Manohar Lal Emphasises Reforms for a Future-Ready Power Sector

Members of Parliament from various political parties across the Lok Sabha and Rajya Sabha participated in the deliberations, offering critical insights into the evolving policy landscape of India’s power sector.

The Meeting of the Parliamentary Consultative Committee for the Ministry of Power was held in New Delhi on 18 December 2025, chaired by Shri Manohar Lal, Union Minister for Power and Housing & Urban Affairs. Members of Parliament from various political parties across the Lok Sabha and Rajya Sabha participated in the deliberations, offering critical insights into the evolving policy landscape of India’s power sector.

Draft Electricity (Amendment) Bill, 2025: A Milestone Toward Viksit Bharat @ 2047

In his opening remarks, Shri Manohar Lal underscored the national significance of the Draft Electricity (Amendment) Bill, 2025, noting that it seeks to modernise and strengthen the legal foundation of the sector in line with India’s long-term vision of Viksit Bharat @ 2047.

He highlighted that India has achieved significant progress since the enactment of the Electricity Act, 2003, including reforms in generation, transmission, and distribution. However, persistent financial stress in the distribution sector, particularly among DISCOMs, continues to impede sectoral efficiency—necessitating a renewed, holistic legislative approach.

Ensuring Cost-Reflective Tariffs and Financial Discipline

One of the key proposals in the Draft Bill is the introduction of mandatory cost-reflective tariffs, enabling State Electricity Regulatory Commissions (SERCs) to act suo motu when utilities delay tariff filings.

While reinforcing financial discipline, the Minister clarified that State Governments may continue providing subsidies to priority consumer segments such as domestic and agricultural users, ensuring that consumer welfare remains fully protected. He assured that no increase in cost is anticipated for these subsidised categories.

Shri Manohar Lal emphasised that reducing distortions caused by cross-subsidies and surcharges is essential to improving the economic competitiveness of Indian industry, especially MSMEs, enabling them to grow, generate employment, and compete globally.

Empowering SERCs and Increasing Consumer Choice

The Bill proposes empowering SERCs, in consultation with State Governments, to exempt DISCOMs from the obligation to supply power to large consumers. Such consumers will gain the flexibility to procure electricity from competitive sources, thereby promoting a market-driven ecosystem.

This measure is expected to:

• Reduce the fixed cost burden on DISCOMs

• Improve financial stability

• Benefit smaller consumers through redistributed costs

• Encourage efficiency and competition in the sector

Large consumers opting to exit DISCOM supply will need to provide reasonable notice, ensuring operational continuity and planning.

Reinforcing Renewable Energy Obligations and Market Mechanisms

To accelerate India’s clean energy transition, the Bill proposes a minimum obligation for non-fossil source electricity. Shri Manohar Lal highlighted that ensuring the availability of cost-effective renewable energy requires complementary strategies beyond traditional power purchase agreements.

Hence, the Bill seeks to expand renewable capacity through market-based mechanisms, easing the burden on DISCOMs while advancing national climate commitments.

Enhancing Ease of Living, Ease of Doing Business, and Regulatory Governance

Reaffirming the government’s commitment to streamlined governance, the Minister pointed out several provisions that aim to:

• Improve service delivery to the general public

• Reduce compliance and financial burdens

• Promote a more conducive environment for businesses

The draft Bill proposes strengthening regulatory frameworks, including the expansion of the Appellate Tribunal for Electricity (APTEL) to manage rising case volumes.

It also seeks to include Right-of-Way provisions directly within the Act to address longstanding procedural hurdles and proposes distribution network sharing to avoid duplication of infrastructure—ultimately benefiting consumers.

Shri Manohar Lal clarified that fears regarding privatisation, tariff hikes, or adverse impacts on employees are unfounded, noting that adequate regulatory safeguards will ensure no negative consequences for any consumer category or workforce.

Electricity Council and Farmer Compensation Mechanisms

The Draft Bill envisions the establishment of an Electricity Council to promote cooperative federalism, facilitate dialogue, and build national consensus on core reforms.

The Minister also reaffirmed the government’s commitment to ensuring fair compensation for farmers whose land is used for laying electric lines. He highlighted that guidelines linking compensation to market value have already been issued by the Ministry of Power.

MPs’ Suggestions and Way Forward

Members of Parliament offered valuable suggestions on strengthening various provisions of the Bill and commended the Ministry for its proactive approach in steering India’s power sector toward a sustainable, resilient, and future-ready architecture.

Concluding the meeting, Shri Manohar Lal expressed gratitude to all participants and sought their continued support in finalising and passing the Electricity (Amendment) Bill, 2025, noting that its successful enactment will be pivotal for the nation’s long-term growth and energy security.