Indian states oppose govt’s new Electricity Bill to be placed in the parliament

The government is planning to table the newly drafted Electricity Bill reforms in the parliament this monsoon session. But several states, mostly the opposition-ruled ones, are opposing it. Maharashtra, West Bengal, Tamil Nadu, Kerala have voiced their reservations against the amendments made to the Electricity Act, 2003.

In April this year, the Centre had unveiled the first set of draft amendments to the Electricity Bill, 2003 and had asked the states to submit their comments. Major amendments included an end to subsidised power rates replacing it with ‘direct benefit transfer’ (DBT) of subsidy, reduction of cross-subsidy burden on industrial consumers, new contract enforcement authority and new selection process for existing state electricity regulatory commissions (SERCs).

With this, the Centre has ended the monopoly of existing power distribution companies (discoms), which are mostly state-owned entities, throwing open distribution to private discoms.

This change has become a major bone of contention between the Centre and states. With the changes suggested in the Electricity Act, several states have now started attacking the Centre citing the federal structure of the electricity sector, wherein generation and transmission comes under Centre and distribution is state subject.

In a recent letter, West Bengal Chief Minister Mamta Banerjee wrote to the prime minister that states were not consulted during the process of the amendments.

“Power is too important a sector for such unilateral interferences, especially when ‘electricity’ as a subject is in the Concurrent List of the Constitution of India and any legislation on a subject in such a list needs serious prior consultation with the states. In the present case, there has been some tokenism of consultations, but no real exchange of views, which is antithetical to the federal structure of our polity,” she said in her letter.

She also further said, the approach suggested in the proposed Bill would result in concentration of private profit-focused utility players in the “lucrative urban-industrial segments, while poor and rural consumers would be left to be tended by public sector discoms.” West Bengal has a private power discom CESC (promoted by R P Goenka group) in some parts of capital city Kolkata.

Shiv Sena MP Sanjay Raut also said on Monday, states were not consulted on the provisions of the Electricity (Amendment) Bill and it is not in the interest of the country. “The provisions ring a danger bell for state electricity companies. Our party is holding consultations in this regard,” he said. In Maharashtra, Mumbai has two private discoms – Tata Power and Adani Electricity.   Last year in July, during the Power Ministers’ conference, Bihar, which is a BJP ally state, opposed the proposal for privatisation of power distribution as it feared there will be an increase in the power rates. Tamil Nadu, Odisha, Kerala protested against several provisions of the Bill, then.

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