Punjab ‘silent’ on Centre’s draft electricity amendment bill as unions warn of ‘roadmap to privatisation’

Lapsed deadline

Sources confirmed that the detailed objections, drafted after internal approval, included clause-wise comments and warnings from the Punjab State Electricity Board Engineers’ Association (PSEBEA), but the document remained pending in the Punjab State Power Corporation Limited’s (PSPCL) office even as the deadline passed. This has triggered strong criticism from unions, who allege that the state’s silence indicates tacit support for amendments they believe will accelerate large-scale privatisation of electricity distribution.

The PSEBEA claimed that the proposed amendments would dismantle India’s public electricity framework, hand profitable segments to private players, erode federal powers of states, and threaten the livelihoods of employees. The Association noted that similar proposals in 2014, 2018, 2020, 2021, and 2022 were withdrawn after widespread resistance from farmers, employees, and consumers. It argued that the new draft reintroduces the same provisions despite the Centre’s own admission that 22 years under the Electricity Act, 2003, have seen distribution losses rise from Rs 26,000 crore to Rs 6.9 lakh crore.

A central concern raised by PSEBEA is that the amendment to Section 14 would allow multiple distribution licensees in the same area using the same network, enabling private companies to cherry-pick lucrative industrial and commercial consumers. Public distribution companies (DISCOMs), they warned, would be left serving low-revenue rural and domestic consumers, weakening cross-subsidies and increasing tariffs for households and agriculture. Section 43(4) of the Bill would permit consumers above 1 megawatt (MW) demand to shift to private suppliers, further reducing state DISCOM revenue while they remain obligated to maintain backup contract demand. The Association said private entities would be able to avoid universal service obligations and refuse unprofitable consumers.

PSEBEA also cautioned that separating “content and carriage” without creating an independent distribution system operator would lead to conflicts of interest, discrimination risks, and heavy regulatory burdens on understaffed State Electricity Regulatory Commissions (SERCs). It warned of disputes over cost sharing, consumer confusion during outages, litigation, and challenges in ring-fencing accounts. Concerns around centralisation were also highlighted, including provisions that expand the Centre’s powers over standards, appointments, renewable targets, and rule-making, which PSEBEA said would weaken India’s federal structure.

Amendments related to renewable purchase obligations (RPOs) under Section 42(2) were criticised for setting low penalties that could freeze India’s carbon market by effectively pricing carbon dioxide (CO₂) at only $5-7 per tonne. Provisions expanding the role of over-the-counter (OTC) electricity trading platforms were flagged as risky due to possibilities of market manipulation, opaque pricing, and regulatory capture, particularly after recent investigations involving the Central Electricity Regulatory Commission (CERC).

Farmer unions’ stance

Farmer unions under the Samyukta Kisan Morcha (SKM), Kisan Mazdoor Morcha (KMM), and SKM (non-political) have been opposing the amendments. SKM had demanded that the Punjab government convene a special Vidhan Sabha session to pass a resolution against the Bill, but no such step was taken.

“SKM had even asked the Punjab government to call a special Vidhan Sabha session to pass a resolution against the amendments and send them to the Centre. But nothing of that sort happened,” said Jagmohan Singh Patiala, National Coordination Committee Member, SKM. Union leaders argued that the amendments would pave the way for privatisation and ultimately end subsidies for domestic and agricultural consumers.

As of now, in Punjab, agriculture consumers are getting free power, while 300 units per month are free for domestic consumers, irrespective of the income bracket.

Rising resistance

“Employees of PSPCL – both regular and contractual – are also protesting the Bill, saying it is a direct roadmap toward privatisation,” said Balihar Singh, president, Outsourced PSPCL Contractual Employees Association.

“With the state government remaining silent, resistance from engineers, employees, and farmer unions is intensifying, setting up a new challenge for PSPCL at a time when they are already facing opposition from the employees after suspension of a chief engineer and termination of the director (generation),” said a PSEBEA member.