The long-anticipated move towards restructuring and the eventual privatization of power distribution in Jammu & Kashmir is here. This is a major policy decision, fraught with far-reaching implications. On the face of it, the objective of the proposed corporate utilities - State Power Development Utility (SPDU) and State Transmission Utility (STU) – is to create new structural conditions so as to reduce the transmission and distribution (T&D) losses in the power sector. The guiding motivation behind this decision seems to be the failure of the existing power administrative system in recovering the commercial losses and arrest the T&D losses that have created a yawning gap between the revenue and the expenditure in the power sector. However, it would be foolhardy to imagine that this restructuring alone would create such conditions that would contain the deficit in the power sector. The fundamental issue that needs to be recognised is that in the current ad hoc system of political governance in Jammu & Kashmir state there are not going to be islands of efficiency in the government administrative system. And it is not only about the power sector. We hardly have an example of efficiency in the government system today if the inputs and the outputs are considered. In the absence of radical across-the-board administrative reforms, bottom-up accountability and democratic credibility in this state, it is hard to imagine structural adjustments in a particular department resulting in drastic changes in its performance. At the end of the day the interface between various systems and organs of the government is inevitable – which in current circumstances involves complex interplay between the political and administrative domains. The aim of reducing commercial and T&D losses is lofty, so is the objective of administrative efficiency in the power departments. However, it may not be prudent to expect this decision alone resulting in a sea change in the power sector. Every analysis involving structural adjustments must consider the larger governance and political environment.

Lastupdate on : Fri, 8 Jun 2012 21:30:00 Makkah time
Lastupdate on : Fri, 8 Jun 2012 18:30:00 GMT
Lastupdate on : Sat, 9 Jun 2012 00:00:00 IST