Draft Electricity Bill Allows Power Retail Sector To Private Companies

New Delhi, Oct 10 (KNN) The Indian government has proposed a major reform in the power sector by allowing private companies to enter the electricity retail market, according to a draft bill released by the Ministry of Power. 

The move aims to introduce competition, enhance service quality, and improve efficiency in electricity distribution, which has so far been dominated by state-run utilities.

If implemented, the new law would permit private players such as Adani Power, Tata Power, Torrent Power, and CESC to sell electricity directly to consumers. 

 Currently, most retail distribution is handled by state-owned discoms (distribution companies), which face challenges such as high transmission losses, delayed subsidy payments, and mounting debts.

The draft bill seeks to end the regional monopoly of state discoms by enabling multiple suppliers to operate within the same area. 

Consumers would be able to choose their electricity provider, similar to how telecom users can choose mobile networks. 

The government expects that competition among retailers will lead to improved service, greater reliability, and possibly more affordable tariffs.

However, the proposal also raises concerns about implementation challenges. Regulators will need to ensure equal access to the power grid for all suppliers, protect small consumers, and manage cross-subsidies that help maintain affordable rates for low-income households. 

Experts have also emphasised the need for strong oversight to prevent market manipulation and ensure fair competition.

If passed, this reform could mark one of the biggest transformations in India’s energy landscape, fostering private investment and paving the way for a more dynamic, consumer-driven electricity market.

(KNN Bureau)