Make states bleed for the lack of power sector reform

The central government is expected to announce a new reform package for the power sector—most likely in the budget—and the plan is to reduce ATC loss levels in the sector to 12%; the gap between the cost of electricity and the sale price is to be reduced to zero. To do this, the plan—there are two, actually, for state electricity boards (SEBs) in dire and more dire trouble—includes the use of pre-paid meters, ensuring that SEB operations are either privatised (as has happened in Delhi) or run through franchisees, state governments committing to setting up dedicated police stations to tackle power theft, SEBs clearing all government and private sector debt within a year, releasing all subsidy payments (for agriculturists, by way of example) on time, adhering to the new trajectories for ATC and cost-tariff reduction/elimination. Funding by government-owned banks and financial institutions is to be clearly linked to the states undertaking these reforms, and one of the presentations prepared by the ministry of power talks of “no fund release against non-achievement of any measure for a year”.