30/11/2021 - Indian Economy

KEY POINTS

·        States have strong incentives to favour important political constituencies by charging lower tariffs, selectively enforcing against unauthorised use etc.

·        A recent Niti Aayog report argues that privatisation would be difficult when a discom’s service area is more rural.

·        Given the tariff differential and difficulty of billing, collection, and in some cases, metering, the cost of servicing rural and agricultural consumers becomes commercially challenging.

·        Policymakers need to also think through the interplay between the electricity regulators and the insolvency tribunal.

·        For instance, the US bankruptcy code explicitly preserves the regulatory agencies’ rate-setting authority under a plan of reorganisation. There is no similar provision in the IBC.

·        Insolvency of such utility service providers may need special treatment to ensure continuity of supply.

·        Wide-scale disruption of such services could have disastrous consequences for an economy. For this reason, the UK restricts the rights of energy suppliers and their creditors to initiate insolvency proceedings.

·        If that is not feasible, Ofgem or the Secretary of State may apply to the court to initiate a special administration regime that ensures continuity of supply.

·        Comparable institutional safeguards may be required in India, while being mindful of state capacity constraints. The policy solutions that emerge should be informed by foreign precedents but rooted in Indian realities.

kindly review and provide suggestions sir 

Please review 

Please review 

https://drive.google.com/file/d/1ZB4kjSuMpWz5cg6crTg0Tg-XE2VwVyeL/view?usp=sharing