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Power Politics

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Power Politics
Process of Power Sector Reform in India
Power sector policy in India appears to have locked itself into adverse arrangements at least twice in the recent period. The first was when agricultural consumption was de-metered and extensive subsidies were offered; the second when Independent Power Producer contracts with major fiscal implications were signed by the State Electricity Boards. A third set of circumstances, with the potential for equally powerful forms of institutional lock-in, appears to be in the making with the reproduction of the Orissa model on the national scale. This paper provides an analysis of the social and political context in which power sector reforms have taken place in India. While a state-led power sector has been responsible for substantial failures, is the design of the reformed sector well aimed at balancing efficiency and profit-making on the one hand and the public interest on the other? The discussion of the forces and actors that have shaped the reform processes is intended to contribute to an understanding of how the public interest can best be served in the ongoing effort to reshape the power sector.
NAVROZ K DUBASH, SUDHIR CHELLA RAJAN

I Introduction he electric power sector in India is in a state of upheaval. Over the decade of the 1990s, the long-held belief in public ownership and operation of this critical sector has been eroded. In its place has emerged a growing vision of the sector organised around participation by the private sector, competition and independent regulation. The significance of these changes for economic, distributive and political outcomes is potentially profound. Since independence, the sector has been operated as an instrument of public policy. Critics of this approach have argued that public ownership has led to inefficiencies and scope for undue political influence.

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