Here is a status report of the government’s proposal of privatization of power distribution in Union territories.
In a recent written reply in the Rajya Sabha, Shripad Naik, Minister of State for Power, said that the privatization of two Union territories – Dadra & Nagar Haveli and Daman & Diu (DNH&DD) and Chandigarh – has been completed, while other UTs have issued requests for proposal.
Background
The government of India announced privatization of power distribution utilities in UTs under Aatma Nirbhar Bharat Abhiyan in May 2020. The decision is guided by the objective of providing better services to consumers while improving operational and financial efficiencies in electricity distribution, which will also provide a model for emulation by other Utilities across the country.
As per the decision of the Government of India, various UTs have undertaken steps for privatization of their electricity distribution utility. Ministry of Power has provided transaction advisory support to the UTs regarding privatization.
Accordingly, five UTs – DNH&DD, Chandigarh, Andaman & Nicobar Islands, Lakshadweep and Puducherry – initiated the process of privatization.
Success stories
The transfer scheme of DNH&DD became effective on April 1, 2022 with Torrent Power winning the mandate of the private power distribution licensee. In the case of Chandigarh, CESC (RP-Sanjiv Goenka) Group took over power distribution on February 1, 2025.
Court injunctions
Chandigarh: Two civil writ petitions were filed in the High Court of Punjab & Haryana, at Chandigarh, against privatization of power distribution in Chandigarh. The High Court, on November 6, 2024, dismissed both the writ petitions, and the privatization was eventually completed.
Puducherry: The High Court of Madras, on November 16, 2022, stayed the opening of bids for privatization of power distribution in Puducherry. The matter is still sub judice.
DNH&DD: The Bombay High Court initially stayed the tender process for privatization of distribution utilities of DNH&DD on March 3, 2021. However, the stay was vacated by the Supreme Court on July 9, 2021 and subsequently the process of privatization of power in DNH&DD was concluded.
Also read: Privatization of power distribution in DNH & DD: Supreme Court stays Bombay HC order
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