Centre gives three options for power privatization – will discontinue grants
Bahadurjeet Singh/ royalpatiala.in News/Rupnagar, October 18,2025
The central government has given three options to states for privatizing the power sector in states Otherwise, it will discontinue the grants to those states not following the dictates of the central government. In the first two options the state must give the private sector 26 to 51 % share with full management control. In the third option the state must register Discoms in the stock exchange.
Following the recent meeting of the group of ministers from seven states, the central government is offering states three options on the privatization of electricity; otherwise, central grants to those states will be discontinued.
In the first option the state government sells 51% stake in electricity distribution corporations and operates the electricity distribution companies under a PPP (Public-Private Partnership) model. In the second option, the state must sell 26% stake in electricity distribution companies and hand over management to a private company. In the third option, those states that do not want privatization must register their electricity distribution companies with SEBI and the stock exchange.
It was also intimated In the group of ministers’ meeting, that grants from the center will be stopped for states that do not opt for any of these three options, and no further financial assistance will be provided.
It may be mentioned that electricity is on the concurrent list in the eighth schedule of the Constitution, which means the central and state governments have equal authority in electricity matters. In such a situation, how can the decision on privatization be imposed on state governments based on the opinion of seven selected states including Uttar Pradesh, Maharashtra, Madhya Pradesh, Rajasthan, Haryana, Andhra Pradesh, and Tamil Nadu.
It appears that a nationwide campaign for privatization is being aggressively pushed forward. Strangely, All India DISCOM Association (AIDA) is an invited member in all meetings of the Group of Ministers . It seems AIDA is playing the role of middlemen for privatization of the power distribution sector.
