Against The Current: Voll-II (Fixing Tariffs, Finance and Competition for the Power Sector in India)

A non-starter for years, reforms of the power sector in India has finally started. In relation to the country's growth and general economic buoyancy, the power sector has not only been slow with its reforms, but is also impeding the furthering and fostering of general reforms. In that respect, delays in reform not only bear a cost in terms of budgetary and human resource, but also in terms of credibility and opportunity. Every delay worsens the situation and the margin for wider option reduces. Some opportunities that are missed today will remain irremediably so.

An articulate vision makes a pivotal difference and this is now the time of understanding (i) the organizational tasks, (ii) the tariff aspects, (iii) the role of the private sector, (iv) the role of technology in the complex, variegated, state-specific, Indian scenario. This new volume in the series, Against the Current deals with tariffs and the effective role of the private sector, and offers analyses by specialists and practitioners of different disciplines. The objective is to give leads for creation of a diversity suitable to face challenges of a post-developmentalist running of the power sector.

This book includes studies and papers presented and discussed at a seminar jointly organized by the Centre de Sciences Humaines and the Indian Institute of Technology, Kanpur in September 2003.

Joel Ruet is Marie Curie Research Fellow at the London School of Economics and Associate Researcher, CERNA, Ecole des Mines, Paris and teaches in Jawaharlal Nehru University, New Delhi. He has specialized in the study of economic reforms of the Infrastructure and Urban sectors in India.

A non-starter for years, the reform process of the power sector in India has finally started. One certainly should be content with this, yet, one cannot help asking what is this reform about?

As a case in point, given the specificities of the public sector in India, there should be nothing such as a single direction or a monolithic reform. Looking back in time, quite a few tools have been established like 'availability-based tariffs' that allows rationalizing a bit of the power generation, or like the Accelerated Power Development and Reform Programme, a self-labelled 'instrument to leverage distribution reforms' that allows the operation of the systems on a large scale, though not in a systematic fashion, or again like Power Trading Corporation that trades and optimizes a part of the energy, leaving a lot to be done yet. Regulatory Com-missions have now clearly established themselves, even if they require further strengthening of their regulatory capacity. An am-bitious Electricity Act now does provide a potentially flexible framework for radical change, even if it has been rightly called `futuristic' for the time being.

No doubt, these are areas of satisfaction, and undoubtedly others will also come about. But time is an issue in this case. In relation to the country's growth and general economic buoyancy, the power sector has not only been slow with its reforms, but is also impeding the furthering and fostering of general reforms. Viewed through the social prism, the cost to the poor is immense. Also, there is a wager today in trying to re-invent the role of the state, be it as a facilitator or as a regulator. In that respect, delays in reform bear a cost in terms of budgetary and human resource, but also in terms of credibility and opportunity. Every delay worsens the situation, and the margin for wider options reduces. That way, every delay is a lost chance and a missed occasion to the very possibility for the state to reinvent itself. Some opportunities that are missed today will remain irremediably so.