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A Useful Compendium

Satya Sivaraman

By Raj Singh Niranjan
Universal Law Publishing Co., Delhi, 2005, pp. 357, Rs. 295.00


Among the different incarnations of energy, electrical power occupies a unique position for its ease of use and range of applications. Switch off electricity from modern life and you might as well turn off all industrial development, agricultural prosperity, urban and rural services and indeed lose most of the amenities that help improve our quality of life. It is therefore not surprising that successive Indian governments since Independence have given top priority to the generation, transmission and distribution of electricity.   Till recently almost all such development of the power sector in the country has been through state-owned utilities and financed by public investment. The achievements have been impressive. Starting from an installed capacity of just 1300 MW in 1947 India today has a total installed capacity of 108,000 MW produced through a mix of hydro, thermal, wind and nuclear power. The public sector National Thermal Power Corporation is the world’s sixth largest thermal power generation utility.   And yet for all its successes the Indian power sector has its problems too. On the one hand despite major advances there are still large parts of the country, mostly rural areas, without access to electricity. On the other hand the State Electricity Boards, through which much of the power is generated, transmitted and distributed have also been running into severe financial losses over the years thus hampering their ability to invest further in new capacity.   This has been due to a variety of factors ranging from non-payment of bills by large urban industrial consumers, arbitrary subsidies provided to special interest groups like big farmers and even large-scale theft of power by the politically well connected Since the mid-nineties a solution to the financial problems of the state-run power sector has been sought by the Indian government through the privatization of power utilities—a highly controversial but growing trend around the globe in the past two decades. While supporters of privatization say that this is the only way to improve efficiency as well as the financial viability of the power sector its critics contend that a simple reform of publicly owned power utilities without selling them off would serve national interests better.   So far the privatization lobby has had the upper hand politically with several Indian states moving in that direction step by step. Apart from allowing private players in the form of Independent Power Producers direct entry into the power sector, privatization has involved the ‘...

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