From Lattus to Lasers: Realising India’s Electricity Potential
The history of electricity in India traces an inverted arc – like a smiley – which starts in the colonial period with private electricity capacity leading, regresses to a mode of near complete public sector monopoly by the 1980s and then traces the upward incline to a near 50% share for private electricity suppliers – not a full smiley but a slightly lop-sided one. The half-smile – like Mona Lisa’s – masks long periods of misallocation of public capital, unabashed populism, and careless adherence to ‘path dependencies’ which plagues bureaucracies the world over. This book asks a few inconvenient questions and provides some out-of-the-box solutions with the intention of enlarging the public debate around how the electricity sector should be regulated and developed going forward.
… most impressive is the vast historical canvass it covers placing the electricity sector in the framework of national economic ‘reform’ leading to industry restructuring and the introduction of autonomous regulation, which remain works in progress.
Dr Pramod Deo, former Chairman, CERC
… encapsulates an ‘electric’ journey of over a 100 years in a succinct yet comprehensive manner. It is a key to understanding the fundamentals of the Indian electricity sector.
Gireesh B Pradhan, former Chairman, CERC and former Secretary, MNRE
An innocuous subject like electricity springs to life when viewed through the lens of a seasoned policy analyst and researcher. Weaves an intricate tale of the twists and turns of the electricity sector from the restrictive days of colonial rule through consolidation to its present-day spread across the country. The finale is a transformational framework to make the sector future-ready, although … the proposal of multi-state electricity regulators does not fi t the context of India’s fractious and divisive politics.
Prabir Neogi, Chief Advisor (Corporate Affairs), RP-Sanjiv Goenka Group
… does not stop at only presenting the history and challenges … also proposes bold reform measures, including privatization of distribution and establishment of regional regulators. There may be divergent opinions about some of the measures, but I am sure every stakeholder will agree with the following observation, “India needs to enhance its energy resilience and security. This is possible if the spirit of cooperative federalism suff uses institutional arrangements and public interest trumps political upmanship.”
Shantanu Dixit, Prayas (Energy Group), Pune
Adults who are concerned about topical issues but lack the understanding to make sense of what they read or watch in the mass media.
Table of Contents
Electricity dispels the darkness
The origins of electricity
The colonial period: electricity for the elite: 1950–1984
Democratizing electricity supply
The Electricity (Supply) Act, 1948
Central planning favours public investment-led development
The Industrial Policy Resolution, 1956
The fiscal cost of public electricity supply
Changes in consumption pattern
The return of private investment: 1985–2020
International comparison of electricity supply
Profligate use of electricity shunned
Incentives for electricity reform
Union government’s initiatives for structural reform in electricity
The outcomes of reforms
The end of supply shortages
Generation capacity utilization lower than optimal
Private power exchanges
Discoms: the weakest link in the value chain
The unfinished reforms agenda
Planned electricity development: supply-side triumph or copycat industrial policy?
Putting industrial development above basic social and human needs
Throwing out the baby with the bathwater
Misallocation of public funds
Economic growth and competitiveness
Unresolved issues in electricity supply
Electricity suppliers: too few or too many?
Has competition in supply increased?
Has the unbundling splintered supply to unviable levels?
Measures to enhance competition
Autonomy for regulators
The needs of viable power markets
The need for a ‘smart’ grid
Four short-term hard choices
Trends favouring India
High growth can make green power affordable
Renewable and hydroelectricity offer unutilized potential
Growth of digital connectivity
Symmetric policy preferences across parties
Bibliography and notes
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