Electricity Sector

The success of electricity reforms in India will depend critically upon the existence of some sort of restraining or disciplining mechanism in the sector, in the absence of which current efforts will likely result in a transition from inefficient public ownership to profit-gouging monopolies or oligarchies. In principle, such a mechanism could be strong, independent and effective regulatory oversight over public or private monopolies or significant competition among a large number of public and private entities. But it is important to examine without bias, and as thoroughly as possible, the feasibility and effectivness of both these sector-disciplining mechanisms before making any claims regarding the desirability of privatisation. The authors also argue that issues related to protecting the environment, extending access to the poor and other off-grid populations and strategic concerns related to import dependence and foreign private ownership need to be addressed upfront in order for the reforms to be in the broader public interest. [This paper is dedicated to the memory of Stephen R Bernow, 1942-2003.]

Caste still defines social and political identity and oppressed groups are represented by tiny sections from each group that are more or less integrated into the existing political system. The panchayat system serves as one of the instruments of this integration by opening the doors of opportunity for that tiny elite. They, in turn, mobilise votes for the major political parties. Whether the Congress wins the coming assembly elections or not, the utility of political decentralisation for the ruling class has been well and truly proved.

India has taken a long time to arrive at a reasonable direction for the improvement of the power sector. For long it has been difficult to strike a proper balance between the commercial viability of the sector and the imperative need to make power available even to those deficient in resources to pay for it. This paper discusses the various issues in the sector and the present state of the reforms programme. It sees some room for hope growing understanding of the sector that seems to have developed among policy-makers.