ELECTRICITY INDUSTRY IN THE PUBLIC SECTOR IN INDIA

Prof. M. Sarngadharan and Shina Radhakrishnan

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ELECTRICITY INDUSTRY IN THE PUBLIC SECTOR IN INDIA Prof. M. Sarngadharan and Shina Radhakrishnan © M. Sarngadharan 2009

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ABOUT THE BOOK Electricity has become the lifeblood of the modern world, without which the world will come to a virtual standstill. Any sluggishness in the growth of the electricity industry in any part of the world can throw the region far behind other regions in industrial, economic and social growth. Thus, power has been widely recognized as one of the key factors of infrastructure, for a sustained growth of the country. Electricity is a primary input factor on which the progress of the economy of a nation depends. Full utilization of other input factors, such as manpower, land including irrigation, and capital-related resources of an economy depend upon the availability of electricity. In other words, it is not only a key input factor but it also plays a strategic role in utilizing fully the other resources towards the progress of the economy. In addition, electricity has become an essential factor in improving the social conditions and welfare of people. Thus, power is an input essential to the integrated economy of the country. Electricity, therefore, acts with a multiplier effect. Any shortfall in the availability of such a significant and strategic input factor will make the betterment of economy of a nation a distant hope. Thus, electricity is the most essential and vital ingredient for the growth of the nation in the social, industrial, commercial, and agricultural sectors. Hence a balanced development of electricity was identified as an important goal. Well recognized as ‘the industry of industries’ or the as the ‘mother industry’, electricity industry deserves priority in development and necessary support for sustainability during the planning process by the Government. In the social field, too, electricity maintains its supremacy on all fronts, from daily needs, comforts and entertainment to agriculture and kitchen operations. The role of power sector in economic development is so tremendous that economists often establish a oneto-one correspondence between energy and economic development. The considered view of many of the influential groups of experts is that the poor state of affairs in infrastructure, including Electricity, is one of the basic maladies of tardy economic growth, a multitude of problems are popping up in the field of electricity industry. This has attracted keen attention from policy formers around the globe, and rigorous efforts to tackle these problems have become the order of the day. Industrial growth has been so fast and explosive in these years that the increase in energy supply could not maintain an equal pace. The major problems faced worldwide are fast depletion of nonrenewable energy sources, increasing costs for energy, and inability to create sufficient returns for investment for growth. These problems have created a shortage of power in both quantity and quality. Electricity industry was mainly treated as a Government business worldwide, considering its importance as a vital infrastructure for the growth of the country. But growth in the sector, however impressive it was, looked insufficient to cope with the impulsive growth in industrial and other sectors. Consequently, the whole vision on the subject has been undergoing a swift change. A major shift in the electrical industry worldwide is the thinking that it is to be managed by the private sector rather than by the government. Thus, an era of reform for the power sector has opened up.

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Ability to cater to the growing demands of the society and maintaining a sustainable pattern of functioning are the main challenges before the industry. Considering its importance as the vital infrastructure for the industrial, economic and social growth of humanity, experts, engineers, economists and policy formers of various countries are working hard for identification of the possible flaws and remedies for them Specific objectives of the present study were to assess the growth or otherwise of the assets and return of one of the public sector undertakings in India engaged in production, transmission and distribution of electricity during the post liberalisation period; to examine the effectiveness in the performance in respect of the commercial sense in operation; to ascertain the methods of operation and the soundness of accounting practices followed; and to probe into the attitude of various categories of consumers on the financial charges levied for the services provided.

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SARNGADHARAN, M., Professor and Chairman, PG Board of Studies in Commerce, University of Kerala,Trivandrum 695034 Secured M.Com Degree with first class, first rank from the University of Kerala (1975) and Ph.D. Degree from the Calicut University (1986) Teaching and Research experience of 33 years at the University level .Served as sole Government Administrator of Sivagiri Sree Narayana Dharma Sanghom Trust during 1997-99, when taken over for management by the Government of KeralaServed as Head of University Department (1994-97 & 1999-2009), Member, Senate and Academic Council, and Chairman, P.G. Board of Studies - Commerce, University of KeralaServed as the Dean Faculty of Commerce, University of Kerala and Member, Senate, Cochin University of Science and Technology. Served as the Expert Member of Selection Committees constituted by the Union Public Service Commission, Staff Selection Commission (Government of India) , Kerala Public Service Commission, UGC, NAAC (UGC), various Universities and other Government agencies on several occasions Provided Research guidance to 27 candidates for securing Ph.D. Degree in Commerce and this is a record in Kerala State. Authored \ Coauthored 15 Books – 7 in Malayalam and 8 in English – and this includes a collection of articles based on 25 research theses which won international recognition. Published 78 research articles on Commerce and management and about 500 popular articles on Finance, Education and Career planning in Kerala kaumudi daily and other leading publications Serving as Honorary Chief Editor of Journal of Business Studies published from the University of Kerala since 2004. Honoured by Dr.B.R.Ambedkar Legal Institute for producing the highest number of Ph. Ds in Social Sciences from among the serving teachers in Kerala (2008); Won Guruprabha Award for the best Social Activist (1998); Won Kalakeralam Award for the best Educationalist (2005); won Sree Narayana Janakeeya Vedi award for the best educationalist in the State(2009) ; and chosen to the Dharmaprobhidini award for the best Commerce teacher in the State (2009). Visited England, Spain, Singapore, Malaysia, UAE – Dubai, Sharjah, Fujerah, Rasal Kaima, Al ain and Ajman; and Nepal for academic activities. Served as Chairman, Organizing Committee, International Conference of Tourism held at Trivandrum India during December 2004.

