India’s electricity system has long hidden a big secret: businesses pay up to 30% more for power to help households and farmers get cheap or free electricity. Now, the Draft Electricity (Amendment) Bill, 2025, released on October 9, is shaking things up. It aims to stop this cross-subsidising and let private companies distribute power, making tariffs fair and based on real costs. The Rs 6.9 Lakh Crore Leak Power companies in India, called DISCOMs, are bleeding money—losses have crossed a staggering Rs 6.9 lakh crore. State governments often promise support but rarely pay on time. Because raising tariffs for households or farmers is politically unpopular, businesses are left to cover the shortfall. This unfair system drains money from industries that rely heavily on electricity, like steel, cement, aluminium, textiles, chemicals, and even data centers. No More Cross-Subsidies After Five Years One of the biggest changes in the draft bill is to remove these cross-subsidies over five years. Instead of forcing businesses to pay extra, states will directly fund subsidies from their budgets. This could unlock over Rs 1 lakh crore tied up in distortion and allow better infrastructure or lower business costs. Will Margins Really Improve? Absolutely! Industries where power is a huge cost—steel, aluminium, cement, pharmaceuticals—could see electricity expenses fall by 10-15%. That’s a big deal because power can be 20-30% of their total costs. For example, profit margins (EBITDA) might grow by 40 to 100 basis points if power prices drop by 10%. However, this will vary by state: places like Gujarat and Maharashtra already have reasonable tariffs, but Punjab, Rajasthan, and Uttar Pradesh could see major benefits. Hello, Private Players! The bill cracks open the monopoly held by state DISCOMs, which control over 90% of power distribution. Private firms like Tata Power, Adani Electricity, Torrent Power, and Reliance can now compete in the same area using shared infrastructure. This means better services, smarter billing, more digital tools like smart meters, fewer power cuts, and more control for consumers and businesses alike. The Flip Side: Transparency Costs With subsidies now shown openly in state budgets, transparency improves. But states that offer free power schemes could face bigger budget deficits—up to 10-20% more—if they don’t rethink subsidy programs. This is tricky politically, especially with elections near. Final Thought This Draft Electricity Amendment Bill isn’t just tweaking rules; it’s changing the whole game of how India pays for and gets electricity. Businesses should expect lower electricity bills in the future, especially in states with high tariffs. This could make Indian industries stronger, more competitive, and ready to shine on the global stage—powering India’s growth with fair and smart electricity.