New circuit-breakers

Tamil Nadu is perhaps the best example of the extreme populism, limited repair and near-complete hopelessness that dogs the country’s power sector. Between 2003 and 2009, there were no tariff hikes at all in the state, though there was a 9% hike in 2009-10, as a result of which the state’s accumulated losses were R40,700 crore in March 2011, or around a fifth of the power sector losses in the whole country. New chief minister J Jayalalithaa has now proposed a 38% hike in tariff levels—the petition has been filed with the state electricity regulator—but according to broking firm CLSA’s estimates, there will still be a revenue gap of R3,500 crore in 2012-13. And that’s assuming there are no hikes in costs of raw materials like coal—and we’re still not talking about making any dent in accumulated losses.

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