On 9^th October, 2025, the Ministry of Power released the Draft Electricity (Amendment) Bill, 2025, inviting feedback from stakeholders, particularly States.

The primary objective of the Draft Electricity (Amendment) Bill, 2025, is to enhance regulatory accountability, promote sustainable energy practices, and improve the financial viability of India’s power industry.

India’s ambitious goal of achieving a developed economy by 2047, known as “Viksit Bharat,” necessitates a robust, sustainable, and competitive power sector.

The proposed amendments to the Electricity Act, 2003, outlined in the Draft Electricity (Amendment) Bill, 2025, aim to address longstanding challenges and expedite the transition towards cleaner energy sources. You can also check (click) here for detail analysis –

Empowering Viksit Bharat: Insights into the Draft Electricity (Amendment) Bill, 2025

To realize the vision of Viksit Bharat by 2047, India requires a power sector capable of supporting globally competitive industries while ensuring financial stability and environmental sustainability.

The proposed amendments to the Electricity Act, 2003, aim to provide universal access to affordable, reliable, and clean electricity, facilitating a seamless transition towards sustainable energy sources.

According to the Draft Electricity Bill, 2025, the distribution segment of the power sector continues to face significant financial challenges, with cumulative losses exceeding ₹6.9 lakh crore. High industrial tariffs resulting from cross-subsidies have hampered industrial competitiveness and economic growth, exacerbated by regulatory delays.

A robust legal framework is essential to address these issues and uphold India’s commitments to clean energy. The proposed amendments seek to enhance the financial sustainability of the power sector, improve living standards, and foster business growth.

Additionally, the amendments aim to enhance regulatory accountability, increase the share of non-fossil fuel electricity generation, and boost industrial competitiveness.

Key Provisions of the Electricity (Amendment) Bill, 2025

The main amendments proposed in the Draft Electricity (Amendment) Bill, 2025, include:

1. Financial Viability and Tariff Reform:

The bill mandates that electricity tariffs must reflect the actual cost of supply, aligning with a Supreme Court judgment emphasizing cost-reflective tariffs for financial viability. State Electricity Regulatory Commissions (SERCs) are empowered to set tariffs suo motu to prevent delays and ensure timely revisions.

2. Boosting Industrial Competitiveness:

To enhance economic productivity and competitiveness, the amendments aim to simplify electricity rates, stimulate demand, and reduce logistics costs. Measures include open access for consumers above 1 MW, exemptions for manufacturing enterprises from cross-subsidies, and promotion of captive generation.

3. Accelerating the Energy Transition:

In line with India’s renewable energy targets, the bill empowers the Central Electricity Regulatory Commission (CERC) to introduce market platforms and products like contracts for difference. Penalties for non-compliance with renewable purchase obligations are also proposed.

4. Regulatory Strengthening and Cybersecurity:

The bill expands grounds for removal of regulatory commission members, sets timelines for case adjudication, and enhances cybersecurity requirements for power systems to mitigate cyber threats.

5. Ease of Living and Doing Business:

Introducing minimum service standards, simplified appeal mechanisms, and removing outdated licensing requirements for defense areas to enhance consumer experience and business operations.

6. Institutional Reform: The Electricity Council:

Establishment of an Electricity Council chaired by the Union Power Minister to advise on policy, coordinate reforms, and foster consensus between the Centre and States.

Key Benefits for Consumers

1. Transparent and Fair Tariffs:

Mandatory cost-reflective tariffs and reduced cross-subsidies promote pricing transparency and equitable distribution of costs among consumers.

2. Improved Service Standards:

Minimum service obligations and streamlined appeals process enhance service quality and grievance redressal for consumers.

3. Greater Consumer Choice:

Open access for large consumers and support for captive generation offer consumers flexibility and cost-saving opportunities.

4. Cleaner and Greener Energy:

Promotion of non-fossil energy sources and market-based renewable incentives encourage the adoption of sustainable energy practices.

5. Enhanced Regulatory Oversight:

Stricter accountability measures for regulators and cybersecurity standards safeguard consumer interests  and infrastructure.

Conclusion

The Draft Electricity (Amendment) Bill, 2025, represents a significant step towards a cleaner, more competitive, and consumer-centric power sector. While the bill may be facing challenges from certain States, the bill lays the foundation for a stable and inclusive energy future, aligning legal frameworks with India’s energy goals. We need to wait and watch whether the draft Electricity (Amendment) Bill, 2025, will be a Game Changer in power sector. 

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