From Free Power to Fair Power

Needonomics Perspective on the Draft Electricity (Amendment) Bill 2025 Balancing Welfare with Wisdom for Sustainable and Equitable Energy Governance

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Needonomics School of Thought (NST) believes that the Draft Electricity (Amendment) Bill 2025 offers a timely and crucial opportunity to reform India’s power sector—provided it is debated with an open, ethical, and forward-looking mindset. At the heart of this reform lies a fundamental shift: the transition from free power to fair power, guided by the Needonomics principle of “economics of needs, not greed.”

This approach calls for reorienting the energy policy from populist giveaways to purposeful governance—where subsidies are rational, consumers are responsible, and sustainability is central.

1 Pitfalls of Power Subsidies

For decades, power subsidies have been politically attractive but economically destructive. Initially designed to support farmers and vulnerable communities, blanket subsidies have over time distorted electricity prices, encouraged over-consumption, and deepened fiscal imbalances.

State governments continue to carry the heavy burden of unpaid dues to distribution companies (DISCOMS), many of which operate under persistent financial stress. When electricity becomes “free,” it often loses its perceived value, leading to wasteful use and erosion of accountability.

Nowhere is this clearer than in the over-extraction of groundwater in states like Punjab and Haryana, where free electricity for agriculture has resulted in severe ecological and hydrological crises. What began as a welfare measure has, unfortunately, evolved into an unsustainable economic and environmental model.

2 Needonomics: Ethical Alternative