Electricity Amendment Bill 2025: Why farmers, workers and states are resisting

Nearly 2.7 million workers are preparing for nationwide strike— Triggered by one move: the introduction of the Electricity (Amendment) Bill, 2025 in Parliament. These are not just ordinary workers, but the people who keep the nation’s electricity running – engineers, linemen and workers throughout the electrical system. The Center is yet to table the bill in Parliament.The unrest was already visible earlier this month when workers at several state power boards went on strike in protest.Opposition is not limited to labor. Farmer unions have also raised concerns, indicating that resistance to the bill spans across sectors. However, the government sees the draft Electricity (Amendment) Bill, 2025, as a long overdue reform aimed at making the power sector more competitive, efficient and better able to meet future needs. At its core is a key shift: allowing multiple distribution companies to operate in the same area, using shared infrastructure while maintaining the obligation to deliver electricity to all consumers.But it’s not as simple as a switch, a lightbulb and a wave of happiness. For Kaveri Amma, the arrival of electricity was like a silent miracle—simple, shared, and powered by a single supplier, lighting up the entire village.But if Kaveri Amma were alive today, this simplicity would no longer hold true. Power will still come at the flip of a switch—but there won’t be just one Shah Rukh Khan-like figure pulling the strings. It could be that multiple companies share the same wires, competing to provide power to the same home.This shift is at the heart of the Electricity (Amendment) Bill, 2025. “Privatize!”– Power workers, farmers and unions have been pushing back against the term. The Center has been trying to amend the electricity law for more than a decade, but every attempt has been met with resistance.The opposition is not only targeting the bill, but also the way it is drafted. A working group set up by the power ministry in January 2026 finalized the bill but faced criticism from the power sector all india federation of electrical power engineersthe group flagged the All India Telecommunications Association’s inclusion, saying it showed a leaning toward privatization and sidestepped workers’ concerns.

But privatization is not the only concern. The bill could change something more immediate — who delivers power to consumers and how much they end up paying.Here’s the thing, the Indian power industry is at an interesting crossroads. Electricity usage is climbing steadily—more appliances, more electric vehicles, more data centers quietly running in the background. Currently, the system is catching up. In 2025, the country will reach a record peak demand of more than 240 GW and total installed capacity will exceed 500,000 MW. Even more striking is the shift in the energy mix—more than half of production capacity now comes from non-fossil energy sources. On the surface, it looks like an industry that is expanding, modernizing, and even getting cleaner.But behind this growth story lies a more complex reality. Providing electricity to your home still depends on a vast and expensive network – generation, transmission and ultimately distribution. And this last stop is still under the greatest pressure. State-run distribution companies (discoms) have historically struggled with mounting losses. In fact, it was only recently, after years of deficits, that they collectively issued a modest profit It will be approximately Rs 2,700 crore in 2024-25. To put things in perspective, the industry’s losses were over Rs 25,000 crore a year ago and nearly Rs 68,000 crore a decade ago. It’s a shift, but a fragile one, still based on low tariffs, delayed subsidies and persistent inefficiencies.This gap between the fast-growing power system and financially strapped distributors is what the government is trying to address through the Electricity (Amendment) Bill, 2025. Versions of it have appeared several times over the past few years. But the theme remains the same: introduce competition, allow multiple companies to supply power in the same area, and give consumers more choice while pushing the system to become more efficient, at least in theory.

Why are farmers opposed?

A focus of the proposed reforms is tariff reform and efficiency. The government said the bill would move to cost-reflective tariffs while continuing to provide targeted subsidies through the state budget for vulnerable groups such as farmers and low-income households. But the farmers’ unions don’t buy it. In India, some states provide free or subsidized electricity to farmers. The entry of private players will eventually make state-run distributors inefficient, forcing farmers to pay to choose private suppliers.

