Nearly 27 lakh workers are gearing up for a nationwide strike—triggered by a single move: the introduction of the Electricity (Amendment) Bill, 2025 in Parliament. These aren’t just any workers, but the people who keep the country’s power running—engineers, linemen, and staff across the electricity system. Centre is yet to table the Bill in the Parliament.A glimpse of this unrest was already visible earlier this month, when employees from several state electricity boards walked off the job in protest.Opposition isn’t limited to the workforce. Farmer unions have also raised concerns, signalling that resistance to the Bill cuts across sectors. The government, however, has framed the Draft Electricity (Amendment) Bill, 2025 as a long-overdue reform—one that aims to make the power sector more competitive, efficient, and better equipped for future demand. At its core is a key shift: allowing multiple electricity distribution companies to operate in the same area, using shared infrastructure, while maintaining an obligation to supply power to all consumers.But it’s not quite as simple as one switch, one bulb, and a wave of happiness. For Kaveri Amma, electricity arrived like a quiet miracle—simple, shared, and powered by a single supplier who lit up the entire village.But if Kaveri Amma were around today, that simplicity wouldn’t hold. The power would still come at the flick of a switch—but behind it wouldn’t be just one Shah Rukh Khan-like figure running the show. It could be multiple companies, sharing the same wires, competing to supply electricity to the same home.That shift is at the heart of the Electricity (Amendment) Bill 2025. “Privatisation!”—that’s the word power sector employees, farmers, and trade unions have been rallying around as they push back against it. The Centre has been trying to rework the electricity law for over a decade, but each attempt has met resistance.The opposition isn’t just about the Bill, it’s also about how it’s being drafted. A working group set up by the power ministry in January 2026 to finalise the Bill has drawn criticism from the All India Power Engineers Federation, which has flagged the inclusion of the All India Discom Association, arguing it points to a tilt towards privatisation and sidelines worker concerns.
But privatisation is not the only concern. The Bill could change something far more immediate—who supplies electricity to consumers, and how much they end up paying for it.Here’s the thing, India’s power sector is at an interesting crossroads. Electricity use is climbing steadily–more appliances, more electric vehicles, more data centres quietly running in the background. And the system, for now, is keeping up. In 2025, the country met a record peak demand of over 240 GW, with total installed capacity crossing 5 lakh MW. What’s more striking is the shift in the energy mix—over half of this capacity now comes from non-fossil sources. On paper, it looks like a sector that’s expanding, modernising, and even getting cleaner.But behind this growth story lies a more complicated reality. Getting electricity to your home still depends on a vast and expensive network—generation, transmission, and finally distribution. And it’s this last leg that continues to carry the most stress. State-run distribution companies, or discoms, have historically struggled with mounting losses. In fact, only recently, after years of red ink, did they collectively post a modest profit of about Rs 2,700 crore in 2024–25. To put that in perspective, the sector had reported losses of over Rs 25,000 crore just a year earlier, and nearly Rs 68,000 crore a decade ago. It’s a turnaround, but a fragile one, built on a system that still struggles with underpriced tariffs, delayed subsidies, and persistent inefficiencies.This gap—between a fast-growing power system and financially strained distributors—is what the government is trying to address through the Electricity (Amendment) Bill 2025. The idea itself isn’t new; versions of it have surfaced multiple times over the past few years. But the pitch remains the same: introduce competition, allow multiple companies to supply electricity in the same area, and, give consumers more choice while pushing the system to become more efficient, at least in theory.
Why are farmers against it?
A key focus of the proposed changes is tariff reform and efficiency. The government says the bill will move towards cost-reflective tariffs, while continuing targeted subsidies for vulnerable groups such as farmers and low-income households through state budgets. But farmer unions are not buying this. In India, several states provide free or subsidized electricity to farmers. Entry of private players will eventually make the state-run discoms inefficient, leaving farmers to pay to opt for private suppliers.
