A square peg in a round hole
The regulatory framework of the Indian power sector is often criticised for the sector’s problems, particularly in the distribution segment. Various reforms have been suggested focused on the selection process for regulators, oversight mechanisms, and training of regulators. Structural reasons for the problems, however, have not been examined sufficiently. Therefore, we explore questions such as: Does the ownership of the distribution company influence the effectiveness of regulation? Are the incentives within the institutional and organisational structure aligned to promote good financial performance by the distribution companies?
