The Planning Commission has said privatisation of the corporatised state electricity boards is no solution to the problems of the power sector. Instead, an inefficient private utility may be a greater drag on the economy than a government-run company.
Speaking to Business Standard the new advisor of power and energy division SP Sethi has said that it is the raising of the efficiency of the power utilities which is the key to reforms in the sector. He said the commission is working with the power ministry on a plan to work with some of the state governments to demonstrate the benefits of the reforms to other states.
He said that over the last few years the efforts made to revive the State Electricity Boards has created a large degree of awareness among the state leadership on the primacy of power reforms.
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But there has been very little of real move forward on the issues. The advisor said now is the time to commit the leadership of some of the states to take up the business of going ahead with transforming the power business in their states.
Speaking about the experience of World bank and ADB who have been attempting the same thing with several states in the country for the past few years, Sethi whose last tenure was in the world bank said the results have not been impressive. Naturally the other states are yet to be convinced about the efficacy of splitting the SEBs to corporatise and in any cases to privatise them.
He also said there is an urgent need to appoint people with a sound knowledge of the science of regulatory issues in the central and state level electricity regulatory bodies that are being set up now.