In India, the power sector was mainly under the government ownership (>95% distribution & ~98% generation) under various states and central government utilities, till 1991. The remarkable growth of physical infrastructure was facilitated by four main policies:
1) |
centralized supply and grid expansion |
2) |
large support from government budgets |
3) |
development of sector based on indigenous resources |
4) |
cross subsidy |
Cross-Subsidization means that a certain class of customers are charged higher prices for energy usage, while another class is charged less. This is done with a social objective in mind
In mid 1990s, Orissa began a process of fundamental restructuring of the state power sector. This consisted of a three pronged strategy of:
1) |
Unbundling the integrated utility in three separate sectors of generation, transmission and distribution, |
2) |
Privatization of generation and distribution companies and, |
3) |
Establishment of independent regulatory commissions to regulate these utilities. Meanwhile, some moderate steps were taken towards reforms until the Electricity Bill 2003 was approved by Parliament in May 2003. |
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