IDEAINDIA.COM – Electricity Industry in the Public Sector in India

Trusts. Sarngadharan 2009 6 SHINA RADHAKRISHNAN teaches Commerce at the Graduate and Post Graduate levels for the last 28 years in various Aided Colleges under the S. Kerala. Kollam. a premiere higher education centre under the University of Kerala.IDEAINDIA. IDEAINDIA. She is now a senior faculty member of Sree Narayana College. . She took her M.Com. Her major area of interest is Electricity Finance and has written several articles in research journals and news papers.COM – Electricity Industry in the Public Sector in India .COM – Electricity Industry © M.N. M Phil and Ph D from the University of Kerala. and is currently working on a project financed by the University Grants Commission of India.

AN ANALYSIS Chapter 5 ORGANISATIONAL PATTERN OF KSEB Chapter 6 FUNCTIONAL SPECIALISATION AND TECHNOLOGY Chapter 7 PERFORMANCE IN MANAGING REVENUE Chapter 8 DEDICATION AND COMMITMENT OF THE PERSONNEL Chapter 9 TARIFF AND DISTRIBUTION LOSSES Chapter 10 SUMMARY OF FINDINGSAND SUGGESIONS IDEAINDIA. Sarngadharan 2009 7 CONTENTS Chapter 1 Chapter 2 Chapter 3 ELECTRICITY BOARDS IN INDIA.ORIGIN AND GROWTH EARLER STUDIES AND METHODOLOGY FORMATION OF THE KSEB – A HISTORICAL PERSPECTIVE Chapter 4 CAPITAL STRUCTURE AND PROFITABILITY OF KSEB .COM – Electricity Industry © M.IDEAINDIA.COM – Electricity Industry in the Public Sector in India .

Sarngadharan 2009 8 LIST OF ABBREVIATIONS AE AEE CD CE CEA DCE DTP EBIT EE EHT EHV HT HV HVDC KSEB kV kW MP mu mVA mW O&M SEB UK USA Assistant Engineer Assistant Executive Engineer Compact Disc Chief Engineer Central Electricity Authority Deputy Chief Engineer Desk-top Printing Earnings before Interest and Tax Executive engineer Extra High Tension Extra High Voltage High Tension High Voltage High Voltage Direct Current Kerala State Electricity Board Kilo Watts Kilo Watts Madhya Pradesh Million Units Million Volt Ampere Mega Watts Operation and Maintenance State Electricity Board United Kingdom United States of America IDEAINDIA.COM – Electricity Industry © M.COM – Electricity Industry in the Public Sector in India .IDEAINDIA.

This was for power supply to the gold fields at Kolar. The first instance of sensing the phenomenon of electricity was the accidental observation of what was later found out to be neon glow by Framas Bauksbw in 1709 at the Royal Society in London. there was better progress in IDEAINDIA.The industrial revolution and the consequent industrial growth were virtually the growth of electricity also. The Jhulum Hydroelectric Station at Mahora with an installed capacity of 4227 kW was inaugurated in 1909 under the Government of Kashmir. Sarngadharan 2009 9 Chapter 1 ELECTRICITY BOARDS IN INDIA. etc. Almost at the same time. commissioning of the hydroelectric project Simshapur in Karnataka can be considered the starting of the Electricity Era in India. initiated the astonishing growth of Electrical Engineering. 1972). S. The Tata Hydroelectric Power Company commissioned the first large power station in India with 50. In 1912.COM – Electricity Industry © M.000 kW capacities at Khopoli near Bombay in 19142. the Calcutta Electric Supply Corporation installed a 15. the Electric current. Electricity was used only for lighting purpose up to 1920. During 1921 to 1940. 1985). the invention of electric bulbs. However. The first power station in India was at Darjeeling. One 3000 kW power station was commissioned in Madras City in 1906 by the Madras Electric Supply Corporation Ltd. Many consider the invention of electricity and electricity industry to be the major breakthrough after the discovery of fire. Thus a new phenomenon. Edward. Alessandro Volta made the first form of battery. Luigi Galvani observed moving of the legs of a dead frog when touched with a metal scalpel.COM – Electricity Industry in the Public Sector in India . This also was later found to have happened due to production of electricity by chemical process. Later. The Simshapur Power Station was set up to feed power to Bharat Gold Mines and the Mysore Maharaja’s Palace.ORIGIN AND GROWTH The history of electricity can be traced back to the eighteenth century. (Ram Mohan. Electric drives actually drove the whole industrial world. established in 1897. Andre Marie Ampere (1775 to1836) and George Simon Ohm (1787 to 1854) made notable forward leaps in this new sector of science.IDEAINDIA. was produced which paved the way for the historic and swift growth of Electricity Science. (Kenneth. A 450 kW hydroelectric project was set up in Kaveri River at Sivasamudram in 1902. Pioneers in power generation in India were the Mysore Government. The modern age saw the emergence of electricity as a household helper also. electric motors. 000 kW thermal power station at Kossipur.

