The government has moved forward with consultations on the draft Electricity (Amendment) Bill, 2025, signalling its intent to recalibrate India’s power sector framework to address long-standing financial stress in distribution companies and rising electricity costs for industry.
The proposed amendments focus on mandating cost-reflective tariffs and empowering electricity regulatory commissions to intervene if utilities delay tariff filings. Officials have sought to reassure states that subsidies for priority consumer groups, including domestic and agricultural users, will continue, and that the proposed changes will not automatically translate into higher tariffs for these categories.
A key element of the Bill is the gradual reduction of cross-subsidies and surcharges, which the government argues distort prices and undermine industrial competitiveness, particularly for micro, small and medium enterprises. The draft also allows large consumers to procure electricity from alternative sources at competitive rates, subject to notice requirements, while easing the fixed-cost burden on distribution companies and protecting smaller consumers.
The Bill strengthens clean-energy integration by introducing a minimum obligation for electricity from non-fossil sources and enabling renewable capacity addition through market-based mechanisms, alongside traditional power purchase agreements. Other proposed reforms include distribution network sharing to avoid duplication, incorporation of right-of-way provisions into the law, expansion of the Appellate Tribunal for Electricity to manage rising caseloads, and the creation of an Electricity Council to improve centre–state coordination. The draft legislation is currently under consultation and is expected to be refined before being introduced in Parliament.
