{"id":199562,"date":"2022-08-10T18:13:46","date_gmt":"2022-08-10T12:43:46","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=199562"},"modified":"2022-08-10T18:13:46","modified_gmt":"2022-08-10T12:43:46","slug":"powering-reforms","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/powering-reforms\/","title":{"rendered":"Powering reforms"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article:“Powering reforms\u201d,<\/strong> published in the Business Standard<\/strong> on 10th<\/sup> August 2022<\/strong>.<\/p>\n

\u201cPower plays\u201d,<\/strong> published in The Times of India<\/b>\u00a0on 10th<\/sup> August 2022.<\/strong><\/p>\n

Syllabus: <\/strong>GS 3 Infrastructure; Energy<\/p>\n

News: Recently,<\/strong> The Electricity (Amendment) Bill, 2022 was tabled in the Lok Sabha, and it was immediately sent to the Standing Committee on Energy for closer scrutiny and debate.<\/p>\n

The subject matter of electricity comes in the Constitution\u2019s concurrent list. Therefore, the Government of India has introduced a bill for reform.<\/p>\n

Background- The Electricity Act 2003<\/strong><\/h5>\n

The act tried to provide a new architecture to promote competition in a system that was hitherto defined by a maze of cross-subsidies<\/strong>.<\/p>\n

The Act tried to foster competition<\/strong> with the open access mechanism<\/strong>, which means a customer is not limited to a single supplier.<\/p>\n

Features of the Proposed Bill<\/strong><\/h5>\n

It proposes the principle of open access<\/strong>, i.e., the right of consumers to choose their electricity provider, regardless of who controls the physical infrastructure in their locality or state.<\/p>\n

The state\u2019s distribution infrastructure can be opened up to all licensees in the area.<\/p>\n

It will segregate carriage and content to circumvent the conflict of interest that is faced by the State-DISCOMS due to simultaneous owning of the distribution infrastructure and retail.<\/p>\n

There\u2019s also a provision that can lead to trimming the cross-subsidies.<\/p>\n

What are the possible challenges in front of the proposed bill and reforms?<\/strong><\/h5>\n

Since 2003, a number of attempts have been made to introduce the principle of open access in India. But these efforts died down due to strong opposition<\/strong> and poor drafting<\/strong>.<\/p>\n

There are fears that this Bill will die in committee because a number of members of parliament have argued that the bill infringes upon the states\u2019 rights to regulate electricity supply<\/strong> and pricing<\/strong>. It would be an example of the encroachment by the Union government into the state’s regulatory and legal domains.<\/p>\n

Further, the Central government has also not consulted the state governments <\/strong>during the drafting of the bill or before its introduction into the lower house. Therefore, the bill may face political backlash<\/strong> during passage in the house.<\/p>\n

In the past, open-access provision<\/strong>s were undermined due to exceptions and legal wrangling. For example, earlier only large consumers were able to choose their provider, which reduced the competitive pressures in the power sector.<\/p>\n

In 2015, a parliamentary panel said that open access was fairly good in the case of interstate access<\/strong> but unsatisfactory for intra-state.<\/p>\n

What should be done?<\/strong><\/h5>\n

The Union government is competent to introduce the bill because electricity is on the Concurrent List<\/strong> of the Constitution.<\/p>\n

The principle of open access would lead to competition, and the poorly-performing state electricity utilities may turn into better-performing providers in the coming years.<\/p>\n

The power subsidies should be transparently provided and not through cross-subsidization<\/strong> within the public-sector power company (state-owned DISCOMS<\/strong>. The cross-subsidies cause inefficiency and reduce competitiveness<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article:“Powering reforms\u201d, published in the Business Standard on 10th August 2022. \u201cPower plays\u201d, published in The Times of India\u00a0on 10th August 2022. Syllabus: GS 3 Infrastructure; Energy News: Recently, The Electricity (Amendment) Bill, 2022 was tabled in the Lok Sabha, and it was immediately sent to the Standing… Continue reading Powering reforms<\/span><\/a><\/p>\n","protected":false},"author":10343,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216,10496],"class_list":["post-199562","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","tag-times-of-india","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704910106},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/199562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10343"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=199562"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/199562\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=199562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=199562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=199562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}