The enacting of the Electricity Supply Act 1948 paved the way for establishing the State IDEAINDIA. Features of power development in this period especially during the latter half of the decade included increased participation of various State Governments in the Electric supply industry. The decade plan for power development put forward by the Government of India in 1971 envisaged an increase in peak demand of 36.COM – Electricity Industry © M. the growth of power development was largely affected by the Second World War and the abnormal post-war conditions. Punjab. The emergence of more Power Stations and Transmission lines throughout the country didn’t take much time.4 million kW. 000k W. Mysore.COM – Electricity Industry in the Public Sector in India by that time and an active role in the field was . The importance of electricity industry was duly recognized taken by the government. Certain other states like West Bengal. The government initiative When India got independence. from1951 to 1971 the total power generating capacity increased to a sevenfold value of 16.4 million kW. the aggregate installed capacity increased from about 1. At the beginning of first five-year plan. the installed capacity of the country was a meager 1940 MW. transmission and distribution of power. i. Till 1948. (Government of India.3 million kW. 000 kW to 12. Madhya Pradesh and Orissa also entered the electricity generation and distribution field during the post-war period. transmission and distribution were governed by Electricity Act 1910. During the decade 1941 to 1951. the power supply industry came under the plan economy of the five-year plans. During this period. 00. But this type of approach was not conducive to a balanced and sufficient growth in this key sector. 30. It was only after 1930 that the Provincial Governments began to think of a policy of development of power projects. the erstwhile Travancore State and Uttar Pradesh were already in the field. The Government used to give licenses for generation. There was absence of co-ordination and a meaningful orientation for fast development of the power sector. electricity generation. 1971). Sarngadharan 2009 10 power development. particularly hydroelectric projects under public ownership. Madras.. During a period of 20 years from the beginning of the first five-year plan.e. the total installed capacity of power generating plants in the country was 2.IDEAINDIA.5 million kW as against the then figure of 16. From 1951 onwards.

Now. it was glaringly inadequate to meet the growing demand in the country. The next 30 years witnessed phenomenal growth in the electricity sector. reform process and new legislations are attaining momentum. This capacity consists of 95152 mW of thermal power. 4120 mW of nuclear power and 13242 mW of non .6 kWh in 1950 to 682 kWh currently.COM – Electricity Industry © M. with a national vision. the State Electricity Boards ran the show. The State Electricity Boards presented a commendable picture in the growing independent India. the installed capacity has reached 149392 mW as on 31/05/2009. The whole picture of enactments in the sector will be dealt with in detail. etc. matters regarding grid discipline. and now the country is passing through major changes in the electricity sector.317 MW. The establishment of the Central Electricity Authority in August 1975 was the next important landmark.IDEAINDIA. The establishment of the national and regional load dispatching centres to exercise roundthe-clock real-time control over the inter-state dealings was an extension of the operation of the Central Electricity Authority. National Electricity Grids came into being and the Central Electricity Authority undertook the role of the controlling agency monitoring inter-state dealings in the power sector. 36878 mW of hydropower. The energy deficiency has reached approximately eleven per cent and peaking shortages eighteen per cent by 2009. Sarngadharan 2009 11 Electricity Boards. But this is much lower than the consumption standards prevailing in developed economies. The objective was central monitoring of the electricity sector. later in this chapter. the installed capacity of the country was 18.COM – Electricity Industry in the Public Sector in India . Then. which brought this prime industry under the public sector.conventional power. but now a new era seems to be opened in the electricity sector. aiming at integrated development of the electricity system of the country. This has caused rethinking among the policy formers. Of late. Domestic industrial and irrigation consumers utilize over eighty five per cent of India’s electrical energy.1 presents a comparison of electricity data of major world countries. What is of more serious concern now is that the growth rate achieved in the past through the public sector seems to be no longer sustainable in the future mainly because of the scarcity of resources in the public sector. It was a major keystone in the history of Electricity in India. Till now. There were major steps in the legal framework for the power sector. importexport. quality of power. IDEAINDIA. This central agency has been given statutory powers to exercise effective control over the State Electricity Boards Though the growth has been commendable. Table 1. The per capita consumption has grown from 15.

