Diagnostic review of power sector in Haryana: assessing the underperformance, achievements and examining the implementation of reforms
Student name: Ms Soumya Prakash Nayak
Guide: Dr Kaushik Ranjan Bandyopadhyay
Year of completion: 2012
Host Organisation: Deloitte Touche Tohmatsu India Pvt. Ltd., Gurgaon
Supervisor (Host Organisation): Mr Manish K Sharma
Abstract: Recognizing the critical role of a well-functioning power sector in underpinning economic development, the Government of
India initiated power sector reforms in the early 1990s. In particular, the Government focused on the need to enhance
access and coverage, increase the quality and reliability of power supplied, and improve the efficiency and competitiveness
of the sector in order to support rapid economic growth and poverty reduction.
While significant structural and policy changes have indeed occurred over the past decade, the power sector continues to be
identified as a major constraint on economic activity, and the rapid growth of recent years is placing increasing stress on
the sector. Key concerns are: (i) poor commercial and technical performance (inadequate metering, aggregate technical
and commercial losses of around 40%), which has weakened the finances of state power utilities, lowering their ability to
attract investment while also requiring increasingly unsustainable subsidies from the state budget (ii) low access – 35
percent (44 percent in rural areas) of households lack access to electricity – combined with increasing demand; and, (iii)
deficiencies in the quality of supply, resulting in high coping costs.
Since electricity is a concurrent subject in the Indian constitution, implementation of national policies occurs largely at the
state level. Many states had restructured or corporatized their power utilities and unbundled their State Electricity Boards
into separate entities for transmission, distribution, and generation. Distribution has been privatized in Orissa and Delhi. A
total of 25 states have either constituted or notified the constitution of State Electricity Regulatory Commissions (SERC) and
21 SERCs have issued tariff orders. Twenty three states have achieved 100% metering at the 11 KV feeder level. Other
achievements include the introduction of an availability-based tariff regime, and the introduction of electricity trading as a
licensed activity.
To develop a better understanding of the reasons for continued under-performance of the sector on key dimensions, this is
designed to undertake a diagnostic review of the sector of Haryana. This review is a core element of the client’s due
diligence and will be an internally focused Knowledge Product aimed at identifying successful states and learning from their
experience, and building a knowledge base that can support the client’s operational program and dialogue in the Indian
power sector going forward. More specifically, the review will examine the implementation of reforms, assess achievements
to date, take stock of lessons learned, and identify priority areas for attention over the short and medium term.
The review is designed to be modular: it will explore key themes relating to the performance of the power sector in India.
The following themes have been identified for initial exploration:
• Implementation of Policy, Regulatory and Institutional Reforms in the Sector
• Assessment of Business Process Reforms and impact on Performance
• Operational and Financial Performance of Utilities
• Sources of Finance for the Power Sector
• Experience with Private Participation in the Sector
The primary outputs of this study will be:
A report providing a qualitative and quantitative assessment of the performance of the power sector of Haryana.
