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Books > Business & Economics > Industry & industrial studies > Energy industries & utilities
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More power to India - the challenge of electricity distribution (Paperback)
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More power to India - the challenge of electricity distribution (Paperback)
Series: Directions in development
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This World Bank review of India s power sector assesses state-wise
progress in implementing the government s reform agenda two decades
after the liberalization of India s economy and a decade after the
passage of the forward-looking Electricity Act of 2003 (EA). It
examines the performance of the sector along the following
dimensions, drawing on in-depth background papers achievements in
access, the financial and operational performance of utilities,
governance, private participation, and the coverage and targeting
of domestic user subsidies. Despite considerable progress in
implementing the EA mandates and associated policies over the past
decade, the report shows that sector finances remain weak.
After-tax losses in 2011 were equivalent to nearly 17 percent of
India s gross fiscal deficit and around 0.7 percent of GDP; they
were concentrated in the distribution segment. Twenty years after
the initiation of reforms, an inefficient, loss-making power sector
and inadequate and unreliable power supply are major constraints to
India s growth, inclusion, job creation, and aspirations for
middle-income country status. This report shows that achieving
sector outcomes is linked closely to the degree to which each state
has implemented the EA. Key reforms mandated by the EA have still
not been implemented in full, with progress in promoting
competition lagging furthest behind. Further, multiple institutions
with diffuse accountability have undermined the sector s commercial
orientation: state governments are a major presence with a
generally detrimental impact on utility operations; the regulatory
environment has not sufficiently pushed utilities to improve
performance; and, the flow of liquidity from lenders has limited
the pressure on discoms to improve performance and on state
governments to allow tariff increases. An important contribution of
this report is its forthright recognition that poor power sector
performance in India is rooted in distribution inefficiencies and
limited accountability. This leads the authors to conclude with
recommendations directed at these specific aspects in order to
improve service delivery and other metrics of sector performance,
put the sector on a financially sustainable path, and help ensure
that power is no longer a bottleneck for growth."
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