2009). Sarngadharan 2009 12 Electricity consumption per capita of Canada is 16741. However. much shortfall in achieving this objective has to be feared.IDEAINDIA. Very serious efforts are seen to have been made for very IDEAINDIA. Most of the countries have four-figure values. The Act identifies the main reason for the shortfall in the development in the power sector in the country to be the inefficiencies of the public sector that was mainly managing the power sector in the country. A special development programme called ‘Accelerated Power Development and Reforms Programme’ (APDRP) has been started by the Union Government for development sufficient to meet the projected growth in demand. in the next six years. has stated that in the light of the current progress. However. hoping that at least 10% of the addition shall be from the private operators. the Government of India proposed to add 40245MW of power but it was reduced to 28000MW because of paucity of funds. The All India Power Engineers’ Federation. The efficiency of operation of the utilities is given paramount importance in the new policy. 2003).22. The Central Electricity Authority has projected that by 2012 the installed capacity should be 2.000 MW. The Indian Electricity Act 2003 will be dealt with in detail later in this chapter.The Government of India has already opened the doors of the power sector to private companies. Future projections and plans In the Ninth five-year plan. In an all Chief Ministers meeting in 2001 it was decided that The Union would allow each state to choose its own model of reforms and that the Union would not insist on unbundling / privatization of State Electricity Boards.rule itself. 40. our experience in the Ninth plan is that the private sector has contributed only a meagre1%.COM – Electricity Industry in the Public Sector in India . Electricity legislation in India Efforts for development of Electricity and for Government control over the field had been started even before the dawn of the 19th century. (wikipedia.org. Experts are not optimistic about achieving this target.04 and that of US is 12796. The Act encourages the private sector to actively engage in generation. 40. K C. transmission and distribution of electrical energy in the country.000 MW.COM – Electricity Industry © M. we have to add 1. During the British . It means that. considerable work had been done in this regard. the enactment of The Indian Electricity Act 2003 has made all the grounds for privatisation of the power sector in India. (Naikwadi.

00 5286.000 84.35 5642.43 5978.000 88.000 88.360.69 5155.700.980.000 74.000 4.000 58.405.200.859.747.689.000 128.000 10.43 1762.000 16.000 219.COM – Electricity Industry in the Public Sector in India .900. The process of evolution of law regulating the Electric Supply Industry in the country Table 1.000 221.000.481.000 108.200.44 16816.02 10905.000 38.000 459.371.700.233.000 488.430.000 60.155.990.000 120.000.61 Source:http://en.270.720.100.060.000 157.500.000 348.000 117.88 5844.000 1.500.30 7708.53 424.000 307.000 451.000 545.000 2.033.000 540.000 69.000 78.816.781.530.093.000 146.39 24653.11 1959.000.400.62 6879.000 107.48 1712.041.000.54 1141.000 14.39 9653.384 20.73 7463.894.000 47.000 241.000 32.000 129.62 3913.820.76 5089.029.844.000 24.04 442.100.000 73.000 Per capita consumption in kWh 12796.000 59.000 222.496.000 38.000 2.817.000 Population 298.000 113.1 Comparisons of Electricity Data in World Countries Country United States China European Union Russia Japan Germany Canada India France South Korea Brazil United Kingdom Italy Spain South Africa Taiwan Australia Mexico Ukraine Saudi Arabia Iran Sweden Turkey Poland Thailand Norway Netherlands Indonesia Argentina Finland Egypt Belgium Malaysia Kazakhstan Venezuela Pakistan Annual consumption in mWh 3.213.500.000 25.000 143.103.900.000 368.500.085.26 3105.900.000 974.wikipedia.064.400.000 134.315.193.29 14832.000 64.48 2742.490.25 7965.000.000 183.432.000 108.000.IDEAINDIA.249.44 484.000 136.573.268.000 181.000 82.200.75 6138.668.800.000 76.79 7605.84 1832.825.620.300.202.000.000 47.78 2296.299.000 368.200.56 1976.000 46.200.000 73.01 16741.000 1.68 6638.000 22.000 985.org/wiki/List_of_countries_by_electricity_consumption IDEAINDIA. Sarngadharan 2009 13 comprehensive enactments in this sector.000 186.46 3124.COM – Electricity Industry © M.000 67.749.600.000 26.387.515.419.89 6597.22 2172.000 243.000 9.347.000 43.935.000 82.000 5.

