RBI report calls for complete deregulation of power tariffs

Flagging higher electricity tariffs for businesses in India than in export competitors, a Reserve Bank of India (RBI) report has called for a slew of measures, such as deregulation of electricity pricing, greater role of the private sector in transmission and distribution, more focus on renewable energy, and reducing ‘deadweight loss’ to bring down the cost of power.

“Based on the experience gained so far from rationalisation of petroleum product subsidies, electricity pricing may also be completely deregulated. Levy of additional taxes/cess after deregulation must be eschewed as it could dilute the intended benefits of reforms,” the RBI said in its Report on Currency and Finance 2021-22.