How to reform Uttar Pradesh’s troubled power sector

How to reform Uttar Pradesh’s troubled power sector

A rare window is open for power sector reform in Uttar Pradesh. The Bharatiya Janata Party (BJP), in office in both Lucknow and New Delhi, has a sweeping mandate to transform Uttar Pradesh’s troubled electricity situation.

The party has made two important commitments on this front. First, they have promised to ensure every household in the state has an electricity connection and access to twenty-four-hour reliable supply. Second, they have pledged to turn around the state’s five loss-making public distribution companies (discoms).

Progress in both areas is sorely needed. In 2017, more than 17 million rural households did not have a formal electricity connection. Supply remains unreliable in urban and rural areas, hampering economic growth.

Since the 1980s, the state’s public discoms have been accruing annual losses, the result of a large gap between the cost of supplying electricity and the revenue they recover from customers coupled with under-funded subsidised tariffs for domestic and agricultural users. Read More

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