Electricity Amendment Bill 2025: Why farmers, workers and states are pushing back | India News

Around 27 lakh workers are preparing nationwide strike—Spurred by a measure: introduction of the Electricity (Amendment) Bill, 2025 in Parliament. These are not just any workers, but the people who keep the nation’s electricity running—engineers, linemen, and workers throughout the power system. The Center has not yet tabled the Bill in Parliament.A glimpse of this unrest was already visible earlier this month, when several state electricity board workers walked off the job in protest.Opposition is not limited to the workforce. Farmer unions have also expressed concern, indicating resistance to bill cuts across the sector. The government, however, framed the draft Electricity (Amendment) Bill, 2025 as a long-overdue reform – aimed at making the power sector more competitive, efficient and better equipped for future demands. At its core is a key change: allowing multiple electricity distribution companies to operate in the same area, using shared infrastructure, while maintaining the obligation to deliver electricity to all consumers.But it’s not as simple as a switch, a bulb and waves of joy. For Kaveri Amma, electricity came as a quiet miracle—simple, shared, and powered by a single supplier who lit up entire villages.But if Kaveri Amma were around today, that simplicity wouldn’t exist. Power will still come at the flick of a switch—but it’s not just a man like Shah Rukh Khan running the show. It can be multiple companies, sharing the same cables, competing to supply electricity to the same home.That change is at the heart of the Electricity (Amendment) Bill 2025. “Privatization!”—The term power sector employees, farmers and trade unions are rallying to push back against. The Center has been trying to revamp the Electricity Act for over a decade, but every attempt has met with resistance.The opposition is not only about the bill, but also about how it is being drafted. A working group set up by the power ministry in January 2026 to finalize the bill has come in for criticism. All India Power Engineers FederationThat flagged the inclusion of the All India Discom Association, arguing that it indicated a shift towards privatization and employee concerns.

But privatization is not the only concern. The bill could change something more immediate — who supplies electricity to consumers and how much they pay for it.Given that, India’s power sector is at an interesting juncture. Electricity consumption is increasing – more appliances, more electric vehicles, more data centers running quietly in the background And the system, for now, is holding up. In 2025, the country is expected to meet a record peak demand of 240 GW, with a total installed capacity of over 5 lakh MW. More interesting is the shift in the energy mix—more than half of this power now comes from non-fossil sources. On paper, it looks like a sector that is expanding, modernizing and even cleaning up.But behind this growth story lies a more complex reality. Getting electricity to your home still depends on a large and expensive network—generation, transmission, and finally distribution. And it is this last leg that bears the most pressure. State-run distribution companies, or DISCOMs, have historically struggled with mounting losses. Indeed, only recently, after years of red ink, did they post a modest collective profit 2,700 crore in 2024-25. To put that in perspective, the sector reported losses of over Rs 25,000 crore just a year ago, and around Rs 68,000 crore a decade ago. It’s a change, but a fragile one, built on a system that still struggles with low-cost tariffs, delayed subsidies and persistent inefficiencies.It is this gap — between fast-growing power systems and financially stressed distributors — that the government is trying to address through the Electricity (Amendment) Bill, 2025. The concept itself is not new; Versions of this have been published several times over the years. But the pitch remains the same: introduce competition, allow multiple companies to supply electricity to the same area and, at least in theory, give customers more choice by pushing the system to become more efficient.

Why are farmers against it?

A key focus of the proposed changes is tariff reform and efficiency. The government said the bill would move towards cost-reflective taxation, while continuing targeted subsidies for vulnerable groups such as farmers and low-income households through the state budget. But farmers’ unions aren’t buying it. In India, several states provide free or subsidized electricity to farmers. Entry of private players will eventually render state-run discoms unviable, leaving farmers to pay to opt for private suppliers.

