Political Economy of Electric Power in India

Sebastian Morris Since the cancellation of the Dabhol Power Project (DPP), the debate about electric power in India has come into the public view, raising hopes that corrective measures can be taken to have a viable, cost effective and growing power industry, A critical examination of the recent policy changes especially as regards the Independent Power Projects (IPPs) reveals that there are many dysfunctionalities in this policy particularly in the enormous and quite unnecessary burden it places on the balance of payments, and in the additional constraints against improvement and change in the state sector. It would be damaging to indigenous power equipment manufacturers, particularly the BHEL, just when it is showing the potential to be an important international player in the industry.