Governance of Indian state power utilities: an ongoing journey

By the late 1990s, the technical and
financial performance of the power sector in India had
deteriorated to the point where the Government of India had
to step in to bail out the state utilities, almost all of
which were vertically integrated state electricity boards
(SEBs). Considering that the dismal performance of state
utilities reflected internal and external shortfalls in
governance, the new Electricity Act of 2003 (EA 2003)
mandated the unbundling and corporatization of the SEBs,
along with the establishment of independent regulators. This
was expected to bring about a more accountable and
commercial performance culture, with concomitant results in
improved utility performance. The rest of this review is
organized as follows. Chapter two summarizes the
institutional context and relevant developments over the
past two decades. Chapter three focuses on the corporate
governance agenda adopted by the government and its
implementation, specifically relating to the structure and
functioning of utility boards of directors. Chapter four
reviews SERC regulatory governance. Chapter five analyzes
the correlation between key indicators of the quality of
regulatory and corporate governance and utility financial
performance. And chapter six concludes.