The Framework for Power Regulation
The Indian electricity sector is primarily governed by the Electricity Act, 2003. This landmark legislation consolidated earlier laws to create a more unified structure for generation, transmission, and distribution. It aimed to boost competition, protect
consumers, and promote the development of the electricity industry. At the heart of this framework are the regulatory commissions. The Central Electricity Regulatory Commission (CERC) operates at the national level, responsible for regulating tariffs for central government-owned generating companies and managing the inter-state transmission of electricity. It also issues licenses for inter-state electricity trading and sets the grid code to ensure reliability.
State-Level Electricity Governance
Complementing the CERC are the State Electricity Regulatory Commissions (SERCs), with each state having its own regulatory body. SERCs were established under the Electricity Regulatory Commissions Act, 1998, and their roles were continued by the Electricity Act, 2003. Their primary function is to regulate the sector within state boundaries. This includes determining the tariffs for electricity generation and supply within the state, regulating the operations of distribution companies (DISCOMs), and resolving disputes between licensees and generating companies. These quasi-judicial bodies play a crucial role in the day-to-day management of power supply and are instrumental in implementing state-specific policies, such as those for renewable energy.
The Fragmented World of Water Regulation
Unlike the power sector, water governance in India is more fragmented and complex. Water is a state subject under the Constitution, meaning that state governments have the primary authority to create laws and manage water resources within their borders. To provide a guiding framework, the central government has formulated the National Water Policy, which has been updated several times, most recently in 2012. This policy offers principles for water resource development and management, focusing on equitable and sustainable use. However, its implementation has faced challenges, and its impact varies across states. Key central bodies like the Central Water Commission (CWC) act as premier technical organisations, providing advisory and technical guidance to both central and state governments on issues like flood control, irrigation, and dam safety.
Key Laws Governing Water Resources
Several key pieces of legislation govern different aspects of water in India. The Water (Prevention and Control of Pollution) Act, 1974, is a cornerstone of environmental law, aiming to prevent water pollution. For disputes between states over river water, the Inter-State River Water Disputes Act, 1956, provides a mechanism for resolution. Groundwater, which meets a significant portion of India's domestic and agricultural needs, is another critical area. The Central Ground Water Authority (CGWA) was established under the Environment (Protection) Act, 1986, to regulate and control groundwater development, requiring industries to obtain a No Objection Certificate (NOC) for extraction.
The Crucial Approval Process
For any major power or water project, a series of approvals is mandatory before work can begin. A critical step for both sectors is obtaining Environmental Clearance (EC) from the Ministry of Environment, Forest and Climate Change (MoEFCC) or the relevant State Environment Impact Assessment Authority (SEIAA). This process is governed by the Environmental Impact Assessment (EIA) Notification of 2006, which mandates a detailed study of a project's potential environmental and social impacts. Projects such as thermal power plants, hydroelectric projects, and large irrigation projects cannot proceed without this clearance. The process involves screening, scoping, public consultation, and appraisal by an expert committee, ensuring that development is balanced with environmental protection.
