CASE STUDY ON MONOPOLY:- PERFORMANCE ANDFUNCTIONING OF STATE ELECTRICITY BOARD OFINDIA.
Introduction:
Before we move to our topic, which is case study on performance andfunctioning of the state electricity board of in India, we must know what themonopoly in the real sense and type of advantageous it provide, so thefollowing is given the data which shows us all about monopoly.
MONOPOLY IS A WORD
derived from two Greek word monos (alone orsingle) and polein (to sell)) exists when a specific individual or anenterprise has sufficient control over a particular product or service todetermine significantly the terms on which other individuals shall haveaccess to it.ADVANTAGES OF BEING MONOPOLY:-(1)Can set up its own price standards.(2)Dominates the demands of the customers.(3)Are able to be innovative with their product development.Now moving to my topic ,I want to divide the performance andfunctioning of electricity board of India in sub topics ,to have a betterunderstanding .
The Indian Electricity Sector:
Electricity sector is the most important source for india tobecome super power in world as the whole development of
economic, social and environmental factors depend on theavailability of the energy and electricity is the most importantfactor in doing so. In fact it has become essential ingredient forimproving the quality of life and its absence is usually associatedwith poverty and poor quality of life. Though the Indian powersector has achieved substantial growth during the post-independence era, the sector has been ailing from seriousfunctional problems during the past few decades also. Toovercome the malfunctioning the state Electricity Board of Indiacome over with some of the strategies in 1993, to ensure itsloyalty among the customers , these strategies are given asunder:-
(1)
It introduced privatization, i.e., it allowed the privatesector to ‘‘set up thermal projects, hydroelectricprojects, and wind/solar energy projects of any size’’.Generators were invited to submit unsolicited proposalsto SEBs for the purpose;
(2)
It also permitted the private institutions for powerdistributions. it allowed the private sector to ‘‘supply anddistribute energy in a specified area, (even withoutownership of) a generating station’’;
(3)
Foreign ownership up to 100% was allowed;
(4)
The contract between the generator and the SEB wasfor long-term power purchase agreement (PPA) offeringa guaranteed return on equity of 16%. Foreign investorswould receive exchange rate protection up to the
benchmark return and for servicing the costs of foreigndebtHowever these policies were not adopted later on as it wasconsidered that the privatization and globalization of such dealingwill lead to whither for the monopoly of SEBs. So in the same year The National Development was the first official body to steer thereform process.
(1)
The industry should be given new mission and redressal tobe accountable to the consumers;
(2)
Foremost reform needed in the state power sector is torestore the autonomy of the state power utilities;
(3)
The State Government must not interferein any of themanagerial operation of the SEBs to enable the latter tohave necessary technical, managerial and financialautonomy;(4)In the long run, the SEBs should function as corporatebodies;
(5)
Charges for the power supply should be increased increasedso that it is not less than 50% of the average cost of generation i.e., cost per unit of electricity generated anddistribution of electricity during the year;
(6)
To make valuable efforts/measures that are necessary forthe stoppage of unauthorized use and theft of electricity.
Role Of Government To Ensure The Monopoly Of The State Electricity Board Of India
(1)
National Electricity Policy and Tariff Policy:-
the Govt. of Indiacame with much electricity policy about the electricityproduction and charging new prices from the people forthe electricity used.
These policies were to prepared for thedevelopment of power systems based on optimal utilization of resources such as coal, natural gas, nuclear substances, hydro andrenewable sources of energy.
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