Lights On: India Pushes for National Private Power Distribution

India is preparing for a significant reform in its power sector, with plans to open the retail electricity market to private players nationwide, according to a draft bill from the Union Ministry of Power.

Currently, electricity distribution is largely dominated by state-run distribution companies (discoms), many of which face chronic financial stress and rising debt burdens. As of June 2025, state utilities collectively owed approximately USD 6.78 billion to power generators—putting pressure on sectoral liquidity and impeding credit flow.

The proposed reforms would allow private companies such as Adani Enterprises, Tata Power, Torrent Power, and CESC—currently operating in select privatised regions like the National Capital Region, Odisha, Maharashtra, and Gujarat—to expand their distribution operations across the country.

A key feature of the proposal is the introduction of multiple private distributors within the same region, a major shift from existing norms under the Electricity Act, which typically grants distribution monopolies in a given area.

The initiative aims to:

Increase competition, Improve service quality and efficiency, Modernise power distribution infrastructure, Reduce the financial burden on government utilities

If implemented, the reform could reshape India’s electricity market and pave the way for greater private sector participation and consumer choice.

News by Rahul Yelligetti.