NEW DELH: Union power minister Manohar Lal Khattar said that proposed amendments to the Electricity Act will not lead to a tariff hike, and eligible beneficiaries will continue to receive subsidies from their respective state govts.Chairing a meeting of the parliamentary consultative committee earlier this week, the minister stated that the draft Electricity (Amendment) Bill, 2025, only mandates “cost-reflective” tariffs and empowers regulatory commissions to act suo motu when utilities delay tariff filings.
“…the state govts may continue to provide subsidies to priority consumer groups such as domestic and agricultural consumers, and there may not be any increase in cost for such consumers. This ensures that financial discipline and consumer welfare go hand in hand,” the minister said, amid protests by farmers demanding the withdrawal of the Bill.“Suitable regulatory and policy measures will be taken to ensure that there will not be any adverse effect on any class of consumers or employees,” he added.The details of the meeting were shared by the govt on Saturday.The consultative exercise on the provisions of the draft Bill is currently underway, and the new legislation is likely to be tabled in Parliament during the Budget session next year. The govt said in a statement that lawmakers from various political parties in both Houses participated in the consultative meeting. It added that the Bill seeks to reduce distortions caused by cross-subsidies and surcharges and aims to support Indian industry, including MSMEs, to grow, expand employment, and compete globally by making electricity costs “reasonable”. The Bill also proposes to empower state electricity regulatory commissions to exempt power discoms from the obligation to supply large consumers. “These consumers can procure power at competitive rates from other sources,” said Khattar.Emphasising the need for greater use of cleaner energy, the minister said the Bill proposes a minimum obligation for the use of non-fossil source electricity. Capacity addition will be enabled through market mechanisms, in addition to agreements by discoms, to ensure the availability of cost-competitive and adequate renewable energy.The draft Bill also proposes to expand the strength of the Appellate Tribunal for Electricity to handle increasing caseloads, apart from operational reforms such as incorporating right-of-way provisions directly into the Act and enabling distribution network sharing to avoid duplication.The Bill envisages the establishment of an electricity council to foster cooperative federalism and build national consensus on power sector reforms, the statement read. Khattar said the central govt will take necessary steps to ensure reasonable compensation to farmers for land used for laying electric lines, adding that the power ministry has already issued guidelines for determining compensation linked to market rates.