Amendment to the Electricity Act will only increase crony capitalism: Arvind Kejriwal

New Delhi: Chief minister Arvind Kejriwal came down heavily on the Modi Government’s proposed amendment to the Electricity Act 2003 on Saturday during a press conference.

Calling the proposed amendments anti-people and anti-federal, which would lead to sharp hike in electricity bills of common man, chaos and states losing control over electricity sector, he said that the amendment is being brought in to benefit ‘selected’ private companies and will only increase crony capitalism.

“The Delhi Government has been providing cheapest electricity to its people and uninterrupted power supply for the last three and a half years. The Delhi model of electricity has been providing the citizens with the cheapest power throughout the country, and there has been no tariff hike in the last three years. This has been made possible because today, the state government takes most decisions with respect to energy sector,” read a statement released by the Delhi government.

The proposed amendment bill would put an end to cross-subsidy, injecting a steep two-to-five times hike in the power tariff across the board, so that even the middle class, let alone the farmers and poor, would find it difficult to afford electricity, he charged at a press conference at his residence.

[box type=”shadow” align=”aligncenter” class=”” width=””]· Proposed amendment to the Electricity Act 2003 anti-people: CM

· Amendment aimed at rendering states powerless in energy sector: CM

· Elimination of cross subsidy and introduction of speculative trading to hit common man, make their bills unaffordable: CM

· It aims to benefit ‘selected’ private players, increase crony capitalism and monopoly: CM

· Police given draconian powers, which will lead to harassment and corruption: CM[/box]

“This amendment Bill is expected to be passed in the winter session of Parliament, just a few months before elections. Why is Central government doing this? What is the tearing hurry? Why can’t Centre wait for elections to get over and let next government take a decision? These amendments are expected to give complete control over entire power sector to the central government to the total exclusion of state governments. Centre will be able to give benefits to the power companies close to them. Timing of these amendments is suspicious. It is rumoured that these power companies would return favours by providing funds for elections,” said CM Kejriwal.

Power tariffs of small and medium domestic consumers will increase at least two to three times immediately all across India, stated the chief minster.

After this amendment, there will be just one rate of electricity for all consumers irrespective of load, consumption or type of consumer. It is proposed to reduce cross subsidy to 20% immediately and progressively eliminate it within three years. (Section 61(1))

This would lead to huge increase in tariffs all across the country immediately for small and medium domestic consumers as well as farmers, who account for nearly 90% of all consumers.

The amendments say that if states want, they could give direct subsidies. If states were to bear the burden of cross subsidies, it would hugely increase the subsidy burden of states. The state governments already have stressed budgets. States are just not in a position to provide such huge subsidies. (Section 45)

For the first time, the amendments also introduce forward and futures trading in electricity sector. This will have very damaging impact on entire sector as it would lead to huge speculative trading and consequent increase in tariffs. (Section 66)

Overall, it is expected that power tariffs will increase two to three times for small and medium domestic consumers immediately. The increase in electricity bills of farmers will be quite steep and backbreaking. However, the tariffs for commercial, industrial and rich consumers will come down sharply.

The statement released by the AAP state government also said that the proposed amendment would render the state governments powerless as far as the electricity sector is concerned. All powers are proposed to be vested with the centre, which is a gross violation of the basic federal structure of the constitution. The amendments give power to Centre to issue power tariff policy, which will be mandatory for all state electricity commissions. Therefore, effectively, the Central government will decide electricity tariffs all across India. (Section 86(4A))

Amendments favour power companies without making them accountable:

The proposed amendment has removed the clause of ‘offences by companies’. With the removal of this section the misdeeds of DISCOMs and their Directors will remain un-checked. (Section 149)

“We are all aware of one power Generation Company facing DRI investigations for over-invoicing coal imports leading to huge increase in power costs. This group is considered extremely close to the PM. Central government had been trying to get the DRI case against this group closed. Now, such companies will be able to recover the costs of their frauds and malpractices from consumers just by keeping Centre happy,” said CM Kejriwal.


“I will write to all the chief ministers and personally meet those from the non-BJP-ruled states against the amendments that are very dangerous and draconian. This move is aimed at benefitting the big power companies that are known to be close to the prime minister,” the Aam Aadmi Party (AAP) chief said.

The AAP will launch a movement against the amendment bill so that its passage in the Rajya Sabha could be stopped, he added.