The Consultative Committee of the Ministry of Power met on July 23, 2026, under the chairmanship of Union Minister for Power and Housing & Urban Affairs Shri Manohar Lal to deliberate on a proposed framework for parallel distribution licensing. The meeting was attended by Shri Shripad Yesso Naik, Minister of State for Power, Members of Parliament from the Consultative Committee, the Secretary of the Ministry of Power, and senior ministry officials.
The discussion focused on addressing the limited competition in electricity distribution, which remains the only major segment without significant competition despite the Electricity Act, 2003 having successfully introduced competition in generation, transmission, and trading. The Minister emphasized that as India moves toward its Viksit Bharat @2047 vision, consumers will demand reliable, affordable, and high-quality electricity supply comparable to global standards.
The existing legal framework currently permits multiple distribution licensees in the same area but requires each licensee to establish its own distribution network, leading to duplication of poles, lines, and substations. This duplication increases capital expenditure, discourages fresh investment, and results in inefficient resource utilization.
The proposed consumer-centric framework seeks to enable competition in electricity supply without requiring physical network duplication. Under this proposal, existing distribution licensees would continue to own, operate, and maintain their networks, while new distribution licensees would be able to use the existing network by paying regulated wheeling charges. New licensees would retain the option to develop their own network where permitted by the concerned State Electricity Regulatory Commission.
State Electricity Regulatory Commissions will develop the detailed implementation framework to ensure fairness, transparency, and non-discriminatory network access. The proposal fully protects the interests of incumbent distribution licensees and their employees. All distribution licensees will continue to be bound by the universal service obligation under the Electricity Act, and the regulatory framework will prevent selective supply only to profitable consumers.
This reform is expected to provide consumers with freedom to choose their electricity supplier, similar to choices available in telecommunications and aviation sectors. Increased competition is anticipated to encourage better consumer service, improved reliability, greater innovation, operational efficiency, optimal utilization of existing infrastructure, and avoidance of unnecessary expenditure.
The Minister noted that the concept has been successfully implemented in Mumbai for several years, where consumers exercise supplier choice while the distribution network continues to be developed in a coordinated manner under State Electricity Regulatory Commission supervision. Members of Parliament participated actively in the discussions and offered valuable suggestions on various aspects of the proposed framework.