The Indian government is planning to introduce a levy on electricity. Legislation amending the electricity act is expected to be introduced in the next session of the Indian Parliament.

The levy will be paid by all consumers of electricity, across the country, and the funds generated will be shared between the Indian states and the federal government. The states will retain two thirds of the levy and the central government will receive the remaining third.

The central government’s share will be used to improve the Indian electricity system and to develop hydropower plants. State governments will be able to dispose of their part of the revenue from the levy as they choose. The government estimates the the levy will provide the power sector with an investment of around $900 million.