Sector Update

Power Sector Policy Framework

Power distribution reform is fundamental to improving commercial performance and financial viability of the power sector in India. Recent initiatives include the enactment of the Electricity Act 2003, which provides a framework for a more competitive, transparent and commercially driven power sector. The Act recognizes the need for a strategy that distinguishes urban power distribution from rural electricity supply.

The Re-structured Accelerated Power Development Reform Program (R-APDRP) initiative is aimed at financing the modernization of sub-transmission and distribution networks. It demonstrates the recognition and commitment by the Ministry of Power (MoP) to urgently address the issue of reducing losses and improving the quality of power delivery.

The National Electricity Policy (PDF) approved by the Union Cabinet of India in February 2005, seeks to expedite rural electrification and ensure supply of power at a reasonable rate for the overall development of rural India. The policy has set the minimum lifeline consumption of electricity at one unit (kilowatt hour) a household a day, and envisions fully meeting the power demand by the year 2012.