Ebook: Plight of the Power Sector in India Inefficiency, Reform and Political Economy

An unfortunate historical coincidence that strengthened the TINA premise came
from the infamous dysfunctioning and the decay of the public sector. This in terms of
operational inadequacy and financial infirmity had its origin in the x-inefficiency that
permeated the whole pyramid of the functioning and in the political economy of
uncompensating populism and unmitigated corruption. It goes without saying that
economic incentives in conjunction with contractual coercion would take care of xinefficiency
problem that in general crops up in the vacuum of a sense of oneness and
ownness. On the other hand, measures that make up populism, despite its derogatory
connotation, as it is aimed at enlarging the popular support base of the political leadership
of the government at a social cost, have an undisputable content of social welfare and
thus stand above any rational censure. These measures have a desirable practical value
provided they involve a corresponding compensatory mechanism. The free/subsidised
power supply to targeted sections of consumers or rural electrification is a case in point
here. If the government could financially compensate the Electricity Board (EB) in full
and in time for the loss involved in such subsidisation, imposed on the Board as a part of
the socio-economic policies (read pork barrel politics) of the government, the system
could remain healthy. The political economy of corruption, the scope of which is much
larger under the new liberalism, requires, on the other hand, an ever-watchful civic
platform of checks and balances as a counter-force of public praxis against the rentseeking
pursuits of the political leadership at social cost.