Push Power Reforms, User Charges
Concerned about the huge annual losses of state electricity boards (SEBs), the Economic Survey for 2002-03 has emphasised the need to push reforms and collect user charges in the power sector.
Improvements in distribution alone could push the growth rate of the gross domestic product (GDP) by over 1.5 per cent, the survey has noted.
The financial position of state electricity utilities has deteriorated rapidly in the past decade and losses have been rising, it says.
The survey has also urged the recently privatised Delhi and Orissa power boards to emulate the success of private sector power distribution in Mumbai, Kolkata and Ahmedabad. "The success will impinge upon effective enforcement of user charges," the survey says.
Lauding the reform initiatives undertaken by states, the survey notes that 25 state governments had signed agreements with the Centre for undertaking timebound reforms.
Nine states have already unbundled and corporatised their electricity boards, it says, adding that 22 states have constituted electricity regulatory commissions and 13 regulators have issued tariff orders.
The survey notes that there has been an improvement in terms of billing and collection in many states, especially Andhra Pradesh and Haryana. "The orders passed by state regulators reflect a trend towards tariff rationalisation," the survey says.
The survey says that once transmission and distribution reforms are in place, it will not be difficult to elicit private investments in generation.