In December, 1896 Indian Electric Company, which was registered in London in 1895, was favored with the license to distribute and sell electricity in 5.6 Square Mile area in the city of Calcutta, the then capital of India, under Calcutta Electricity Lighting Act for 21 years. Kilbern & Co. was engaged as agent of the said Indian Electricity Company with effect from the 7th January, 1897. The private entrepreneurships solely were engaged in generation, distribution, and sale and in development of electricity in our country up to the year 1948 prior to enactment of the Indian Electricity Act 1948. The number of electrified villages and pumps engaged in agriculture were 1500 and 6500 respectively. Per capita consumption of electricity in India was only 16 units at that time.
The power sector in India has undergone significant progress after Independence. When India became independent in 1947, the country had a power generating capacity of .
Hydro power and coal based thermal power have been the main sources of generating electricity. Generation and distribution of electrical power was carried out primarily by private utility companies.