The power sector restructure and reforms: From Government Failure to Market Failure

Electric power is a major infrastructure in all-economic activities. Growth of infrastructure will definitely induce the economic development in many ways. Electricity as a major input of economic development is having multiplier effect on gross national product, national income, investment, employment etc. It alleviates poverty, ensures economic sustainability, and induces investment in industry, agriculture and service sector. Thus it is imperative to develop and provide infrastructure facilities and services. Governments have been traditionally well aware of this and have given high priority to investment in infrastructure sector. Consequently, infrastructure services have been predominantly provided by the public sector in almost all countries. The restructure and reforms have increased the installed capacity, power generation, availability of power but the positive impacts of power have not transmitted to ultimate consumers. Therefore, government as well as quasi-market systems have failed to ensure adequate, reliable, continuous power supply to consumers at affordable prices.

Dr. Premakumara, G.S. is assistant professor of Economics at University of Mysore where he has taught since 1999. His research interests include human development and infrastructure and the teaching of Econometrics. He has published numerous articles in both areas.He is also the author of Dictionary of Economics and Commerce, Research Methodology.