Why are we powerless?: examining power theft in India
Student name: Ms Vasundhara Gaur
Guide: Dr Eshita Gupta
Year of completion: 2015
Host Organisation: TERI University
Abstract: Electricity theft is pervasive in India. Due to this rampant vice, a bulk of the electricity that is supplied is lost in transmission and remains unaccounted and unpaid for. This adversely affects the revenues of power utilities and the quality of supply. Therefore, this thesis studies the key factors that determine power thefts in 29 Indian states during 2005-2009 through an econometric study using data from the Central Electricity Authority (CEA) of India.
The results indicate power thefts to be closely associated with indicators of governance like corruption and state tax to GDP ratio. An increase in collective efficiency was also vital in impacting electricity thefts negatively. Socio-economic indicators like lower poverty, increased literacy, and lower urbanization were found to be key in ensuring lower transmission and distribution (T&D) losses. The degree to which an economy is dependent on agriculture was also responsible for higher power thefts.
Variables of infrastructure like the length of T&D lines, total installed electricity generation capacity and the presence of private players negatively impacted power thefts but no such relation could be established between the extent of T&D losses and percentage of households electrified, the average cost of supply of power utilities or the total capital employed by them. The dummy variable that indicated whether the political party ruling at the centre and the state was same also turned out to be significant and positively related to electricity theft. Similarly, the impact of a cold climate on power thefts was also found out to be positive.
Electricity thefts can be reduced by encouraging private participation, increasing collective efficiency and overall governance, rationalizing the electricity tariff, curbing corruption and discouraging attitudes that view the theft of electricity as an acceptable social norm.
Keywords: Power theft, T&D losses, Indian state.
