“Delicensing of Electricity Distribution Sector” addresses the challenges and reforms needed for India’s electricity distribution sector, particularly focusing on delicensing and the introduction of competition. Despite successes in generation and transmission through private sector involvement, distribution remains problematic due to state monopolies, operational inefficiencies, and financial instability among discoms (distribution companies). The Electricity Act of 2003 laid the foundation for competition but didn’t achieve significant reform in distribution.
The paper advocates for delicensing as a means to introduce competition, allowing private companies to operate within the same geographic areas. This approach could enhance service quality, efficiency, and consumer choice. However, challenges such as network redundancy, the financial burden on discoms, and issues with policy implementation persist, limiting progress. Previous schemes like UDAY aimed to alleviate financial stress on discoms but have fallen short, necessitating further interventions.
The proposed amendments to the Electricity Act, such as enabling open access and allowing multiple service providers, are expected to foster competition. Additionally, reforms in tariff policies, subsidy restructuring, and the implementation of smart metering are suggested to improve financial viability. The success of these measures requires balancing privatization with regulatory oversight, ensuring equitable access to power, and strengthening institutional frameworks for accountability and policy enforcement.
AY Associates 
Leave a comment