Liberalization of Electric Power in India

Abstract

This paper discusses the economics and politics of liberalization of electric power in India. It concludes that the liberalization of the power sector is premature. Even under ideal conditions, technology and the public benefits associated with power supply in developing countries necessitates at the very least intrusive regulation if not public ownership, as was earlier believed to be required. The time period for reform has been generally underestimated at around five to seven years. Based on the experience during the nineties, it is argued that a 15 year time frame is needed to move from government controls, intrusive regulation, financial instability, public sector domination and monopoly in supply, to financial balance, commercialization, privatization, limited competition and consumer choice and market-based regulation.