The Calcutta Electric Lighting Act became necessary when a large scheme for supply of electrical energy was initiated in India for the first time through a public company. Thus the Electricity Act 1910 came into being. when the Electricity Act was passed. It was also intended to watch the development and progress in the electricity supply industry before a comprehensive measure dealing with various aspects of general safety precautions and protection of consumers could be initiated. Subsequently. several vital questions were left unattended. This Act created the basic framework for electricity industry in India. Sarngadharan 2009 14 is of much significance in this context. which followed. These enactments were of a purely local nature. They were the forerunners of the later highly developed and comprehensive legislation. (Government of India. A detailed discussion on legislation made in the Electricity Sector is attempted in the following paragraphs.IDEAINDIA. The Act was accordingly applied in a modified form in Dacca and Darjeeling. The practical working and administration of the Act disclosed numerous defects. Though the legal measure was designed for the city of Calcutta. It was largely instrumental in regulating the procedure for the grant of licences to electricity undertakings. It soon became evident that the 1887 Act had to be revised thoroughly. 2003) The result of the above situation was The Electricity Act 1903. The Act of 1887 was intended to be a temporary expedient aimed at protecting the public by means of rules dealing with the use of electrical energy. which became prominent with the progress in the electricity supply industry.COM – Electricity Industry in the Public Sector in India . Though the 1903 Act was elaborate. the Calcutta Electric Lighting Act and the Howrah Bridge Electrical Lighting Act were passed. (Government of India. The question of bulk supply to authorized distributors was not covered by the Act and it was found that bulk licensees could not be dealt with under the Act. prescribing their obligations in the execution of works and supply of electrical energy to the ultimate consumers and also regulating the relationship between the licensees and the IDEAINDIA. the Government had the powers to extend the legislation to other municipalities.COM – Electricity Industry © M. 1947). These earlier legislative measures on electricity supply served the then requirements satisfactorily and paved the way for the more comprehensive legislations. (Government of India. and a committee was appointed in 1907 to revise the Act to overcome the difficulties and to provide a more comprehensive Act. 2003). The earliest legislation attempting to regulate the use of electrical energy on an all-India basis was in 1887.

In 1938. supply. 2003). was the result of the changes effected by the parliamentary amendment no. The necessary changes to meet the needs were subsequently made.IDEAINDIA. transmission of electricity and its use by non. The Electricity Amendment Act of 1959. licence was necessary but it contained provisions for the supply of electricity. For production of electricity. But it could not make much progress because of the outbreak of the Second World War. the purpose of rationalisation and development. The Act of 1910 was modified by various amendments. the Act of 1910 showed its gross inadequacy. envisage reorganization of the electricity supply industry as a whole nor its rationalisation. One of the resolutions passed by the Sub Committee envisaged the constitution of Provincial IDEAINDIA. The 1910 Act did not. however. it didn’t purport to be a code. The need for fresh legislation on the subject became increasingly apparent in course of time. a committee was appointed by the National Congress Party to study and make a report on this aspect. However. In fact.COM – Electricity Industry in the Public Sector in India . The Act was not a comprehensive one. alterations. additions. with the passage of time. had the objects of enlarging the scope of facilities available to consumers of electricity. consumption and use of energy in certain circumstances and providing for the inspection of electric works and installations of the central Government In spite of the difficulties of the war period. extending the same facilities to consumers served by a Government Electricity Department as are enjoyed by consumers of private licensees and State Electricity Boards. (Government of India. This Act was enforced with effect from 1/1/1911. exercising stricter control over licensees. About that time. considerable time was devoted for the preparation of an Electricity Supply Bill intended to place India in line with the pattern of development in other countries. and was silent on any procedures. omissions and adaptations of its provisions through both State and Central Acts. as it now stands.32 of 1959. repeals. was aligned to the 1910 Act. Even the requirements of a growing economy were not kept in view. the Power and Fuel Sub Committee of the National Planning Committee was set up under the chairmanship of Pandit Jawaharlal Nehru. 1986). planning and development of the industry on a scientific basis have become an imperative necessity. Sarngadharan 2009 15 consumers. which was gradually overtaking.licensees. (Government of India.COM – Electricity Industry © M. as now understood in the context of rapidly expanding industries. acquiring powers to regulate the distribution. The Indian Electricity Act 1910. To deal with the growing demands for power and to fit into the changing pattern of industrial revolution.

