To go ahead for reforming the Electricity Sector, the central government, in a press release through PIB on November 22, 2025, claims that the Electricity (Amendment) Bill, 2025, is a major step toward transforming India’s power system to meet the needs of a rapidly growing economy. It aims to create a future-ready electricity sector that delivers reliable, affordable, and high-quality power to every consumer: farmers and households, to shops and industries. The Bill moves away from the old monopoly supply model and encourages a performance-driven approach, where both public and private utilities compete fairly to improve consumer service. It promotes better use of the existing electricity network with transparency and accountability so that citizens get more value for every rupee spent.
The government stresses on its Key Takeaways: The Bill aims at making the Indian industry and logistics more competitive by rationalising electricity cost and reducing hidden cross-subsidy, promotes cost-reflective tariffs to ensure financial viability of the sector, while fully protecting subsidised tariffs for farmers and low-income households. Strengthens regulatory accountability to prevent financial distress in the sector and create a stable, investment-friendly environment.
It enables shared network use to avoid wasteful duplication, lower system costs, and support rapid expansion of distribution infrastructure and focuses on improving supply quality and reliability, and ensuring better coordination between the Centre and States in policy implementation.
The Government claims that the Electricity (Amendment) Bill, 2025, is a major step toward transforming India’s power system to meet the needs of a rapidly growing economy. It aims to create a future-ready electricity sector that delivers reliable, affordable, and high-quality power to every consumer: farmers and households, to shops and industries. The Bill moves away from the old monopoly supply model and encourages a performance-driven approach, where both public and private utilities compete fairly to improve consumer service. It promotes better use of the existing electricity network with transparency and accountability so that citizens get more value for every rupee spent.
Importantly, the reforms fully protect subsidised tariffs for farmers and low-income households. By providing a platform for the Centre and States to work together, it gives a big role to the states in shaping policies. More than just an update, this Bill is a blueprint for a modern, efficient, and resilient power sector. It aligns with India’s developmental aspirations, from farmers to industries. The bill supports the country’s vision of Viksit Bharat 2047, supporting India’s long-term economic growth.
The press release mentions this bill a step to ‘Correcting the Current: The Push Behind the Amendment,’ and reveals that the Electricity (Amendment) Bill, 2025, was brought forward to resolve deep-rooted inefficiencies, ease financial strain on the power sector, promote competition, and optimise network cost across India’s power distribution sector to overcome the persistent financial losses in distribution companies (discoms) due to poor billing efficiency, high aggregate technical and commercial (AT&C) losses.
Lack of competition in electricity supply, with consumers tied to a single discom, limiting service quality and innovation. Cross-subsidisation distortions, where industrial users pay inflated tariffs to subsidise other categories, making Indian manufacturing less competitive.
The Electricity (Amendment) Bill, 2025, aims to transform the existing market structure by rationalising cross-subsidy, promoting cost-reflective tariffs, and enabling direct procurement of power by industrial users. It seeks to dismantle longstanding barriers to India’s manufacturing competitiveness, making industrial power more affordable, reliable, and responsive to market demands, and at the same time protecting the subsidised tariff for farmers and other eligible consumers.
The Bill empowers State Electricity Regulatory Commissions (SERCs) to determine cost-reflective wheeling charges to ensure adequate network development by all the distribution licensees in accordance with the framework established by the SERCs. These regulated charges will be uniformly applicable to all users of the distribution network, whether public or private. This mechanism ensures that utilities have sufficient financial resources for staff salaries, routine maintenance, and future network development.
The central government terms this bill as ‘The ISTS Model: Efficient, Fair, Reliable’ and states that India already operates a successful Inter-State Transmission System (ISTS) built on shared infrastructure. Both public and private Transmission Service Providers (TSPs), including PowerGrid (a CPSU), compete to develop ISTS assets under the oversight of the Central Electricity Regulatory Commission (CERC). Monthly payments made by users are fairly redistributed among the TSPs. This model has helped reduce costs and construction time for ISTS projects while maintaining high reliability.
