This government has been quite proactive in the area of power reforms. But despite the measures taken, the sector continues to flicker. Among many reasons for this is the “social behaviour” where electricity supply is seen as a right.

Why should those who can afford to pay get electricity cheap? More importantly, can the system of direct benefit transfer (DBT) be used to ensure that the benefits go to those who need it the most?

Research at the University of Chicago and partner institutes on “The Consequences of Treating Electricity as a Right” states that “More than a billion people worldwide lack access to reliable electricity, despite multilateral efforts across the globe that have poured resources into improving electricity access and reliability in order to spur economic growth.”

It suggests that the root of the problem may lie in the fact that society too often views electricity as a right that does not need to be paid for.

This actually would be music to the Power Ministry’s ears, which has been grappling with the many issues afflicting this sector, while trying to make it more consumer-centric. The proposed amendments to the Electricity Act, 2003, in the form of draft Electricity (Amendment) Bill, 2020, had the following broad objectives: Ensure consumer-centricity, promote ease of doing business, enhance sustainability of the power sector, and promote green power. The proposal has been discussed at various public platforms.

So what is the way out?

According to Michael Greenstone, the Milton Friedman Distinguished Service Professor in Economics and Director of the Energy Policy Institute at the University of Chicago (EPIC), and his co-authors, Robin Burgess (London School of Economics & Political Science), Nicholas Ryan (Yale University), and Anant Sudarshan (UChicago), of the paper, “It is critical to provide lifeline electricity to the poorest, but doing so in a way that causes electricity markets to fail harms everyone. Our view is that no solution will work in the end, unless the social norm that electricity is a right is replaced with the norm that it is a regular product that people pay for, just like food, cell phones, etc.”…