In the preparation of this Act.COM – Electricity Industry in the Public Sector in India . it became necessary that the appropriate Governments should be vested with the necessary legislative powers to link together under one control. experience in the UK in the British Electricity (Supply) Act 1919 and the British Act of 1926 was taken into consideration. or in commercially owned. After independence. electrical development in adjacent areas by establishing grid systems. however. 2003). Sarngadharan 2009 16 Electricity Boards. The formation of semi-autonomous bodies for the administration of the grid systems was IDEAINDIA. Therefore. It was. electrical undertakings. the Policy Committee on Electricity and Public Works also recommended that steps should be taken to eradicate any factor that retarded the healthy growth of electrical development on regional lines. In the objects and reasons for the bill. It was not possible to legislate for the above purpose within the framework of the Indian Electricity Act 1910. In these circumstances. States. The British Government was then approached to make available the technical assistance from experts associated with the operation with the UK Central Electricity Boards. It was then felt that the British legislation and precedence and the development of its Electricity Supply Industry would afford a good basis for reorganization of the electricity supply industry in India and for new legislation dealing with rationalisation of generation and supply on regional basis. particularly in the UK. a critical examination of the trends of legislation.IDEAINDIA. and the necessity for the constitution of semi autonomous-bodies like Electricity Boards to administer the grid system. (Government of India. recognized that because of the size of India and the probable difficulties of administration. it was stated that the coordinated development of electricity in India on a regional basis was a matter of increasingly urgent importance in the post-war situation. a task of adaptation was necessary to suit the Indian condition. and Local Authorities . Regional coordination and a control over the existing licensees were aimed at. and the USA. The British experts helped the preparation of the draft of the new bill. There were two considerations. which indicated the necessity for central legislations.COM – Electricity Industry © M. it would not be possible to model the legislation exactly like the very centralized system of the UK. whether in the Provinces. They were the need for uniformity in the organisation and development of the grid system.owned. The result was the enactment of The Electricity (Supply Act) 1948. The grid system was adopted and state mechanisms for administration of the grid system were envisaged. The new enactment was a leap forward in the rationalisation of generation and supply of electricity. In February 1945. was undertaken.

the Local Advisory Committees and the Rating Committee The formation of State Electricity Boards was the main development according to this Act. The Kerala State Electricity Board has achieved unique success in rural electrification. These are the Central Electricity Authority. The functions and duties of the Central Electricity Authority have been defined in section 3.IDEAINDIA. were other functions envisaged.COM – Electricity Industry in the Public Sector in India . and in particular to develop a sound adequate and uniform national power policy (Formulate short-term and perspective plans for power development and co-ordinate the activities of planning a and assist timely completion of schemes sanctioned under chapter V of the Act. Under section 16 of the Act. The functions of the council include advising the Board on major questions of policies and major schemes. transmission and distribution of electricity. promoting research in generation. the State Government is required to constitute a State Electricity Consultative Council. Electrification was practically limited in cities and the new Act acknowledged the necessity of the state shouldering the responsibility of rapidly expanding electricity throughout the country. reviewing the Board’s progress periodically and considering such other matters as the State Government may prescribe by rules. four more authorities were envisaged in the Act.COM – Electricity Industry © M. Section 17 of the Act empowers the State Government to constitute local authority committees for certain IDEAINDIA. The main task of the State Electricity Boards was to prepare schemes for the establishment of their own generating stations and main transmission lines. Sarngadharan 2009 17 thought to be suitable. Making arrangements for advancing the skill of persons in the generation and distribution of electricity. It exercises such functions and performs such duties. D. and in such a manner as the Central Government may prescribe or direct. transmission and distribution of electricity and advising the Central Government on any matter of generation. The declared objective of the act of expanding electricity into rural areas also was being rapidly achieved by the newly formed State Electricity Boards in their earlier years. (Shina. Carrying out or make arrangements for any investigation for the purpose of generating or transmitting electricity. 2004). In addition to the State Electricity Boards. Section 5 of the Act provided for the formation of State Electricity Boards. and generally to coordinate generation and transmission conducive to efficiency and economy of the boards. The Central Electricity Authority was also formed under the Electricity (Supply) Act 1948. the State Electricity Consultative Council.

In pursuance of the liberalization policy brought about in the country from 1991 onwards.. the Board or the Government. If the State Electricity Board is satisfied that a licensee has failed to comply with the provisions of the sixth schedule of the Act. etc. the first state to come up with a Reform Act. The Act has been a subject of discussion for the last few years and has been revised several times. generation and distribution. Andhra Pradesh. C R. Rajasthan and Uttar Pradesh followed suit. The first attempt to regulate the monopolistic power utilities by defining the basis for tariff formulation was made in this Act. It is interesting to note that the Act was finally passed by the Parliament without anybody insisting on voting. Under the Act. 2003). which mainly aims at bringing out commercialization and free competition in the electricity industry. Thus. Karnataka. The rating committee should hear the licensee and submit a report to the Board / Government making recommendations about the charges.COM – Electricity Industry © M.P also enacted similar Acts. Sarngadharan 2009 18 areas. has already done the unbundling. IDEAINDIA. as the case may be. the workers in the sector and certain social organisations have expressed their anxieties. The Powers and duties of State Electricity Boards and generating companies. This was a detailed cost plus methodology where the rate of return on the capital invested was regulated and a cap was imposed on the clear profit of the licensees. were defined in this Act. has invoked mixed response from different sectors. the existing laws including the Indian Electricity Act 1910. While the industrial world welcomed the new Act. many states have started reform process in electricity sector. the Board is required to consult the committee on certain categories of business placed before it. Orissa. (Reddy. which regulated the electricity sector for nearly a century. Delhi and M. Hariana.COM – Electricity Industry in the Public Sector in India . Thus a new Act to meet the present pressing needs became necessary The Indian Electricity Act 2003 – the current Act The Electricity Act 2003 enacted by Parliament of India came into being on 10th June 2003. for transmission. These reforms mainly involved unbundling of the State Electricity Boards into separate entities.IDEAINDIA. The State Electricity Boards were expected to supplement efforts of private licensees. can constitute a rating committee to examine the licensees’ charges for the supply of electricity and to determine correct charges. were repealed in a single stroke. works and trading procedure of these entities.The new Act.

