Power Bill Won’t Harm People’s Interest, Says Centre
The Bill encourages healthy competition between the Government and Private Discoms in electricity supply under the supervision of SERCs
Hyderabad: The Centre has insisted that the Electricity (Amendment) Bill, 2025, was aimed at strengthening the power distribution sector through financial discipline, healthy competition, and enhanced efficiency. At the same time, it said the Bill fully protected subsidised tariffs for farmers and other eligible consumers.
In a set of FAQs released through the Press Information Bureau, the Centre argued that competition would reduce the overall cost of electricity supply by improving efficiency and accountability in supply. The reforms will reduce losses and lower the effective subsidy burden on state governments, without altering the subsidised tariffs paid by consumers.
The Bill allows the state governments to provide subsidy to needy consumers through its own funds without depending on cross-subsidy.
Addressing the criticism that cost-reflective tariffs made power unaffordable for farmers and the poor, the government said: “Cost-reflective tariffs will break the discom’s debt cycle, enabling reliable service, timely maintenance, and distribution network infrastructure upgrades. Cross-subsidy elimination for manufacturing industries, Railways, and Metros will improve competitiveness and help in job creation. Hidden cross-subsidies are replaced with transparent and budgeted subsidies (under section 65 of the Act), protecting vulnerable consumers like farmers and poor.”
On the possibility of private companies cherry-picking their area of service, the PIB FAQ stated that each distribution licence covered all consumers within the SERC defined distribution area — either an entire municipal corporation or three adjoining districts or a smaller area only if specifically notified by the appropriate government.
The PIB’s FAQs also argued that electricity is in the concurrent list, enabling both the Centre and states to legislate. The Bill envisages implementation of reforms through a consultative process between them. “The proposed Electricity Council will serve as a consultative body to build policy consensus, while SERCs will continue to determine tariffs, issue licences, and regulate intrastate activities.”