IDEAS home Printed from
   My bibliography  Save this paper

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


  • Christopher Joshi Hansen

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

  • John Bower

    (Oxford Institute for Energy Studies)


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

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    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)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    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.

    More about this item


    power sector; reform; liberalisation; electricity;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpot:0401006. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.