Power sector employees, farmers and various employees’ unions in Punjab, under the Samyukt Kisan Morcha, are opposing the Draft Electricity (Amendment) Bill 2025, demanding its withdrawal. Power sector employees and farmers oppose the Draft Electricity (Amendment) Bill 2025 primarily because they fear that it will lead to privatisation of the power sector, ending crucial subsidies for the agriculture sector, removing universal supply obligations for private firms and drastically increasing electricity costs for rural households and farmers, making power unaffordable and undermining the public sector’s role in providing essential services.
They see it as a move that favours private corporations over public welfare, threatening livelihoods and strengthening corporate control over energy. When the government says more competition, a cost-reflective tariff but we end up with an oligopoly. On paper, the Draft Electricity (Amendment) Bill, 2025 promises the same dream – more private players, lower prices, better services. But in the end, the big sharks enter the market and consolidation begins and the consumers end up as losers. Are we reforming the system, or just changing the faces of those who dominate it?
Power sector engineers and workers fear job losses and a decline in the quality of public service. The amendment allows multiple distribution licensees to operate within the same area using their own or shared distribution systems. This fundamentally alters the distribution landscape by enabling private companies to use public infrastructure without bearing development costs. The fact is that this is backdoor privatisation initiated at the behest of private distributors.
The bill provides a provision that enables private companies to cherry-pick high-paying industrial and commercial consumers while public Discoms serve low-revenue rural and domestic consumers. Public utilities must maintain and upgrade the entire network infrastructure even as private licensees use it freely, socialising costs while privatising profit. Cherry-picking incumbents will prioritise high-value urban consumers, while domestic and rural/agricultural consumers will suffer.
The amendment mandates the complete elimination of cross-subsidies within five years, especially for Railways, Metro Rail, and manufacturing industries. This requires cost-reflective tariffs across all consumer categories.
Cross-subsidies are not inefficiencies but they are a social necessity in a country where millions depend on affordable electricity for domestic, agricultural, and livelihood needs. This is a right earned through long struggle. The removal will increase the power supply cost.
It may be mentioned that 30 per cent revenue for Discoms comes from high-end consumers. SC/ST and domestic consumers provide 30 per cent of revenue.
Fixed cost burdens, including capacity charges and asset maintenance, are not fully recovered through fixed charges. A portion of energy charges covers fixed costs, which licensees must pay even if sales are reduced. The proposal will cripple the financial stability of state utilities.
Under the Constitution, electricity is a concurrent subject. The Electricity Act 2003 correctly applied the spirit of federalism. The Centre sets policy and standards, while states manage distribution and State Electricity Regulatory Commissions (SERCs) function as independent regulators.
Farmer leaders allege that the Centre was pushing the bill without consulting the states, claiming it would lead to large-scale privatisation of electricity distribution, higher consumer bills and weakened state control over power regulation.
They criticise the state government for remaining silent, calling it an indirect endorsement of the Centre’s policy despite its impact on farmers and domestic consumers.
Unions argue the bill paves the way for large-scale privatisation, shifting focus from public service to profit. Removing cross-subsidies means farmers and the poor will bear higher costs, making electricity unaffordable.
(Yogindra Mohan is a veteran Journalist. Views expressed are personal.)
