Covid-19 Economic Stimulus and State-level Power Sector Performance: Analyzing the Efficiency Parameters

Against the backdrop of the COVID-19 pandemic, the Government of India, as part of economic stimulus package, increased the borrowing limit of the States from 3 to 5 per cent of GSDP. The power sector reform at the State-level is one of the criteria to avail this extra-borrowing. We analyse the efficiency parameters of power sector and observe that there are statewise differentials in the financial and operational indicators of power sector. We notice that the average AT&C (Aggregate Technical and Commercial) losses that should have been 15% by 2018-19, presently, on average, stand at 26.15%. The ACS-ARR gap (the gap between Average Cost and Average Revenue) has also widened. The power tariff revisions have also not been implemented in the States, and the operational parameters in our analysis indicate widening inefficiencies across States in power infrastructure.