Proposed electricity Bill sparks concerns over privatisation, federalism, consumer rights

By Jag Jivan

The Union government’s newly released has reignited debate over the future of , with critics warning that the proposed changes could undermine , , and . The Bill seeks sweeping reforms that would open the to , , and strengthen the over state electricity policies.

At the core of the Bill is a move to allow multiple to operate in the same area using the existing public-funded network. While the government presents this as a step toward “” and competition, critics say it will enable private companies to target high-paying industrial and commercial consumers, leaving public distribution companies (DISCOMs) with loss-making . Such an arrangement, they argue, will weaken state utilities, erode , and push up tariffs for ordinary consumers.

The Bill also proposes the phased removal of cross-subsidies within five years. Cross-subsidisation — where industrial and commercial users pay higher tariffs to offset lower tariffs for households and farmers — has been a key mechanism to ensure affordable electricity for weaker sections. Its removal, opponents warn, would make power unaffordable for millions of rural and low-income consumers.

The draft law introduces measures to deepen , with expanded “open access” and . While such provisions are intended to enhance efficiency and transparency, and experts fear they will accelerate privatisation, job losses, and tariff volatility. Electricity, they caution, is being transformed from a public necessity into a speculative commodity.

The Bill also grants the greater authority over and . Critics have described this as a serious blow to . They argue that the move centralises decision-making in a sector historically managed through state-level policy and planning, and could especially strain opposition-ruled states already facing fiscal constraints.

The Centre of Indian Trade Unions (CITU), which has strongly opposed the Bill, called it “a direct assault on the public electricity system and the right to affordable energy.” In a statement, CITU said, “This draft is part of a wider neoliberal agenda to dismantle the integrated, socially driven electricity framework built over decades and hand over the sector to private monopolies.” The organisation warned that privatisation would lead to large-scale job losses, contractualisation, and outsourcing, even in sensitive sectors such as defence zones.

CITU has demanded the immediate withdrawal of the Draft Electricity (Amendment) Bill, 2025, and urged the government to guarantee electricity as a rather than a . “We will launch and with other trade unions and people’s movements to demand the complete withdrawal of this ,” said , .

The Bill, currently open for , is expected to face strong opposition from , trade unions, and in the coming weeks.

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