Govt Removes 4 Clauses From Electricity Bill Draft 2021 Amidst Criticism

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According to senior officials in the power ministry, the Union government has removed at least four major clauses from the draft Electricity (Amendment) Bill, 2021 after gaining criticism from various stakeholders, including farmers, state-owned power distribution firms (discoms), and power utility staff associations under the flag of National Coordination Committee of Electricity Employees and Engineers (NCCOEEE).


The Centre has removed the provision of direct benefit transfer (DBT) on power subsidies from the proposed bill, provision of creating a new “Electricity Contract Enforcement Authority” that was presumed to adjudicate on contracts. 


The idea of distribution sub-licensee has also been forsaken. The Single-Selection Committee for the appointment of the Chairman and Members of the SERCs and CERCs has likewise been abolished. The selection procedure will continue in accordance with the Act’s current provisions.


Many states, like West Bengal, have been vocal in their opposition to these clauses, claiming that they violate the spirit of Federalism and usurp state power.

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The draft bill’s inclusion of the DBT system for power subsidies could have had the most detrimental effect on end-consumers, who would have had to pay the unsubsidized bill to discoms first, with state governments then obligated to remunerate subsidies directly to consumers.

Farmers were vehemently opposed to this clause. Currently, states give a variety of subsidies to consumers, nearly entirely in the agricultural and below-poverty-line (BPL) segments.

In accordance with senior authorities, the bill is unlikely to be introduced during the current session of Parliament. This is due to an agreement reached between the Centre and Samyukt Kisan Morcha (SKM), one of the key farmer unions, The government will now discuss the Electricity (Amendment) Bill 2021 with farmers before it is presented in Parliament.

The existing distribution firms will continue to function in the same manner as before, their structure has not been altered, said a senior power ministry official.

Delicensing the industry will allow many distribution companies to operate in the same area of supply, resulting in consumer competition and choice. Only registration with the competent commission will be required, the source added.

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Union power minister RK Singh, defining the significance of the electricity amendment bill, informed Parliament on December 9 that the position of most discoms was of “grave concern,” as the cumulative revenue losses of all discoms in the country had increased to 5,07,416 crore. 

The overdue to renewable generators amount to almost 11 months of revenue.

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