Electricity Bill 2025: Vidarbha’s Poor, Farmers Face Big Shift

thenewsdirt
Jun 30
7 min read

The Electricity Amendment Bill 2025 has passed in the Lok Sabha. This new proposed law will change how people get electricity subsidies across India if it is passed in the Rajya Sabha. Instead of cheap electricity bills, families will get cash directly into their bank accounts.

The government will also allow private companies to sell electricity in the same areas. In Vidarbha, this means big changes for farmers and poor families who depend on cheap power.

How Electricity Works Now in Vidarbha

Right now, electricity in Vidarbha works through heavy government subsidies. The Maharashtra State Electricity Distribution Company Limited (MSEDCL) supplies power to all districts, including Gadchiroli, Washim, Nagpur, and Amravati. Most people here are farmers who grow cotton.

The state government runs a scheme called 'Mukhya Mantri Baliraja Vij Savlat Yojana'. This gives free electricity to farmers for pumps up to 7.5 horsepower. Around 44.06 lakh farmers across Maharashtra get this benefit. The state pays ₹14,761 crore every year for this scheme.

Farmers pay only ₹1.50 per unit of electricity. But the real cost to make electricity is ₹7 per unit. The government pays MSEDCL the difference of ₹5.50 per unit. This is a huge subsidy that helps farmers run their water pumps without going broke.

Poor families in tribal areas like Gadchiroli also get cheap electricity. They pay much less than the actual cost for basic needs like lights and fans. In drought areas like Washim, this cheap power helps families survive when there is no rain and crops fail.

MSEDCL's recent price lists show just how big these subsidies are. Both farmers and home users pay way below the real cost of electricity. This system has kept the lights on and pumps running across Vidarbha for years.

What Cash Transfers Mean for Poor Families

The new bill will stop cheap electricity and give cash instead. Families will pay full price for electricity and get money in their bank accounts to cover the cost. This could help families spend money on other things like food or medicine when they need it most.

But there are big problems with this plan. Many people in Gadchiroli do not have proper access to banks.

The Jan Dhan Yojana helped more people open bank accounts, but gaps still exist. A 2013 India Today report showed only 21 crore people out of 120 crore Indians had Aadhaar-linked accounts needed for cash transfers. Things have improved since then, but many tribal families still struggle with banking.

Many families do not know how to use smartphones or banking apps. Old people and those living far from towns find it hard to get to banks. If cash transfers are late, families cannot pay their electricity bills.

This could lead to power cuts right when people need electricity most.

The World Bank says cash transfers can work well, but only if the money reaches people on time and in the right amount. If the cash is not enough to pay full electricity bills, poor families in Vidarbha will face higher costs. This is especially bad in places like Washim, where drought already makes life hard.

LPG subsidies work differently because people buy gas cylinders once in a while. Electricity bills change every month based on how much power people use.

The summer months need more electricity for fans and coolers. Winter months need less. Getting the cash amount right will be much harder than LPG subsidies.

People worry that if cash transfers fail, families will have to choose between electricity and food. Power cuts would hurt children's studies and make life harder for everyone. The success of this new system depends on making sure cash reaches families quickly and covers their full electricity costs.

How Farmers Will Handle the Change

Farmers in Vidarbha use electricity mainly for water pumps. In places like Washim, where rain is uncertain, these pumps are lifelines for crops. Right now, farmers pay very little for electricity because of big subsidies. Under the new system, they will pay full price and get cash to cover the cost.

Farming needs different amounts of electricity at different times. During planting season and summer, farmers need lots of power for pumps. In winter, they use much less. If cash transfers do not match these patterns, farmers might not have enough money to pay big bills during peak seasons.

Studies from Ghana and Tanzania show that removing subsidies can hurt poor people.

But good cash transfer programs can help at a lower cost to the government. The key is making sure the cash equals the old subsidy amount. In Vidarbha, the subsidy covers ₹5.50 per unit difference. Cash transfers must give the same value to farmers.

Many farmers still do not have good access to banks. Some have moved to solar pumps through the Mukhyamantri Saur Krushi Pump Yojana, but most still depend on grid electricity. If cash transfers fail, farmers might switch to diesel pumps. These cost more and pollute the air.

Bad timing could force farmers to cut back on watering crops. This would hurt harvests and reduce income. In Vidarbha, where farmer suicides are already a problem, any drop in farm income could make things worse. Getting cash transfers right is crucial for keeping agriculture going.

The seasonal nature of farming makes this transition tricky. Farmers need the most electricity when they have the least cash flow. The new system must account for these timing issues to work properly.

Competition and Better Service

The new proposed law also allows multiple companies to sell electricity in the same area. This is like how mobile phone companies compete for customers.

Right now, only MSEDCL sells electricity in Vidarbha. Competition could mean better service and fewer power cuts.

Power cuts hurt productivity and make life difficult. When companies compete, they usually try harder to keep customers happy. This could mean fewer outages and better customer service in Vidarbha.

But competition also brings risks. Private companies like to focus on rich customers in cities where they can make more profit. Poor areas like Gadchiroli and Washim might get ignored because they are harder to serve and make less money.

The government will need strong rules to make sure all areas get good service. Companies should not be allowed to only serve profitable customers while ignoring tribal areas and drought-hit regions.

The transition period might bring confusion as new companies start working and old systems change.

Over time, competition could bring new technology like smart meters and better power grids. Companies might offer different services to attract customers. But these benefits must reach rural areas too, not just cities.

Whether competition will lower electricity prices for regular people is unclear. Companies need to maintain service quality and invest in infrastructure. This might limit how much prices can fall. Good rules and enforcement will determine if Vidarbha benefits from competition.

Making the Changes Work

A glowing light bulb hangs against a dim, neutral background, casting a warm, soft glow in Vidarbha. — Making the Electricity Bill Changes Work

The Electricity Amendment Bill 2025 brings major changes that will test how well the government can implement new policies. Vidarbha has special challenges, including many tribal people, drought-prone farming, and weak infrastructure. National policies must address these local issues.

For cash transfers to work, areas need good banks, internet connections, and coordination between electricity companies and banks. Rural areas often lack these basics. This could cause delays or failures that hurt vulnerable people. The government must prepare properly and fix infrastructure gaps.

Regular monitoring will be essential to see how the new policies work. The government should track whether cash transfers arrive on time, in the right amounts, and help people as intended.

Feedback systems should let people report problems and suggest improvements.

The competitive electricity market needs careful rules to balance efficiency with fairness. Price controls, service standards, and requirements to serve all areas must protect vulnerable customers while letting market forces work. Regulators may need training to handle complex new market structures.

Training programs for consumers, especially in rural and tribal areas, could help smooth transitions. People need to learn about banking, digital payments, and their rights under competitive markets. This education could reduce problems and improve outcomes for vulnerable groups.

Success in Vidarbha will depend on addressing practical challenges while keeping the policy's goals of efficiency and fairness. Careful attention to regional needs and vulnerable populations will determine whether these big reforms help or hurt people's access to electricity.

The changes coming to Vidarbha's electricity sector are massive. How well they work will depend on implementation details and whether the government can address the unique challenges facing farmers and poor families in this region. The stakes are high for millions of people who depend on affordable electricity for their daily lives and livelihoods.