The distribution of electricity and its tariff has become a politically sensitive issue of the power sector. While political interventions in fixation of tariff have led to subsidization of electricity price, various reforms and restructuring tried to rationalize it. The reform and restructuring agenda has led to the rationalization of tariff in various states including Delhi in India. While before coming to power the Aam Admi Party (AAP) declared to reduce tariff by 50 percent in Delhi, the Distribution companies (Discoms) were of the view that bringing down tariff by 50 percent is an impossible task as they are already sitting on losses worth Rs. 110,000 million. In this context, we are trying to make a performance analysis of Discoms to investigate why 50 percent tariff reduction is impossible. The data used in this study were collected from secondary sources like Delhi Electricity Regulatory Commission (DERC), Central Electricity Authority (CEA) etc. The study is based on both qualitative and quantitative performance analysis of Discoms. The results we found that bringing down tariff by 50 percent are an impossible task and there is a need for effective reform and policy change in power sector in Delhi.
Keywords: Privatizations, tariff, discoms, revenue
Jel Code: K23, L11, L94