About 27 lakh workers have gathered across the country. strike-Started with a single step: Introduction of the Electricity (Amendment) Bill, 2025 in Parliament. These are not just any workers, but the people who keep the country’s electricity running – engineers, linemen and power system workers. The Center has not yet introduced the bill in Parliament.A glimpse of this unrest was visible earlier this month, when employees of several state electricity boards walked off the job in protest.The protests are not limited to the workforce. Farmer unions have also raised concerns, indicating that opposition to the bill is coming across all sectors. However, the government has drafted the Electricity (Amendment) Bill, 2025 as a long-awaited reform – aimed at making the power sector more competitive, efficient and better equipped for future demand. At its core is a significant change: allowing multiple electricity distribution companies to operate in the same area using shared infrastructure, while maintaining the obligation to supply electricity to all consumers.But it’s not as simple as a switch, a bulb and a wave of happiness. For Kaveri Amma, electricity came like a miracle – simple, shared, and operated by a single supplier that illuminated the entire village.But if Kaveri Amma were alive today, that simplicity would no longer exist. Electricity will still come at the flick of a switch – but there won’t be just a personality like Shah Rukh Khan running the show. This could be multiple companies sharing the same wires, competing to supply electricity to the same home.This change is at the core of the Electricity (Amendment) Bill 2025. “Privatization!”– This is the word that power sector employees, farmers and trade unions are mobilizing against. The Center has been trying to rework the electricity law for more than a decade, but every attempt has met with resistance.The protest is not just about the bill, it is also about how it is being prepared. A working group formed by the power ministry in January 2026 to finalize the bill has come under criticism All India Power Engineers Federationwhich has blocked the inclusion of the All India Discom Association, arguing that it indicates a inclination towards privatization and marginalization of workers’ concerns.
But privatization is not the only concern. The bill could bring about some more immediate changes—who supplies electricity to consumers, and how much they pay for it.The thing is, India’s power sector is at an interesting crossroads. Electricity use is constantly increasing – more appliances, more electric vehicles, more data centers running quietly in the background. And the system, for now, remains in place. In 2025, the country aims to meet a record peak demand of over 240 GW, with the total installed capacity crossing 5 lakh MW. Even more striking is the change in the energy mix – more than half of this capacity now comes from non-fossil sources. On paper, it looks like a sector that is expanding, modernizing, and even cleaning up.But behind this growth story lies a more complex reality. Getting electricity to your home still depends on a vast and expensive network—generation, transmission, and ultimately distribution. And it’s the last step that carries the most stress. State-run distribution companies, or discoms, have historically grappled with rising losses. In fact, recently, after years of red ink, they collectively posted a modest Benefit About Rs 2,700 crore in 2024-25. To put this in perspective, the sector had recorded losses of over Rs 25,000 crore just a year ago and nearly Rs 68,000 crore a decade ago. It’s a change, but a fragile one, built on a system that still struggles with low-cost tariffs, delayed subsidies and persistent inefficiencies.This gap – between the rapidly growing power system and financially stressed distributors – is what the government is trying to address through the Electricity (Amendment) Bill 2025. The idea itself is not new; Versions of this have appeared several times over the years. But the pitch remains the same: introduce competition, allow multiple companies to supply electricity to the same area, and, to make the system more efficient, give consumers more choice, at least in theory.
Why are farmers against this?
The main focus of the proposed changes is tariff reform and efficiency. The government says the bill will move toward cost-reflective tariffs, while targeted subsidies for vulnerable groups such as farmers and low-income households will continue through the state budget. But farmers organizations are not buying it. In India, many states provide free or subsidized electricity to farmers. The entry of private players will eventually make state-run discoms inefficient, forcing farmers to pay to choose private suppliers.
