The story so far: Ignoring the objections of the Opposition, the Samyukt Kisan Morcha (SKM) and the trade unions, the Union Power Ministry introduced the Electricity (Amendment) Bill, 2022 in Lok Sabha on August 8. Union Power Minister R.K. Singh said at the stage of introduction that the Bill could be moved to the Energy Standing Committee of Parliament for broader consultations. “My simple submission is that this entire matter will be discussed in the Standing Committee and the Standing Committee has representatives from all the parties,” Mr. Singh said. The Opposition questioned the introduction of the Bill. They alleged that the Centre is breaching the promise given to SKM that the Bill will not be brought to Parliament. The Opposition MPs said the Bill is not just anti-farmer, but also anti-constitutional and against the interest of States. The basis of their argument was that the Bill may lead to ending subsidies for farmers and poor consumers.
What is the history of the Bill?
The Electricity Bill was brought for the first time and passed in Parliament in 2003, when A. B. Vajpayee was the Prime Minister. The intention was to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity. The Act also offered to protect the interest of consumers and supply of electricity to all areas, rationalisation of electricity tariff, transparent policies regarding subsidies etc. The Act resulted in privatisation of distributing companies. It was amended in 2007 by the UPA Government, apparently under pressure from the Left parties. The provisions for “cross subsidy” — ensuring subsidy to poor households was added to the Bill in 2007. There were attempts to amend the Bill further in 2014, 2017, 2018, 2020 and 2021. While the 2014 Bill was cleared by the Standing Committee on Energy, it could not be passed in the House as the Centre wanted to revise it. None of the other draft Bills came to Parliament as the Centre was not satisfied with the primary response it received after consultations with stakeholders. All of those Bills remained in their draft form.
Why is there opposition to the Bill?
The opposition to the Bill is primarily from farmers’ groups as they fear that the Bill will lead to stopping subsidies 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. When the Central trade unions started a campaign against the Act, the SKM pledged support. The Opposition parties questioned the Bill on federalist principles. RSP MP N. K. Premachandran said in the House that power or electricity is a subject which comes under the Concurrent List of the Constitution, and that the Centre should have consulted the States before bringing the Bill. Congress MP Manish Tewari said the Bill paves way for privatisation of profits and the nationalisation of losses. DMK’s T.R. Baalu asked what will happen to poor farmers who are getting subsidised power in States like Tamil Nadu.
What are the main amendments to the Act?
Compared to the drafts of 2020 and 2021, the Electricity Act (Amendment) Bill of 2022 has a number of changes. The main change among them could be the proposal for the Centre’s intervention in the area of power distribution, a domain under the State governments. Such provisions can be seen in clauses 5, 11, 12, 13, 15 and 23 of the Bill. Clause 5 amends Section 14 of the parent Act that deals with the criteria for electricity distributors. The amendment empowers the Central Government to prescribe the criteria.
Another clause that causes worry for those who oppose the Bill is Clause 11, which seeks to amend section 42 of the principal Act to facilitate operation of multiple distribution licensees in the same area and to avoid parallel network and optimise usage of the distribution network. Trinamool Congress MP Saugata Roy said such a provision will create a situation similar to the telecom sector where monopoly companies will destroy the public sector and smaller networks.
Similarly, 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. It says in case of issuance of licence to more than one distribution licensee in an area of supply, the State Government shall set up a cross subsidy balancing fund which shall be managed by a government company.
What lies ahead?
The trade unions in the power sector held a one-day strike against the Bill. They are also discussing the possibilities for an indefinite strike. The SKM is also stepping up its agitations. The Energy Standing Committee will soon start its deliberations on the Bill. The panel is currently headed by senior JD(U) MP Rajiv Ranjan Singh Alias Lalan Singh. JD(U) called off its alliance with the BJP on Tuesday. Though the BJP can claim a majority in the committee, the chairman’s stand will be important when Bills like this are taken up for discussion.