Indian power sector employees protest privatisation

6 February 2001

More than a million electricity workers protested for a day in December against a proposed bill that follows “World Bank prescriptions” to privatize the power sector in India. According to B S Meel, general secretary of the Electricity Employees Federation of India, the bill does not take into account 37 per cent of the population who are without electricity. Neither does it protect industry and agriculture from high commercial tariffs charged by the independent power producers.

Since the privatization process started in Orissa state in 1995, the Government of India has worked with the World Bank to remove government from operation of the power sector. The reforms involve establishing an independent regulatory framework for the sector, reducing subsidies, introducing cost-recovery based tariffs and selling distribution assets to private operators.

Prayas, an Indian NGO working on energy policy issues, calls for caution in the rapid privatization process proposed by the World Bank. It claims the process will primarily serve powerful vested interests, as there are weak legal provisions regarding transparency and direct public accountability. They also say regulatory agencies will have to be transparent in their functioning, accountable not only to “economic” actors but also to the public.