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Political Economy of Electricity Reform: A Case Study in Gujarat, India

Author

Listed:
  • Christopher Joshi Hansen

    (Oxford Institute for Energy Studies & Dept. of Geography, Oxford University)

  • John Bower

    (Oxford Institute for Energy Studies)

Abstract

In India, the supply of electricity relies heavily on a virtually bankrupt and sometimes corrupt system of state electricity boards (SEBs), which have failed to bring electricity to approximately 40% of rural households. High subsidy levels to agriculture and domestic customers and widespread electricity theft have resulted in weak financial conditions for the SEBs; and thus-top down remedies for improving the electricity system are not likely to be successful. The problems are particularly acute in Gujarat state, which represents a microcosm of the key issues faced throughout India, where a complicated and overlapping regulatory structure and new entrant prohibitions have stifled new electricity sector investment. This paper identifies and analyses the political and economic factors that have hindered progress. The main finding is that government may meet with greater success if it encourages and facilitates local private investment in small-scale electricity production, as a ‘bottom-up’ solution, rather than continuing attempts to force through ‘top-down’ reform of the existing state-owned electricity sector against entrenched interest groups.

Suggested Citation

  • Christopher Joshi Hansen & John Bower, 2004. "Political Economy of Electricity Reform: A Case Study in Gujarat, India," Others 0401006, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpot:0401006
    Note: Type of Document - .pdf; prepared on WinXP; pages: 54; figures: 6
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/othr/papers/0401/0401006.pdf
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    References listed on IDEAS

    as
    1. Thillai Rajan, A., 2000. "Power sector reform in Orissa: an ex-post analysis of the causal factors," Energy Policy, Elsevier, vol. 28(10), pages 657-669, August.
    2. Amin, A-L., 1999. "Liberalization of the indian power industry: Wind power in Gujarat," Renewable Energy, Elsevier, vol. 16(1), pages 977-980.
    3. Thillai, Rajan A., 2003. "Principal players in utility restructuring: the case of Orissa," Energy Policy, Elsevier, vol. 31(5), pages 431-441, April.
    4. Ghosh, Sajal, 2002. "Electricity consumption and economic growth in India," Energy Policy, Elsevier, vol. 30(2), pages 125-129, January.
    5. Cynthia Neudoerffer, R. & Malhotra, Preeti & Venkata Ramana, P., 2001. "Participatory rural energy planning in India -- a policy context," Energy Policy, Elsevier, vol. 29(5), pages 371-381, April.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Krishnan C, Muralee & Gupta, Santanu, 2018. "Political pricing of electricity – Can it go with universal service provision?," Energy Policy, Elsevier, vol. 116(C), pages 373-381.

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    Keywords

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    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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