Kisan Mazdoor Morcha’s rail roko protest
Centre vs state question
Another concern runs deeper—who gets to call the shots. Right now, electricity distribution largely sits 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 promise.The worry is that this balance could shift. If greater control moves toward central regulators or new private players entering the system, states may find themselves with less say over how electricity is priced and who gets subsidised power. And for many, that’s not just an administrative tweak—it’s a loss of a key tool they’ve long relied on.These anxieties aren’t limited to policy alone. They extend to jobs as well. With more private participation, there are concerns about outsourcing, restructuring of state-run utilities, and the possibility of job losses across the sector—especially for the very workforce now leading the protests.“Privatisation and open access will lead to large-scale job losses, contractualisation, and outsourcing. By allowing private licensees in defence zones, the Bill also jeopardises national security in the name of ‘ease of doing business’,” said Centre of Indian Trade Unions (CITU) vice president Tapan Sen.
What about consumers?
Electricity is a politically sensitive subject in India. Elections are fought and won promising free or subsidised electricity in India. Hence, the commodification of the subject has sparked the welfare state debate.CITU said that “the Bill is part of a wider neoliberal strategy to hand over the entire electricity supply chain—from generation to distribution—to private monopolies.” “By promoting speculative power markets, the Bill converts electricity—a basic human necessity—into a tradable commodity. Such deregulation will lead to price volatility, unreliable supply, and the weakening of public control over energy security,” Sen said.The Bill seeks to make the power sector competitive. Competition offers choice to consumers, brings down prices and offers them best services. It clearly states “lack of competition in electricity supply, with consumers tied 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 logic driving the Bill. If multiple companies can supply electricity in the same area, they’ll compete to keep consumers happy.But it doesn’t always play out that neatly. In some sectors, competition initially worked, like telecom. More players entered, prices dropped, and services improved. But over time, that same competition thinned out the field. What began as a crowded market eventually narrowed down to a handful of dominant players. Likewise, the effort to privatise Air India was initially welcomed but recent IndiGo crisis exposed perils of duopoly in the system.That possibility exists here too. Even if several electricity distributors enter the same area, the market may not stay crowded forever. It could settle around a few large companies. And when that happens, competition may still push for better service, but it doesn’t necessarily guarantee cheaper power.
How successful have privatisation moves been?
If the idea is to bring in private players to fix distribution, India has already tried that—just not at scale. Discoms sit at the very end of the electricity chain, responsible for delivering power to homes and collecting payments. They are, in effect, monopoly retailers in their areas. And yet, despite their central role, most state-run discoms have struggled for years with losses, inefficiencies, and mounting debt. Privatisation has often been pitched as a way out of this cycle.In practice, only a handful of states have gone down that route. Odisha was among the first to try in the late 1990s, but the initial attempt didn’t hold and had to be rolled back. Delhi’s experience, which followed in 2002, is often held up as the benchmark. After unbundling its electricity board and bringing in private operators, the results on the ground were visible—losses in the system dropped sharply. Aggregate Technical and Commercial (AT&C) losses, once as high as 45–60%, fell to under 6.5% over time. That’s a significant improvement, especially when the national average still hovers around 15%.But that’s only one part of the story. As research and analysis by the Centre for Social and Economic Progress points out, while efficiency improved and supply became more reliable, the financial picture remained complicated. Tariffs continued to be tightly regulated, and disagreements between the regulator and the discoms over cost approvals became routine. A large share of expenses claimed by discoms was not always allowed to be recovered through tariffs, leading to the buildup of “regulatory assets”—essentially costs deferred to the future. In Delhi’s case, these have piled up to tens of thousands of crores, with disputes dragging on across tribunals and courts for years.And that’s where the limits of privatisation start to show. Bringing in private operators may fix operational issues—like reducing theft or improving billing—but it doesn’t automatically resolve deeper structural problems. Questions around tariff-setting, cost recovery, and regulatory oversight don’t disappear. In fact, if anything, they become more contested. The result is a system where efficiency gains coexist with financial uncertainty—and where, eventually, the consumer may still have to bear the cost.That’s perhaps why most states haven’t rushed to follow Delhi’s path. Government-run discoms still dominate the landscape, and private participation remains limited. The broader lesson from the past two decades is fairly clear–privatisation can improve how electricity is delivered, but by itself, it doesn’t guarantee a financially stable system. That depends just as much on how the sector is regulated—and how those rules are enforced.
