Protecting Power: The Politics of Partial Reforms in Punjab’s Electricity Sector

By Ashwini K Swain
Regulatory Assistance Project
22 May 2017

By achieving the longstanding national aspiration of universal access and recording a per capita consumption of nearly double the national average, Punjab’s power sector appears to be a successful case of electrical development. Despite good performance in loss reduction and collection efficiency, both factors that ail many electricity utilities in India, Punjab’s only distribution utility is still grappling with financial loss and a high debt almost equal to one year’s revenue requirement. The state has been in the news for extending free power, which increases the subsidy burden on the state economy. The state has recently joined the bandwagon of the UDAY (“Dawn”) electrification plan in an effort to turn around the finances of the distribution company.

Against this backdrop, this paper aims to understand how the sector has evolved over more than a decade of reforms. It analyses the developments around power sector reforms in Punjab, with the objective to examine the policy choices and outcomes and identify the winners and losers at the state level. It also analyses the political-economic drivers for these policy choices and how they deviate from or comply with the signals from the Centre. Drawing on the findings, the paper explains the futility of unsolicited populism, the limits of the Centre’s push for reforms, and how the state has managed to sustain the power dynamics in the sector through skin-deep reforms and minimal institutional restructuring. Finally, it analyses the implications of past experiences and prevailing power dynamics for ongoing and future reforms.