Power Sector Reform: Some Lessons for Kerala

Electric power is so vital to both our economic and personal wellbeing that the erstwhile state policy in most of the developing countries, including India, had vested the power industry in the hands of the state as a promotional agency for subsidized supply. However, with the onset of the neo-liberalism in the wake of the fall (of the threat) of socialist alternative, the promotional orientation in the state policy had to give way to efficiency considerations in the sense of a neoclassical market economy. Thus has started the infamous power sector restructuring, the technical term for ultimate privatization. Radical policy changes were legislated in India and so far 13 States have reorganized their power sector; in Orissa, Delhi and Noida in Uttar Pradesh power distribution was entirely privatized. Kerala with a militant trade union presence has so far been dragging her feet, even in the face of the stern legislative requirement, portending an ultimate surrender. In this context the present paper attempts to draw some lessons from actual experiences elsewhere.