Power Sector Reform: Draft electricity (Amendment) bill, 2025, to boost efficiency

On October 9, 2025, the Ministry of Power released the Draft Electricity (Amendment) Bill, 2025, seeking feedback from stakeholders, including State Governments.

- Madhusudhanan S

The Bill aims to enhance regulatory accountability, promote sustainable energy, and strengthen financial viability—laying the groundwork for a transformative shift in India’s power sector.

India’s vision of becoming a developed economy by 2047 (“Viksit Bharat”) rests on a strong, sustainable, and competitive energy framework. To achieve this, the Draft Bill proposes major amendments to the Electricity Act, 2003—addressing longstanding inefficiencies, financial distress, and structural challenges while accelerating the energy transition.

This article explores the key provisions of the Draft Electricity (Amendment) Bill, 2025, its expected impact on consumers, and the broader implications for India’s power sector.

Powering Viksit Bharat: Inside the Draft Electricity (Amendment) Bill, 2025

For India to achieve its Viksit Bharat goals, the power sector must balance affordability, reliability, and sustainability. The proposed amendments aim to ensure universal access to clean and affordable electricity, financial stability, and a just energy transition.

The Draft Bill notes:

“Despite major structural reforms under the Act—such as unbundling of utilities, competition, and open access—the distribution segment continues to face severe financial stress, with cumulative losses exceeding ₹6.9 lakh crore.”

High industrial tariffs due to cross-subsidies have weakened industrial competitiveness, while regulatory delays have eroded financial discipline. The Bill therefore seeks to improve sectoral efficiency, enhance accountability, and align policy with India’s clean energy commitments.

Major Provisions of the Draft Electricity (Amendment) Bill, 2025

1. Financial Viability and Tariff Reform