Among Indian states, Gujarat’s electricity distribution sector has come to be regarded as exemplary. Its distribution companies have A+ credit ratings and acceptably low loss levels, and provide 24/7 power throughout the energy surplus state, with separate feeders for up to eight hours a day of agricultural supply. Reforms enacted in Gujarat subsequent to the national Electricity Act of 2003 have now been initiated nationwide. What are the factors that have made this sector such a successful model, and what particular set of circumstances enabled them to work in Gujarat? Are there shortcomings that are glossed over in the dominant narrative on its performance, such as the slowdown in solar energy growth despite Gujarat’s championing role in this regard even prior to the national solar policy of 2011? Are the benefits uniformly distributed, or do some stakeholders continue to benefit at the cost of others, owing to the present configuration of incentives and institutional structure? Based on 26 expert interviews and secondary research, this study addresses these questions, finding that Gujarat’s gradual but substantive application of key aspects of reforms has been instrumental for its relative success in the distribution sector, eased by a favourable consumer mix and supportive policy environment. An encouraging picture of the sector emerges, especially pertaining to innovative and pioneering efficiency measures. It is also noted, however, that some roadblocks exist for a truly committed push toward a country-leading sector, in the form of mixed progress on competition and renewable energy development and the persistence of lacunae, such as popular engagement with the sector.
What Powers Success on the Ground? The Gradual Reform of Electricity Distribution in Gujarat
April 29, 2017
- Siddharth Sareen