Electricity Amendment Bill with cost-reflective provision likely in Budget Session: Manohar Lal
GS3Economy · S&T · Environment · Security· Infrastructure (energy, ports, roads, railways)· Prelims + Mains·
Why in news
Union Minister Manohar Lal announced the introduction of a cost-reflective tariff concept in the Electricity Amendment Bill to reduce losses for distribution companies (discoms).
Background
The Electricity Amendment Bill aims to factor all power supply expenses into the tariff structure. The Power Ministry has also sought comments on the draft National Electricity Policy 2026, which supports these cost-reflective tariffs.
Facts for Prelims
- S&TPre-paid smart meters: Technology proposed to improve the financial health of discoms and reduce commercial losses.
For Mains
Q. Discuss how the implementation of cost-reflective tariffs and smart metering can address the chronic financial distress of power distribution companies in India.
Dimensions to cover in your answer
- Financial sustainability: Bridging the ACS-ARR gap to ensure discoms can maintain infrastructure and service quality.
- Regulatory hurdles: Balancing the need for cost-reflective pricing with the necessity of affordable electricity for consumers.
- Technological integration: Reducing commercial losses through the mandatory adoption of pre-paid smart meters.
Keywords: Cost-reflective tariff · AT&C losses · Discom financial health · Smart metering · Infrastructure financing
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