Political Economy of Electricity Reform: A Case Study in Gujarat, India

Christopher Joshi Hansen and John Bower
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Christopher Joshi Hansen: Oxford Institute for Energy Studies & Dept. of Geography, Oxford University
John Bower: Oxford Institute for Energy Studies

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Abstract: In India, the supply of electricity relies heavily on a virtually bankrupt and sometimes corrupt system of state electricity boards (SEBs), which have failed to bring electricity to approximately 40% of rural households. High subsidy levels to agriculture and domestic customers and widespread electricity theft have resulted in weak financial conditions for the SEBs; and thus-top down remedies for improving the electricity system are not likely to be successful. The problems are particularly acute in Gujarat state, which represents a microcosm of the key issues faced throughout India, where a complicated and overlapping regulatory structure and new entrant prohibitions have stifled new electricity sector investment. This paper identifies and analyses the political and economic factors that have hindered progress. The main finding is that government may meet with greater success if it encourages and facilitates local private investment in small-scale electricity production, as a ‘bottom-up’ solution, rather than continuing attempts to force through ‘top-down’ reform of the existing state-owned electricity sector against entrenched interest groups.

Keywords: power sector; reform; liberalisation; electricity (search for similar items in EconPapers)
JEL-codes: H54 K23 L94 Q48 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2004-01-13
New Economics Papers: this item is included in nep-com, nep-pbe and nep-pol
Note: Type of Document - .pdf; prepared on WinXP; pages: 54; figures: 6
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpot:0401006

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