The major regulatory power will go from the Government to regulatory authorities. certain other restrictions in the Act are quoted by some legal experts to IDEAINDIA. the law makes privatisation of the power sector as easy as that. The Act provides for dissolution of the State Electricity Boards. The Government aims at growth of the sector through liberalization. transmission. Rationlaisation of tariff avoiding cross subsidies would be a major aim. Any property.COM – Electricity Industry © M. Central Electricity Authority. the Government has been given certain powers in policy decisions. and it further states that any property. The Act again claims to have ‘progressive features and endeavours to strike the right balance given the current realities of the power sector in India. However. The most important feature of the Act is opening this key sector to free competition and commercial operation. ensuring transparent policies…’ It provides for the creation of regulatory authorities such as Regulatory Commissions. De-licensing of generation and provision to give licence to anybody avoiding monopolisation in the areas of transmission and distribution are also envisaged. An effective date for this has to be stipulated by the State Government. Thus.’ The Act has been finalized after extensive consultations with all the stakeholders. Sarngadharan 2009 19 The Act is claimed to be made ‘to consolidate the laws relating to generation. and Appellate Tribunals. distribution. A transfer scheme is to be prepared by the State Government in agreement with the State Electricity Board. For transfer to private operators. Here the provision that transfer can be to ‘a Government company’ suggests that if the Government desires the present state electricity board can be retained as a company. The motive of this Act can very well be understood as eventual privatisation of the power sector in conformity with the new liberalization policy.IDEAINDIA. distancing its functioning from government. However. protecting the interest of consumers and supply of electricity to all areas. rationalisation of electricity tariff. rights and liabilities of the present State Electricity Boards so vested with the respective State Government shall be re-vested in a Government company or in a company or companies in accordance with the transfer scheme. to meet the growing demand for electricity. Ample facilities have been given to the private operators also to deal with offences and defaults. the stipulation is that ‘fair value has to be paid to the Government by the transferee’. The present State Electricity Boards will cease to exist and new public or private companies will take over.COM – Electricity Industry in the Public Sector in India . trading and use of electricity and generally for taking measures therein. rights and liabilities of the present State Electricity Boards shall be vested with the respective State Governments. if the State Government desires so.

Consistent with the requirements of drinking water. A very important provision in the new Act is delicencing of electricity generation. which means that the owner of a particular line who is incidentally a licensee shall allow others also to use the line on payment of the specified wheeling charge which is determined by the appropriate commission. coordinated and economical inter-state transmission system with non discriminatory open access. A central transmission utility under the Government will have to be set up through a notification in order to provide an efficient. Apart from the Central and State transmission utilities. irrigation. the employee’s claim including pension claims has been given first charge. This can be viewed as a provision to safeguard some of the interests of the employees. Open access to the lines is made allowable. Likewise. This makes electric lines analogous to public roads. therefore. The only stipulation is regarding technical requirements for connectivity with the grid. If sale to a private agency happens. This provision practically puts an end to the monopoly enjoyed by the state utilities so far. The Act also provides for permitting captive generation (Generation by industries for their self use) and dedicated transmission lines. the State Governments can set up State transmission utilities. This provision is included to ensure that the scheme would not affect the ultimate development of the river concerned. The Government companies have been given exemption from obtaining license.COM – Electricity Industry in the Public Sector in India . To transmit electricity. that this part of the Act requires further explanation or clarification. IDEAINDIA. Anybody can start a generating station without obtaining a licence. floods control. Actually. that provision is the main constraint which prevents State Governments from keeping the existing State Electricity Boards as such in company form. which imposes some restriction of free commercial operation purpose of which is not clear. if the applicant complies with all the requirements. For hydroelectric generating stations. and wheeling charge can be equated to toll. any intending person shall obtain a licence to do so from the appropriate commission..COM – Electricity Industry © M. A provision preventing transmission licensees from electricity trading is seen included. there can be any number of transmission licensees overlapping the areas of operation of the utilities. Sarngadharan 2009 20 say that it is not possible. norms regarding dam design and safety will also be taken care of. No person applying for a licence shall be denied license on the ground that there already exists a licence in that area.IDEAINDIA. Further open access by anybody who requires it to the existing transmission facility is also guaranteed in the Act subject to availability. etc. navigation. The present position is. concurrence from the specified authority would be required.

