Madhya Pradesh’s electricity distribution sector stands at a critical crossroads, grappling with mounting financial losses, operational inefficiencies, and regulatory bottlenecks. The Electricity (Amendment) Bill 2022 proposes transformative reforms, such as introducing competition through multiple distribution licensees, enhancing regulatory autonomy, and restructuring power procurement practices, to revitalize the sector. But will these measures address the systemic challenges plaguing the state’s DISCOMs?
This policy paper critically examines the structural and financial hurdles faced by Madhya Pradesh’s power distribution companies, including inherent revenue limitations, cash flow crises, weak regulatory frameworks, and costly power purchase agreements. It evaluates the potential of the proposed amendments to foster sustainable reforms while balancing public welfare and commercial viability. By contextualizing these issues within global best practices and India’s evolving energy landscape, the analysis aims to inform policymakers, industry stakeholders, and citizens about the opportunities and risks of privatizing distribution utilities.
Authors:
Ajay Yeshwanth Varthamanan, Indian Audit & Accounts Service, Comptroller and Auditor General of India, and Master in Public Administration candidate at the Lee Kuan Yew School of Public Policy, National University of Singapore.
Nikhil Goyal, Assistant Audit Officer, Indian Audit & Accounts Department, Comptroller and Auditor General of India.
Views expressed are strictly personal and do not reflect the official stance of any institution.
The featured photograph is for representation only.