Railway roko protest by Kisan Mazdoor Morcha

Center and state issues

Another deeper question is who calls the shots. Currently, electricity distribution is primarily the responsibility of the states. Each has its own utility, as well as a degree of control over tariffs and subsidies – often used as policy levers and sometimes as political commitments.The concern is that this balance may shift. If a central regulator or new private players enter the system and gain greater control, states may find themselves with less say in how electricity is priced and who receives electricity subsidies. For many, it’s not just a management adjustment, but the loss of a critical tool they’ve relied on for a long time.These concerns are not limited to policy. They also extend into the world of work. With more private involvement, there are concerns about outsourcing, the restructuring of state-owned utilities and the potential for job losses across the industry – especially for the workforce now leading the protests.Center of Indian Trade Unions (CITU) vice-president Tapan Sen said: “Privatization and open access will lead to mass unemployment, contractualization and outsourcing. By allowing private license holders to enter the defense zone, the bill also jeopardizes national security in the name of ‘ease of doing business’.”

What about consumers?

In India, electricity is a politically sensitive topic. Elections in India are won on promises of free or subsidized electricity. The commodification of this subject thus fuels debates about the welfare state.“The bill is part of a wider neoliberal strategy to hand over the entire electricity supply chain – from generation to distribution – to private monopolies,” CITU said. “By promoting speculative electricity markets, this bill transforms electricity – a basic human necessity – into a tradable commodity. Such deregulation will lead to price volatility, supply unreliability and the erosion of public control over energy security,” Sen said.The bill aims to improve the competitiveness of the electricity industry. Competition provides consumers with choices, lowers prices and provides them with the best service. It clearly states that “lack of competition When it comes to electricity supply, consumers are tied to a single distribution system, limiting service quality and innovation. “On paper at least, the promise is simple: More competition means more selection, better service and lower prices. This is the logic driving this bill. If multiple companies can provide electricity in the same area, they will compete to keep consumers happy.But things don’t always go smoothly. In some industries, competition initially played a role, such as telecommunications. More players join, prices drop, and service improves. But over time, competition for the same diminished. What was initially a crowded market eventually narrowed down to a handful of dominant players. Similarly, efforts to privatize Air India were initially welcomed, but the recent IndiGo crisis exposed the dangers of duopoly in the system.This possibility exists here as well. Even if several power distributors enter the same area, the market may not remain crowded forever. It can be solved around a few large companies. When that happens, competition may still drive better service, but it won’t necessarily guarantee cheaper electricity.

How successful have the privatization initiatives been?

If the idea is to bring in private players to solve the distribution problem, India has already tried it, just not on a large scale. Distribution companies are at the end of the power chain and are responsible for delivering electricity to homes and charging them for it. In fact, they are monopoly retailers in their respective fields. Yet despite their central role, most state-owned telecoms companies have struggled for years with losses, inefficiencies and mounting debt. Privatization is often considered a way out of this cycle.In fact, only a handful of states have gone down this path. Odisha was one of the first regions to try it in the late 1990s, but the initial attempts were unsuccessful and had to be cancelled. The 2002 Delhi experience is often considered a benchmark. After breaking up the electricity board and bringing in private operators, the practical effects were clear – system losses dropped dramatically. Over time, total technology and commercial (AT&C) losses, once as high as 45-60%, fell below 6.5%. That’s a significant improvement, especially when the national average still hovers around 15%.But that’s only part of the story. As a research analysis by the Center for Social and Economic Progress points out, although efficiency has improved and supply has become more reliable, the financial situation remains complex. Tariffs continue to be heavily regulated and disagreements between regulators and distributors over cost approvals have become the norm. Much of the costs claimed by telcos are not always recoverable through tariffs, leading to the accumulation of “regulatory assets” – essentially costs deferred to the future. In the Delhi case, such losses have run into tens of thousands of rupees and disputes between tribunals and courts have been going on for years.This is where the limitations of privatization begin to show. Bringing in private operators may solve operational problems, such as reducing theft or improving billing, but it does not automatically solve deeper structural problems. Issues surrounding tariff setting, cost recovery and regulatory oversight have not gone away. In fact, if anything, they have become more controversial. The result is a system where increased efficiency coexists with financial uncertainty, with costs that may still have to be borne by the end consumer.This is perhaps why most states are not rushing to follow Delhi’s path. Government-run distribution companies still dominate and private participation remains limited. The broader lesson of the past two decades is quite clear – privatization can improve the way electricity is delivered, but it does not by itself guarantee the stability of the financial system. This again depends on how the industry is regulated and how those rules are enforced.