| Summary: | Indian policy discourse on the most suitable form of agricultural electricity
tariff has come full circle. Until the early 1970s, all state electricity
boards (SEBs) charged their tubewell owners based on metered consumption,
but, due to a whole range of administrative issues, this was
later changed to a flat tariff in the early 1980s. However, the flat tariffs
remained low over the years and the SEBs started making large losses.
Low flat tariffs also led to the over-exploitation of groundwater in arid
and semi-arid states of India. Therefore, recently, there has been a renewed
interest in reforming the electricity sector. This has been triggered
by the poor financial status of most SEBs. The main element of
electricity sector reform has been the unbundling of services – that is,
the separation of the electricity generation, transmission and distribution
functions and the universal metering of all consumers. Almost
50% of India’s pumps depend on electricity for pumping groundwater
and hence, reforms in this sector profoundly affect the groundwater
sector.
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