Bumps ahead

The Covid-19 pandemic is set to shrink economic activity glo­ba­lly this year, with ripple effects across all sectors. The inherent weaknesses of India’s power sector are getting exacerbated in this scenario.

Demand shock: As commercial and industrial activity reaches a standstill across major parts of the world, power demand has plummeted. In India, demand is down by about a third, and this will lead to a disproportionate burden on the distribution companies, since higher priced commercial and industrial loads cross-subsidise residential power. In countries like Italy, where domestic power is priced higher than commercial and industrial loads, the impact on