This shows how diffused the government's focus on the sector has been. All the reform efforts so far have focused on generation. Transmission and distribution need focus too - and, truthfully, the real problem is intermediation. Even if capacity and fuel availability increases sharply, the debt overhang with unreformed state electricity boards will still stop them from buying power - which means there will be little change on the ground. The country may indeed become "power surplus", as the government promises, but that will be meaningless unless there is a robust infrastructure in place to carry that power to the consumers.
Most electricity boards have been reporting losses for quite some time. This is a political creation: Much of these losses have resulted from free power to the farmers; the other factor is theft. There has been some talk of getting the private sector into distribution but that cannot happen unless the states introduce some kind of user charge for farmers. In its absence, the interest of the private sector may not go beyond cities, which will not fully solve the problem. The problem is that too few attempts have been made of late to bring them out of the mess. According to some estimates, the total accumulated losses on the books of electricity boards are in excess of Rs 2.5-lakh crore. Their balance sheets are too damaged to raise fresh debt. In recent times, some states have made higher provision to capitalise their electricity boards, but this is an exercise which will cost a lot of money. The United Progressive Alliance government introduced a scheme to restructure the finances of the electricity boards but there were no takers for it. The present government - which is proud of its federal approach - should focus on getting that scheme off the ground.