The aetiology of the inefficiency syndrome in the Indian power sector: Main issues and conclusions of a study
AbstractThe present study is an attempt at a detailed diagnosis of the accumulated inefficiency in the Indian power sector, the consequent reform drives, and the political economy involved in these aspects. The discussion in the wider canvas of the national scenario is substantiated by focusing on the Kerala power sector, taken for illustrative purpose. It is shown that much of the capacity/energy deficit we experience today could be easily avoided with some achievable functional improvement in the power sector. We also estimate, on some very plausible assumptions, the avoidable cost of inefficiency at a few amenable functional levels and find it to represent about one-third of the reported cost of electricity supply in India in 1997-98! Given such scope for cost reduction, the attempts at tariff hikes amount to transferring the inefficiency onto the customers. Based on these observations, we argue that the present system predicament is due to problems that are just internal to the system. This then implies that there do remain sufficient quarters for remedial exercises, meant to remove the problems that stand in the way of the SEBs' improved performance. In other words, what the system badly requires is essence-specific reforms, not structure-specific ones. We hence question the (unfounded) logic of the structural reform in the sector now posited as the panacea. We also list out a number of feasible suggestions for the improved performance of the sector, in the context of Kerala.
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Bibliographic InfoPaper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 324.
Length: 77 pages
Date of creation: Mar 2002
Date of revision:
Indian power sector; inefficiency; reform; political economy; equity;
Find related papers by JEL classification:
- H1 - Public Economics - - Structure and Scope of Government
- H4 - Public Economics - - Publicly Provided Goods
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- K.P. Kannan & N. Vijayamohanan Pillai, 2001. "The political economy of public utilities: A study of the power sector," Centre for Development Studies, Trivendrum Working Papers 316, Centre for Development Studies, Trivendrum, India.
- N. Vijayamohanan Pillai, 2004. "CES function, generalised mean and human poverty index: Exploring some links," Centre for Development Studies, Trivendrum Working Papers 360, Centre for Development Studies, Trivendrum, India.
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