The uproar over the Electricity (Amendment) Bill, 2022

The uproar over the Electricity (Amendment) Bill, 2022

#GS-02 Governance

For Mains

About Electricity Act

  • The Electricity Act was passed by the parliament in 2003 with the aim to protect the interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, transparent policies regarding subsidies.
  • It also resulted in privatization of distributing companies.
  • The act was amended in 2007 to allow subsidising electricity for poor families.


What are the changes in the new amendment:

  • Center can intervene in the domain of power distribution which used to be part of states authority.
  • Clause 11 of the amendment seeks to amend section 42 of the principal Act and to facilitate operation of multiple distribution licensees in the same area and to avoid parallel network and optimise usage of the distribution network. This has created fear that the public DISCOMs will face intense competition from private companies and may end up loss.
  • Clause 13 seeks to amend section 60 of the principal Act to enable management of power purchase and cross subsidy in case of multiple distribution licensees in the same area of supply. In case of issuance of license to more than one distribution licensee in an area of supply, the State Government will have to set up a cross subsidy balancing fund which shall be managed by a government company.


What are the concerns regarding the proposed amendment:

  • Farmers groups oppose the bill due to the fear that the Bill can result in the end of subsidised electricity and that power distribution will thereafter be under the control of private companies.
  • The workers in the power sector also oppose the Bill citing that privatisation of distribution companies and generating units will result in job losses.
  • The various state governments have accused center of violating federalist principle since electricity is in the concurrent list and hence states should have been consulted.