Draft Bill for cost-reflective power pricing

Proposes rationalising high industrial tariffs

- SUDHEER PAL SINGH

In a major step towards power-sector reforms, the government has proposed amendments to the Electricity Act that would make cost-reflective tariffs mandatory, rationalise high industrial rates, and exempt railway systems and manufacturing companies from the burden of cross-subsidies.

The idea is to establish a robust and forward-looking legal framework that addresses the financial stress of power distribution companies, which are facing losses of over ₹6.9 trillion, while curbing high industrial tariffs that, according to the government, have affected competitiveness, constrained economic growth, and slowed the transition to clean energy.