Power Sector Restructuring in Madhya Pradesh

This paper reviews the decade long restructuring of Madhya Pradesh's power sector, a process that began in the early 1990s, supported by the Asian Development Bank. The failure of the private sector in power in the state is attributed to a lack of proper planning, unaffordable tariffs, and the inability of the state electricity board to judiciously grant escrow covers. The ADB-assisted restructuring plan was pushed through in complete disregard of the lessons from Orissa's power sector restructuring exercise. In effect, it has been a lost decade; there is no improvement in the performance of the power sector in MP. Small consumers are burdened with multifold tariff hikes and the state government with subsidies. The paper also examines the role of the state electricity regulatory commission.