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Report on Performance Evaluation of Electric Supply Utilities in India
IndiaCore, Oct 2009, Pages: 270
The Report focuses on evaluation of the performances of the Electric utilities in India. The work is particularly significant in the context of the ongoing reforms in the Indian electricity sector. Unfortunately, the concept of efficiency in the delivery of power services has been historically alien in the Indian context (even outside India, efficiency measurement studies have been relatively scarce in developing countries), and it is now being realized that efficiency evaluation is an integral component of any comprehensive reforms program.
The efficiency evaluation is also necessary for generating competition in the sector and for sector regulation and scientific tariff setting. Hence, it is vital for the success of any reforms program to review the performance of existing utilities. Based on the productivity and efficiency analysis, benchmarks can be set, and targets for improvement may be identified.
The Report is coming at a crucial time when the Indian government has initiated measures that promise to revamp the sector. The work presented in the Report is a pioneer study on evaluation of performances in the Indian power sector, as so far no known study has attempted such comprehensive sector measurement by employing advanced benchmarking technique such as the Data Envelopment Analysis (DEA) employed in the present analysis.
Such a study can be regarded useful from the following viewpoint:
1. The study provides the efficiency scores of SOEUs & distribution utilities so that they can rank themselves, identify their shortcomings, set targets, and try to achieve these targets
2. The model can be extended for use by regulatory commissions for tariff setting, and as a tool for developing a monitoring system.
3. The analysis can have future application in the form of X-factor calculations under the incentive based regulation
4. The results can be used for preferential funds allotment under various government schemes such as the allocation of the Accelerated Power Development and Reforms Program (ARDRP)
5. Such a study can help create awareness and competition amongst the SOEUs, for sustained improvements in the distribution sector
Objectives and Scope of the Report
The objective of this report is to evolve a framework that may be applied for evaluating efficiencies of the Indian electric supply utilities in the Pre and Post Electricity Act 2003 periods. The work also aims to discuss some of the related policy issues for the sector in the context of sector sustainability.
More specifically, the scope of the work presented in this report comprises the following
1. To review the Indian electricity sector, and the related reforms program.
2. To establish the need for evolving performance appraisals of the power supply utilities in India in the current context
3. To carry out an impact assessment of the newly enacted Electricity Act 2003.
4. To study the distribution sector critically and identify the major inefficiencies prevalent
5. To measure efficiencies and productivities of utilities in the Pre and Post Electricity Act, 2003 era, and to examine results in the policy context to suggest possible sector improvement
The work will be particularly useful to various stakeholders in the power industry including the government and the public bodies, regulatory authorities, funding institutions, development institutions, power producers, utilities and the consumers. The results of the study can provide a common basis for informed policy debate and decisions, and can facilitate in initiating a dialogue between stakeholders.
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