Privatization, retailing and regulation of electricity distribution in India

Abstract

Distribution companies have continued to face heavy losses, from Rs. 27,101 Cr. in 2006-2007 to Rs. 60,000 Cr. in 2010-11. These losses are expected to continue to increase to more than one lakh crores by 2014-2015. In addition, the demand for power has continued to rise in all sectors, and our generation is not able to keep pace. The power sector is extremely important to the development of the Indian economy, and distribution is one of the three pillars holding up this sector. Privatization in the generation area has resulted in some relief although issues related to land acquisition; coal linkages and project management delays continue to plague the industry. Transmission has been taken up well by Power Grid of India Ltd. and is slowly recovering by both lowering its losses, installing additional high voltage lines and widening its network. It is essential that reforms in the distribution segment follow suit so as not to affect the efficiency of the power sector further.