Rail roko protest of Kisan Mazdoor Morcha
question of center vs state
Another deeper concern is who gets to decide. At present, the responsibility of electricity distribution largely rests with the states. Each has its own utility, and with it, a degree of control over tariffs and subsidies – often used as policy levers and sometimes as political promises.The concern is that this balance could change. If more control moves toward central regulators or new private players entering the system, states may have less say over how electricity is priced and who gets subsidized power. And for many, this isn’t just an administrative change – it’s the loss of a vital tool they’ve long relied on.These concerns are not limited to policy alone. This also extends to jobs. With greater private involvement, there are concerns about outsourcing, restructuring of state-run utilities and the potential for job losses across the sector – particularly for the same workforce that is now leading the protests.Tapan Sen, vice-president of the Center of Indian Trade Unions (CITU), said, “Privatization and open access will lead to large-scale job losses, contracting and outsourcing. By allowing private licensees in defense sectors, the Bill also puts national security at risk in the name of ‘ease of doing business’.”
What about consumers?
Electricity is a politically sensitive topic in India. In India, elections are fought and won by promising free or subsidized electricity. Therefore, the commodification of this topic has sparked debate on the welfare state.CITU said that “This bill is part of a broader neoliberal strategy to hand over the entire electricity supply chain – from generation to distribution – to private monopolies.” “By promoting speculative electricity markets, the Bill turns electricity, a basic human need, into a tradable commodity. Such regulation would lead to price volatility, unreliable supply and weakening of public control over energy security,” Sen said.The objective of the bill is to make the power sector competitive. Competition provides choices to consumers, lowers prices and provides them with the best services. It clearly states “lack of competition In electricity supply, consumers are 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. This is the logic driving this bill. If multiple companies can supply electricity to the same area, they will compete to keep consumers happy.But it doesn’t always go so neatly. In some sectors, competition worked early on, such as telecommunications. More players entered, prices fell and services improved. But with time, the same competition went out of the field. What started as a crowded market eventually narrowed down to a handful of major players. Similarly, the privatization effort of Air India was initially welcomed, but the recent IndiGo crisis exposed the dangers of monopoly in the system.That possibility exists here also. Even if multiple electricity distributors enter the same area, the market may not always be crowded. It may settle around some big companies. And even when that happens, competition may force better service, but it doesn’t necessarily guarantee cheaper electricity.
How successful have been the privatization steps?
If the idea is to bring in private players to fix distribution, India has already tried it – just not on a large scale. Discoms sit at the very end of the power chain, responsible for delivering electricity to households and collecting payments. In fact, they are monopolistic retailers in their sectors. And yet, despite their central role, most state-run discoms have been grappling with losses, inefficiencies and rising debt for years. Privatization has often been offered as a way out of this cycle.In practice, only a few states have followed that path. Odisha was one of the first to try in the late 1990s, but the initial effort was not successful and had to be withdrawn. Delhi’s experience in 2002 is often held up as a benchmark. After disbanding its electricity board and bringing in private operators, results started becoming visible at the grassroots level – losses in the system reduced rapidly. Aggregate technical and commercial (AT&C) losses, which once ranged from 45-60%, have declined over time to less than 6.5%. This is a significant improvement, especially when the national average is still around 15%.But this is only part of the story. As research and analysis from the Center for Social and Economic Progress shows, while efficiency improved and supplies became more reliable, the financial picture remained complex. Tariffs continued to be tightly regulated, and disagreements between the regulator and discoms over cost approvals became routine. A large portion of the expenses claimed by the discoms were not always allowed to be recovered through tariffs, leading to the creation of “regulatory assets” – essentially costs deferred to the future. In the case of Delhi, this has reached thousands of crores of rupees, with disputes dragging on for years in tribunals and courts.And this is where the limitations of privatization become visible. Bringing in private operators may fix operational problems – like reducing theft or improving billing – but it doesn’t automatically solve deeper structural problems. Questions related to tariff-setting, cost recovery and regulatory oversight do not disappear. In fact, if anything, they become more conflicted. The result is a system where efficiency gains coexist with financial uncertainty – and where, ultimately, the consumer may still have to bear the costs.Perhaps that is why most states are in no hurry to follow Delhi’s path. Government-run discoms still dominate the landscape, and private participation is limited. The broader lesson of the last two decades is quite clear—privatization can improve the way electricity is distributed, but in itself, it does not guarantee a financially stable system. It depends just as much on how the sector is regulated – and how those regulations are enforced.
