The sector opened to private investment decades ago, yet distribution remains dominated by debt-laden state discoms, slowing growth and efficiency
Political subsidies have burdened discoms with unpaid dues of ₹7 trillion, undermining financial stability despite multiple bailout packages
Draft amendments require tariffs to reflect actual costs, while states can provide upfront subsidies to targeted groups, ensuring transparency
Manufacturing, railways, and metro systems may soon be freed from cross-subsidies, lowering logistics costs and boosting competitiveness
Distribution licensees can use shared networks, ending monopolies and enabling competition, better service, and consumer choice
By combining cost-reflective tariffs, open access, and targeted subsidies, the amendments could resolve decades-old sector inefficiencies