Kisan Mazdoor Morchar Rail Roko Protest

Center vs State Question

Another concern runs deeper – who gets to call the shots. Right now, power distribution sits largely with the states. Each has its own utility and, with it, a degree of control over tariffs and subsidies—often used as a policy lever, and sometimes as a political commitment.The concern is that this balance may shift. If greater control shifts to central regulators or new private players enter the system, states could find themselves with less say over how electricity prices and who gets subsidized power. And for many, it’s not just an administrative change — it’s the loss of a key tool they’ve long relied on.This concern is not limited to policy. They also extend to jobs. With more private participation, there are concerns about outsourcing, restructuring of state-run utilities and potential job losses across the sector—especially for the very workforce now leading the protests.“Privatization and open access will lead to large-scale job losses, contracting and outsourcing. By allowing private licensees in the defense sector, the bill also threatens national security in the name of ‘ease of doing business’,” said Center of Indian Trade Unions (CITU) vice-president Tapan Sen.

What about consumers?

Electricity is a politically sensitive issue in India. Elections in India are fought and won on promises of free or subsidized electricity. Hence, the commoditization of the subject gave rise to the welfare state debate.CITU said that “the bill is part of a larger neoliberal strategy to hand over the entire electricity supply chain—from generation to distribution—to private monopolies.” “By promoting predictable energy markets, the bill transforms electricity—a basic human need—into a tradable commodity. Such regulation will lead to price volatility, unreliable supply, and weakening of public control over energy security,” Sen said.The bill seeks to make the power sector competitive. Competition offers consumers choice, lowers prices and provides them with the best service. It clearly says “Lack of competition In power supply, by tying consumers to a single discom, limiting service quality and innovation.”At least on paper, the promise is straightforward: more competition should mean more choice, better service and lower prices. That’s the argument driving the bill. If multiple companies can supply electricity to the same area, they will compete to keep customers happy.But it doesn’t always play out that nicely. In some sectors, competition worked early, such as telecoms. More players entered, prices dropped and service improved. But over time, that same competition has thinned the field. What started as a crowded market eventually narrowed down to a handful of dominant players. Similarly, Air India’s privatization efforts were initially welcomed but the recent IndiGo crisis has exposed the dangers of the system’s bifurcation.That possibility is here too. Even if multiple power distributors enter the same area, the market may not remain congested forever. It may settle near a few large companies. And when that happens, competition can still push for better service, but that doesn’t necessarily guarantee cheaper electricity.

How successful has the privatization move been?

If the idea is to bring in private players to fix distribution, India has already tried it – just not the scale. Discoms sit at the very end of the electricity chain, responsible for delivering electricity to homes and collecting payments. They are, in effect, the exclusive retailer in their area. And yet, despite their central role, most state-run discoms have struggled over the years with losses, inefficiencies and mounting debt. Privatization is often seen as a way out of this cycle.In reality, only a few states have gone down that path. Odisha made the first attempt in the late 1990s, but the initial effort did not hold up and had to be rolled back. The Delhi experience, which followed in 2002, is often held up as a benchmark. After de-opening its electricity board and bringing in private operators, the results were visible on the ground – losses in the system reduced rapidly. Overall technical and commercial (AT&C) losses, once as high as 45-60%, have come down to below 6.5% over time. This is a significant improvement, especially when the national average is still around 15%.But that’s only part of the story. Research and analysis by the Center for Social and Economic Progress notes that while efficiency has improved and supplies have become more reliable, the financial picture remains complex. Tariffs continue to be tightly regulated and disagreements between regulators and discoms over cost approvals become regular. A large portion of the costs claimed by discoms have not always been allowed to be recovered through tariffs, leading to the creation of “regulatory assets” – essentially costs deferred for the future. In Delhi’s case, these have accumulated into tens of thousands of crores of rupees, with disputes raging in tribunals and courts over the years.And from there the limits of privatization begin to show. Bringing in private operators can fix operational problems — like reducing theft or improving billing — but it doesn’t automatically solve deeper structural problems. Questions about tariff-setting, cost recovery, and regulatory oversight do not disappear. In fact, if anything, they become more competitive. The result is a system where efficiency gains coexist with financial uncertainty—and where, ultimately, the consumer may still have to bear the cost.This is probably why most states have not rushed to follow Delhi’s path. Government-run discoms still dominate the landscape and private participation remains limited. The larger lesson of the past two decades is fairly clear – privatization can improve how electricity is delivered, but by itself, it does not guarantee a financially stable system. It depends on how the sector is regulated – and how those rules are enforced.