Distribution Sector Reforms in India: Past Reforms and Best Future Model

Abstract

Indian power sector has undergone varied reforms since 1991. The slew of reforms has led to increased electricity generation capacities, but the electricity distribution sector is still in disarray owing to losses on account of tariff cross-subsidies and asset idling. This study analyses past reforms targeted to resurrect the distribution sector and also analyses existing private privatisation model in electricity distribution. Expert opinions are studied by conducting in-depth interviews with industry stakeholders on the subject. It emerges that while the best immediate solution to the distribution sector crisis lies in increased privatisation, limits to the same are inevitable.  This study concludes by presenting recommendations that help draft Public Private Participation (PPP) models in distribution business, thereby creating a more conducive private investment atmosphere.