Uttar Pradesh State Electricity Board's poor financial condition and growing power shortages called for radical reforms of the state's power industry. However, this analysis shows that the reforms model being implemented is based on incomplete diagnosis of the Board's past problems. High cost of power purchase, arbitrary depreciation norms, misrepresentation of agriculture consumption and over-reporting of impact of subsidy, were as important reasons as poor maintenance, poor productivity, high T and D losses, poor billing efficiency and high subsidy to agriculture, in affecting financial performance of the Board. Besides lack of recognition of the former set of causes, the reforms process is ridden with other major pitfalls like sabotage-prone gaps in the proposed model and ad hoc handling of its implementation. The proposed reforms model appears to have been conceived out of desperation to escape from financial burden imposed by past mistakes, rather than out of a conscious reorientation of past policies, structures and systems in keeping with international changes in technological and competitive environment.
