A power distribution poser

EACH CASE OF PRIVATISATION HAS BEEN A LESSON FOR THE NEXT

- SOMIT DASGUPTA

AST MONTH (DECEMBER 2, 2024), the apex court ruled in favour of the government's intent to privatise the power distribution business in Chandigarh. The Supreme Court, in its verdict, decided not to interfere in the ruling of the High Court of Punjab and Haryana, which had upheld the decision of the government of India to privatise.

The central government had announced in 2021 its plans to privatise the distribution business in all Union Territories (UTs), currently being undertaken by their respective power departments. The ball has been set in motion in all the UTs, and the first success was in Dadra and Nagar Haveli and Daman and Diu where a well-known private utility took over in 2022. In all the other UTs, the matter is being pursued, although in the case of Puducherry it has gone to litigation just like Chandigarh.

Privatisation of the power distribution business is a very old story in India, with Odisha being the first state to take this step way back in 1997, followed up by another round in 2020. After Odisha, complete privatisation across the entire geographical area of a state has only taken place in Delhi. There are, of course, some stray private utilities operating in many cities—for example, in Mumbai, Kolkata, Ahmedabad, Surat, Noida, etc.

Privatisation of the distribution business has always been a very tricky problem because of the resistance it has faced, mainly from the existing employees of incumbent utilities which are all government entities. It has also been exploited for political purposes by the opposition parties in the states concerned. The employees resent it as they feel that will face adverse service conditions, including retrenchment post-privatisation.