India prepares for a change in the Electricity sector

New Delhi, June 25, 2020: R. K Singh, Minister
of State (i/c) for Power & MNRE,
today held a Press Meet through
Video Conferencing and underlined
the importance of the proposed
reforms in the power sector, dispelling
doubts and misinformation.
He stated that the reforms are
steps in the direction of making the
sector consumer centric as we are
all here to serve them.
Singh said, “ We are not taking
away any powers of the States in
appointment of members and chairpersons
of State Electricity Regulatory
Commissions (SERCs). The
proposed reforms are aimed at promoting
more transparency.”
While giving clarity on electricity
tariff fixation, the Union Power
Minister stated that the powers of
tariff fixation remains with SERCs.
He emphasised that the proposed
power reforms are aimed at introducing
transparency and accountability
to protect the interest of consumers
and ensuring a healthy
growth of the power sector.
He also mentioned that there is no
restriction on States for providing
subsidy as States can give as much
subsidy as they want but they must
pay it upfront through Direct Benefit
Transfer(DBT) so that Discoms
remain healthy and are able to maintain
and improve distribution infrastructure
like transformers and distribution
lines, pay for power purchased
and are able to provide quality
electricity to the people.
It may be stated that Electricity is
one of the most critical components
of infrastructure which is essential
for sustained growth of the economy
of the country.
While India has made significant
improvements in the electricity generation
and transmission segments,
the distribution segment, having
achieved 100% village electrification
and near-universal access to
electricity is beset with problems of
operational inefficiencies, liquidity,
and financial solvency.
In this regard, the Ministry of
Power had prepared a draft proposal
for Amendments in the Electricity
Act 2003 in the form of draft Electricity
(Amendment) Bill 2020 with
the broad objectives of ensuring
consumer centricity, promoting ease
of doing business, enhancing sustainability
of the power sector and
promoting green power
However, some canards and misconceptions
are being spread
regarding some of the proposed
amendments to the Electricity Act.
It is important to place the correct
position pertaining to them.
Addressing the misconsptions he
said that there is no proposal to
transfer the power of appointment to
SERCs from the State to the Central
He clarified that there was no proposal
to take away the power of
appointment of Members/Chairpersons
of State Electricity Regulatory
Commissions from the State Governments.
As per the draft circulated the
appointments of Members/Chairpersons
of the State Electricity Regulatory
Commissions will continue to
be made by the State Governments.
The Selection Committee currently
has equal number of members
from the Central and State Government
– one member from Central
Government and one from State
The only difference proposed
Selection Committee is that instead
of the Selection Committee being
presided over by a retired Judge of
the High Court, it is proposed that
the committee be headed by a sitting
Judge of the Supreme Court.

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