Archive · 27 Jan 2026
Draft Electricity Bill 2025 Proposes Key Reforms
The Indian government is planning big changes to how electricity is distributed.
They want to make power cheaper for businesses and factories by letting electricity companies charge fair prices.
Right now, industries and trains pay extra to keep rural electricity cheap, but this will stop in five years.
The government also wants more electricity companies to operate in the same area to create competition.
Additionally, big power users who need more than 1 MW won't have to get their electricity from these companies anymore.
This could help electricity companies save money and work better.
However, there are some concerns about how these changes will be put into practice, like making sure prices are fair and avoiding too much competition that could cause problems.
The government is also working on making sure these changes happen smoothly for everyone involved.
Draft Electricity (Amendment) Bill, 2025 proposes cost-reflective tariffs, multiple distributors, and exemption for high-load consumers
Cross-subsidies from industry and railways to be phased out in five years
Multiple distribution companies allowed in single areas to promote competition
Discoms may be relieved of obligation to supply high-load consumers (demand > 1 MW)
Implementation challenges include proper cost assessment, network disputes, and transition period for high-load consumers
- Who
- Power Minister Manohar Lal, State governments, discoms, industry, railways, high-load consumers
- What
- Draft Electricity (Amendment) Bill, 2025 proposing reforms in the distribution sector
- When
- Expected to be tabled in the Budget session
- Where
- India
- Why
- To reduce power costs for productive sectors, promote competition, and relieve discoms of operational burdens
- Bill Name
- Draft Electricity (Amendment) Bill, 2025
- Expected Tabling
- Budget session
- Key Measures
- Cost-reflective tariffs, multiple distributors, high-load consumer exemption
- Cross-subsidy Phase-out
- 5 years
- Current Scheme
- Revamped Distribution Sector Scheme (RDSS)
- High-load Consumer Threshold
- 1 MW
- Open Access Market Share
- 15% of generation
