The Centre’s proposed amendments to the Electricity Act, 2003, aim to strengthen the franchisee model in the power distribution segment. A new article in the Economic and Political Weekly argues that it is a push for privatization in the hope to cut procurement and operation costs for financially distressed distribution companies. The sector grew slower than expected even before the pandemic, and the Central Electricity Authority also lowered demand projections. Hence, privatizing distribution is not the answer to the problem of rising procurement cost. Robust planning at all levels of government and integration of generation, transmission and distribution is required, not hasty privatisation, to address the long-term crises of the power sector, concludes the article.

Source: Mint November 05, 2020 04:07 UTC