The Electricity Amendment Bill has emerged as one of the most discussed and debated reforms in India’s energy sector in 2025–26. Originally drafted to overhaul the Electricity Act, 2003, and introduce broad changes in power distribution, the government is now recalibrating key provisions following extensive feedback from states, consumer groups, regulators, and industry stakeholders.

Why the Electricity Amendment Bill Is Being Revised

The Electricity Amendment Bill was introduced to improve efficiency, financial viability, and consumer choice in India’s power sector. It aimed to bring competition into the distribution space, strengthen regulatory oversight, and rationalise long-standing subsidy frameworks that have strained state finances and discoms (distribution companies).

However, since the draft was released in November 2025, the government has received a large number of comments and suggestions from state governments, regulatory bodies, and consumer associations. Many of these stakeholders raised concerns about the impact of competition on state finances, the regulatory role of state bodies, and consumer protection, prompting the Centre to signal a course correction before tabling the Bill in Parliament.

Power Secretary Pankaj Agarwal explained that refinements are needed to address issues related to regulatory oversight, fiscal realities of states, and consumer impact. The ministry is reviewing many of these suggestions for possible incorporation ahead of the final legislative proposal.

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What the Bill Proposes: Key Elements

The draft Electricity Amendment Bill includes several major reforms designed to modernise the power distribution framework:

Multiple Distribution Licensees

One standout proposal is to introduce distribution sub-licensing or multiple supply licensees in a given area, allowing more than one company to use a common distribution network. The aim is to inject competition into retail supply, improve service quality, and reduce power losses.

Regulatory Autonomy and Consumer Choice

The Bill envisions enhanced autonomy for state electricity regulatory commissions (SERCs) to set tariffs and oversee market functioning while reducing litigation and streamlining regulatory processes.

Subsidy Rationalisation

Rather than embedding subsidies in tariffs, the Bill proposes delivering them through transparent mechanisms such as direct benefit transfers, potentially easing the financial burden on states.

Addressing Discom Debt

The government is considering recommendations from the 16th Finance Commission on handling discom debt and liability restructuring, a core issue for state utilities grappling with losses.

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Stakeholder Responses and Pushback

The Electricity Amendment Bill has triggered wide-ranging reactions:

• State Governments: Some states have expressed reservations about perceived erosion of their powers in electricity distribution, noting the sector falls under the concurrent list of the Constitution.

• Consumer Groups: Consumer associations have warned that competition might primarily benefit urban and high-paying customers, while rural and low-income users continue to depend on financially stressed public utilities.

• Regulatory Bodies: Regulatory experts have participated in consultations, pushing for balanced reforms that protect consumer interests and maintain reliable service delivery.

As a result of this inclusive feedback loop, the Centre is signalling a more calibrated approach, balancing reform ambition with political and fiscal realities, prior to introducing the Bill to Parliament.

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Charting Reform: Key Components of the Electricity Amendment Bill

What Comes Next

With ongoing consultations and revisions underway, the Electricity Amendment Bill is expected to be introduced in the upcoming budget session of Parliament. Ahead of that, further stakeholder engagement with discoms, consumer bodies, and regulators will shape the final contours of this transformational reform proposal.

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