India is considering a bailout exceeding 1 trillion rupees (about $12 billion) for debt‑laden state‑run power distribution companies, according to Financial Express. To receive the funds, states would be required to privatise their electric utilities and either transfer managerial control or keep control while listing them on a stock exchange, the outlet added. The Power Ministry and the Ministry of Finance are discussing final details of the bailout, with an announcement expected in the February budget, Financial Express reported, noting that the ministries did not immediately respond to Reuters’ requests for comments.

Under the proposal, at least 20 % of a state’s total power consumption must be met by private companies, the same source said. The plan is described as part of Prime Minister Narendra Modi’s reform push to overhaul state‑run electricity distribution companies and is characterized as Modi’s toughest reform push yet, targeting chronically inefficient state‑run electricity distribution companies that are seen as the weakest link in India’s energy chain.

In a related development, Tata Power withdrew its application seeking a licence for parallel distribution of electricity in Karnataka, according to The Hindu. Bescom raised objections in its June 2026 petition, pointing to Tata Power’s legal non‑compliance, network deficiency, consumer‑protection risks and competition concerns, also reported by The Hindu.