ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Bitter Medicine

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The ongoing strike in several states by unions in the  power sector serves to highlight the crisis in the sector.   Low per capita power consumption figures, high peaking shortages, economically insane tariff policies, poor technical efficiency in terms of plant availability, plant load and losses during transmission and distribution, grossly inadequate investment in transmission and distribution, massive corruption that colludes with ubiquitous theft of power from the state-owned distribution networks, lack of accountability and work ethics within the power sector – all the ills of the power sector can be traced to the government monopoly over power in combination with bankrupt politics.

If politics were to turn benign and sensible, continued state monopoly could, at a pinch, still meet the country’s power needs, even if at a lower level of efficiency than would be possible otherwise. However, the direction of reform in the power sector has to be to abandon the government monopoly. This is so, not just because there is no magic at work that causes politics to suddenly turn benign and sensible. Another factor that necessitates the unbundling of the power sector and entry of private operators into most of the activities that emerge from the bundle is the technological and managerial evolution that has taken place in the power sector, which makes the sector amenable to healthy competition.

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