Power Sector Reform - a Case Study of Delhi
POWER SECTOR REFORM
- A CASE STUDY OF DELHI
JAMIA MILLIA ISLAMIA, N. DELHI
Submitted By: Abhishek Kumar M. A. (F) Economics
Supervisor: Prof. T. A. Farooqui Department of Economics JMI
Head of Department: Prof M. S. Bhatt Department of Economics JMI
CONTENTS
1. Introduction 2. 3. 4. 5. 6. 7. 8. Indian Power Sector – Current Scenario Background to the Reforms Reform Process Current Scenario Literature Review Objectives Hypotheses Methodology & Data Sources Reform in Power Generation and Its Impact Reform in Power Distribution and Its Impact Conclusion References
1 2 3 6 8 11 15 15 16 17 22 28 30
INTRODUCTION
It is a critical infrastructure on which the socio – economic development of a country depends. Supply of electricity at reasonable rate is essential for overall development. Reliable and quality power at competitive rates to Indian industry is necessary to make it globally competitive. Services sector has made significant contribution to the growth of our economy. Availability of quality power is very crucial to sustained growth of this segment as well.
Exclusive dependence on government for the provision of all infrastructure services causes difficulties concerning adequate scale of investment, technical efficiency, proper enforcement of user charges, and competitive market structure. At the same time, complete reliance on private production, particularly without appropriate regulation, is also not likely to produce optimal outcomes. Therefore, in the last two decades the power sector in both developed and developing countries has been subject to restructuring. Although the approaches to reform have varied across countries, the main objective has been to improve the economic efficiency of the sector by introducing private capital, liberalizing markets and introducing new regulatory institutions. Regulatory bodies are needed because of the kind of market the power sector forms, i.e. more or less there is little scope for
- A CASE STUDY OF DELHI
JAMIA MILLIA ISLAMIA, N. DELHI
Submitted By: Abhishek Kumar M. A. (F) Economics
Supervisor: Prof. T. A. Farooqui Department of Economics JMI
Head of Department: Prof M. S. Bhatt Department of Economics JMI
CONTENTS
1. Introduction 2. 3. 4. 5. 6. 7. 8. Indian Power Sector – Current Scenario Background to the Reforms Reform Process Current Scenario Literature Review Objectives Hypotheses Methodology & Data Sources Reform in Power Generation and Its Impact Reform in Power Distribution and Its Impact Conclusion References
1 2 3 6 8 11 15 15 16 17 22 28 30
INTRODUCTION
It is a critical infrastructure on which the socio – economic development of a country depends. Supply of electricity at reasonable rate is essential for overall development. Reliable and quality power at competitive rates to Indian industry is necessary to make it globally competitive. Services sector has made significant contribution to the growth of our economy. Availability of quality power is very crucial to sustained growth of this segment as well.
Exclusive dependence on government for the provision of all infrastructure services causes difficulties concerning adequate scale of investment, technical efficiency, proper enforcement of user charges, and competitive market structure. At the same time, complete reliance on private production, particularly without appropriate regulation, is also not likely to produce optimal outcomes. Therefore, in the last two decades the power sector in both developed and developing countries has been subject to restructuring. Although the approaches to reform have varied across countries, the main objective has been to improve the economic efficiency of the sector by introducing private capital, liberalizing markets and introducing new regulatory institutions. Regulatory bodies are needed because of the kind of market the power sector forms, i.e. more or less there is little scope for