India has come up with a plan; laws which would boost competition and lower debt at its power distribution companies, but there are also risks as in a country where electricity is often used as a strategy for election purposes.
Importance schemes include allowing more services to work within the same circles, making mandatory regulators to set tax based on market costs, and defining payment procedures and deadlines.
Prime Minister Narendra Modi’s government says the overhaul is essential to unclog a sector that is key to its energy transition ambitions but is choked with $75 billion of debt. Critics say the amendments pave the way for big companies to take over the sector as richer customers would switch to private firms, leaving state-run utilities with users who rely on subsidies.
Shailendra Dubey said who is the chairman at the All India Power Engineers Federation, “The day the bill is presented in the parliament, power industry employees around the country will go on a strike.”
He further added that “This amendment only allows private companies to benefit from the states’ distribution networks and cherry-pick profitable distribution circles.”
Modi informed last week that unpaid bills worth nearly 2.5 trillion rupees, and asked states to clear the dues. State governments mentioned that the subsidies protect poor citizens and small businesses.