Ease trading of power

India has developed infrastructure (railways, power, water, telecommunications, coal, oil & gas, etc) under state ownership and control. We have, with state ownership, control and management, inculcated in the public mind that infrastructure services are a right. It is expected that they would be made available to all, for below-cost charges, or even for free. In this process, governments have lost enormous sums, and have reached a stage when they do not have resources to maintain, renovate and expand the infrastructure for these services to be universally available. Railway passenger fares are kept low while the goods traffic pays more, resulting in a terrible financial condition for the Railways, with the government having to provide funds. Electricity undertakings have accumulated huge losses. Their unserviced borrowings have made balance sheets of nationalised banks unhealthy. State-owned telecom enterprises (BSNL, MTNL and ITI) are either sick or in a terminal decline. Nationalised coal mining, thus far, has had no competition and shows healthy profits by exploiting buyers. The short point is that government operations have proven to be inefficient, technologically-backward, unreliable on supply commitments, with the added burden of poor quality.
All infrastructure services require huge investments. In some cases, they become natural monopolies. Practically, no investor can even try to set up additional transmission lines (for electricity, oil or gas) between the same destinations as the existing government-owned operators influence policies and prevent entry.

In electricity, state ownership and control, biased and thoughtless regulation by the government, and statutory regulators and short-sighted political decisions have made the entire energy sector inefficient and unreliable, and have put huge burdens on nationalised banks that lent to power projects. The arrogance of monopoly and size makes state-owned operators even harass and impose their views on friendly and potentially major energy-supplying neighbours such as Bhutan and Nepal.

 

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