, they have brought this bill again with even more draconian sections. Usurping the rights of the states is another key aspect of this bill. The bill proposes the establishment of an ‘Electricity Council’ under the chairmanship of the Central Power Minister. State power ministers will be members of it. We have seen the functioning of the GST Council under the chairmanship of the Union Finance Minister, which has been disrupting the country for the past decade. The same will be repeated in the electricity sector henceforth. The electricity policy, which is currently decided by states based on their needs and circumstances, will henceforth disappear. One Nation.. one Election.. one Tax.. One Electricity Policy. This is the political agenda of the central government. The BJP government at the Centre is conspiring to privatise the entire power sector, to sing the dirge for the concessions reaching weaker consumers, and to move towards a centralised authoritarian system by snatching away the rights of the states. This triple-pronged attack will only benefit corporates like Adani and Ambani, but common people, farmers, consumers, and especially those sections receiving various concessions will suffer severely. A nationwide agitation must be conducted against the destructive Electricity Amendment Bill and it must be completely overturned.