The government claims it a pace to ‘Powering Reform: Core Pillars of the Bill’, and asserts that the Electricity (Amendment) Bill, 2025, sets the stage for a more efficient, environmentally and financially sustainable, transparent, and consumer-focused power sector. It blends structural reforms with regulatory clarity to modernise electricity distribution across India. By aligning policy with evolving needs, the Bill aims to deliver quality service, financial discipline, and sustainable growth.
The Bill promotes fair competition between government and private distribution companies in electricity supply, overseen by State Electricity Regulatory Commissions (SERCs). This approach is expected to enhance service quality, boost operational efficiency, and offer electricity supply to the industrial sector at a reasonable cost. By shifting from a monopoly-based supply to performance-driven delivery, it fosters a more accountable and consumer-oriented power sector, while protecting the interests of the farmers and other consumers.
What Structural Reforms the Bill will come up with? The government pleads that it will facilitate regulated competition in electricity distribution, allowing multiple licensees to operate in the same area using shared and optimized infrastructure. It mandates Universal Service Obligation (USO) for all licensees, ensuring non-discriminatory access and supply to all consumers, while enabling SERCs to make Distribution licensees free from USO, in consultation with State Governments, for large consumers eligible for Open Access (more than 1 MW).
The Bill will be a step ahead towards ‘Tariff and Cross-Subsidy Rationalisation’, the government observes. It will promote cost-reflective tariffs while protecting subsidised consumers (e.g., farmers, poor households) through transparent budgeted subsidies under Section 65 and seek elimination of cross-subsidy for the Manufacturing Industry, Railways, and Metro railways within five years. It will bring reforms in — Infrastructure and Network Efficiency, Governance and Regulatory Strengthening, Sustainability and Market Development, and Legal and Operational Clarity.
Why Power Engineers are against this Bill?
But on the other hand, Power Engineers are protesting against the Bill. Why they are terming National Electricity Policy is Anti-Consumer, Anti-Farmer and Anti-Employee? Why they claim that this amounts to privatisation of profits and socialisation of losses? The All India Power Engineers Federation (AIPEF) has strongly opposed this policy and pleads through a press release dated 22 January, 2026, that the policy allows private companies to use power distribution networks built with public funds by State DISCOMs, while the responsibility of maintenance, losses and system stability remains with public utilities. This amounts to privatisation of profits and socialisation of losses. Exempting private companies from Universal Supply Obligation will enable them to supply power only in profitable urban and industrial areas, abandoning rural, agricultural and poor consumers which by default will become responsibility of Govt Discoms.
The Power Engineers Federation (AIPEF) states that the National Electricity Policy 2026, issued by the Central Government on 20 January, promotes rapid privatisation of the power sector and is against the interests of consumers, farmers and power sector employees. Shailendra Dubey Chairman of AIPEF has urged that ongoing Chintan Shivir of Power Ministers should also discuss the damage to be caused by Farmers, poor consumers & employees due to Privatization, EA Bill and NEP.
The AIPEF claims that sharp increase in electricity tariffs, Weakening of subsidised power supply to farmers, Higher cost of irrigation and adverse impact on agriculture
Increased burden on poor and middle-class consumers due to expensive and unreliable power. It will also have an adverse Impact on Power Employees and their Job security will be threatened. Due to this there will be rise in contractualization and retrenchment, dilution of service conditions, ignoring experienced engineers and employees and will weaken the power system.
Showing its concern AIPEF demands that the Government of India should immediately withdraw the National Electricity Policy 2026, Retain electricity as a public service, not a profit-driven commodity and frame any policy only after meaningful consultation with States, consumers, farmers and employees. The Power Engineers Federation warned that if the policy is imposed, power engineers and employees across the country will be compelled to launch a nationwide agitation.
Why do the farmers’ unions term this Bill as a threat to farmers and vulnerable consumers?
All India Kisan Sabha (AIKS) states that free /subsidised power for farmers, Dalits, Tribals, aquaculture and more will become uncertain. This Bill is structurally next to push corporate profits over farmers’ interests. Therefore, the Farmers unions are demanding its withdrawal, and are planning to protest across the country to force the GOI to repeal this draconian Bill.
Jag Mohan Thaken is a Senior Journalist, Columnist & Political Analyst, views are personal