Page 62 - Policy Economic Report - Jan 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

With the various new provisions, the Draft NEP 2026 provides a comprehensive blueprint for
a future-ready, financially viable and environmentally sustainable power sector to provide reliable and
quality power at affordable price to meet the goals of Viksit Bharat @ 2047.

Electricity Amendment Bill, 2025

Central Government has issued the draft Electricity (Amendment) Bill, 2025, proposing comprehensive
reforms in the power sector. The draft Bill seeks to take measures for financial sustainability, promote
competition, strengthen regulatory accountability, and accelerate India’s transition towards non-fossil
fuel–based electricity generation, in alignment with the vision of Viksit Bharat @ 2047. The key reforms
proposed are outlined below:

i. Financial Viability: The financial sustainability of distribution licensees is critical for reliable and
affordable electricity. The proposed amendments mandate cost-reflective tariffs, empower Commissions
to determine tariffs suomotu effective 1st April each year.

ii. Economic Competitiveness: High industrial tariffs, cross-subsidies, and rising procurement costs have
weakened industrial competitiveness. The proposed reforms aim to rationalise tariffs, unlock demand,
reduce costs, and enhance India’s economic productivity and global competitiveness.

iii. Energy Transition: To achieve 500 GW of non-fossil capacity by 2030, the amendments propose
empowering CERC to introduce market-based instruments to attract investment and accelerate
renewable capacity addition. Enforceable non-fossil energy obligations are also proposed to align the
Electricity Act with the Energy Conservation Act.

iv. Ease of Living and Ease of Doing Business: The amendments propose uniform national standards of
service to improve supply quality and accountability. Consumer-friendly measures include capping
assessment for unauthorised use to one year, and reducing appeal pre-deposit requirements.

v. Regulatory Strengthening: To enhance accountability and efficiency, it is proposed that Governments
may refer complaints against CERC and SERC Members, with expanded grounds for removal. A 120-day
timeline is proposed for adjudicatory decisions, and the strength of APTEL is proposed to be increased to
address pendency.

vi. Other Reforms: Powers for installation and maintenance of electric lines are proposed to be
transitioned from the repealed Telegraph Act, 1885 into the Electricity Act, 2003, with States framing
compensation framework. To reduce network duplication and costs, distribution licensees are proposed
be permitted to supply electricity through shared networks, subject to regulatory approval and charges.

Upon enactment, the provisions of the Electricity (Amendment) Bill, 2025 shall apply uniformly across all
States, including Maharashtra.

Subsidies for specified consumer categories including tribal households may continue to be transparently
funded by the State Government under Section 65, without compromising the financial sustainability of
power sector.

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