With the losses of state-run electricity distribution entities ( discoms ) rising unabated despite the series of financial support schemes linked to regulatory targets over the last two decades, the Centre has proposed legal amendments to introduce competition and market discipline in the sector.

The Union power ministry has proposed to allow industries to directly procure electricity from private players, and remove the obligation on the discoms to supply to all consumers in the respective geographies. This means “open access” consumers — industries and businesses with consumption above 1 megawatt – may have to pay premium tariffs in the event of shortage, while supply will be uninterrupted.

The move is expected to improve the revenue flows of discoms, as it will help unlock substan

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