the necessity for a central agency for real-time coordination among them has been recognized in the Act. The Government shall also establish regional load dispatch centres for various regions. There is provision for mechanisms for redressal of grievances of consumers and appointment of ombudsman. Sarngadharan 2009 21 Since there may be a number of operators in the power grid. the State Governments shall establish State load dispatch centre to look after the area within the State. The Central load dispatch centre functioning at the national level will look into optimum scheduling and dispatching of electricity among the regional load dispatch centre. A consumer or a class of consumers can purchase power from a licensee other than those who operate in that particular area. any intending person shall obtain a licence to do so from the appropriate commission. for which wheeling charges determined by the appropriate commission have to be paid. Likewise. if the applicant complies with all the formalities and requirements. However. The national load dispatch centre shall be owned by a Government company or any Governmentowned mechanisms notified by the Government of India. A very strong positive step in the Act is the provision that it is the licensee’s duty to give any applicant within his licence area electricity within 30 days of application. The Act provides for functioning of Central and Regional Load dispatch centre for the purpose.COM – Electricity Industry in the Public Sector in India . The Act even imposes a heavy fine of Rs.IDEAINDIA. and creditworthiness of the applicants for licences. For distribution also. a provision was IDEAINDIA.COM – Electricity Industry © M. Open access to the distribution lines shall be permitted. The load dispatch centres have been given ample power to issue directions to the constituent load dispatch centres. by paying wheeling charge for using the lines of the licensee in that area. The open access provision is a strong step towards avoiding duplication of facilities by different licensees. The load dispatch centres can collect such fees and charges from the generating companies and licensees under their respective areas. the generation companies and transmission companies for the smooth operation of the grid and maintaining grid discipline. Thus. No person applying for a licence shall be denied licence on the ground that there already exists a licence in that area.1000 per day for failure to do so. there can be any number of distribution licensees in one area operating on free commercial competition with the only restriction of the appropriate commission with regard to tariff. There is provision to examine other requirements such as capital adequacy. unlike the present system in the case of the different mobile phone companies. The national as well as regional load dispatch centre shall not engage in trading of electricity.

The committee submitted its report on 19/12/2002. There are many important provisions of protection to consumers. Redressal Forum for handling grievances of consumers etc are other important provisions. No sum due from consumers shall be recovered after a period of 2 years unless the same was shown recoverable continuously. The important milestones in the enactment of The Indian Electricity Act 2003 mentioned below. Licensees are required to meet standards of performance specified by the regulatory commission. Sarngadharan 2009 22 newly added to the Act after its first formulation. Failure to meet standards makes them liable to pay compensation to affected persons. Regulatory Commission to specify Electricity Supply Code to be followed by licensees. There is provision for District level committee to coordinate and review extension and electrification in each district and to review quality of power supply. payment of interest on security deposit.IDEAINDIA. The Act aims at complete elimination of all cross subsidies ‘through progressive reduction’. which absolves the licensee from the above duty on certain grounds. The Government considered the recommendations of the Standing Committee and accepted most of them. rules and regulations. When existing utilities are compelled to share their facilities to new operators for wheeling charges.COM – Electricity Industry in the Public Sector in India . The Standing Committee examined various provisions of the bill in consultation with the stakeholders and made some valuable suggestions for improvement. Some of the recommendations are meant for consideration at the stage of formulating the policies. as the existing utilities balance the shortfall of revenue in certain sectors of consumers because of subsidies through cross subsidies in tariff for other categories of consumers. All these charges are to be decided by the appropriate regulatory commission. To offset the loss. Consumers should be given connection within one month of application and six months if establishment of new substation is involved. Electricity bill introduced in Lok Sabha on 30/08/2001 Referred to the Parliamentary Standing Committee on Energy for examination and report on 31/08/2001 IDEAINDIA. The Electricity Bill was introduced in the Lok Sabha in August 2001 and it was subsequently referred to the Standing Committee on Energy for examination and report.COM – Electricity Industry © M. a provision is given in the Act for payment of a surcharge also in addition to the wheeling charge. they may lose a section of consumers who were providing them additional revenue. Licensee should furnish to the commission periodical information on standards of performance. Penalty in the event of failure to give connection.

COM – Electricity Industry © M. Its ambitious plans are to add another 1570 MW hydro capacity during the 10 th plan. have been formed by the Union Government. The National Thermal Power Corporation Ltd is the backbone of the country’s thermal power. 2004). The National Hydroelectric Power Corporation Ltd is an organization for harnessing the renewable hydro resources of the country.COM – Electricity Industry in the Public Sector in India . The National Thermal Power Corporation Ltd has got thermal stations all over India. North Eastern Electric Power Corporation Ltd. Sarngadharan 2009 23 Standing Committee submitted its report on 19/12/2002 Lok Sabha passed the bill along with amendments moved by the Government. Rural Electrification Corporation.IDEAINDIA.O. The National Thermal Power Corporation has proved to be an efficient public sector organisation completing the projects undertaken in record time. Central Board of Irrigation and Power and Central Power Research Institute (Shina. It aims to be a 30000 MW plus giant by the year 2007. on 09/04/2003 The RajyaSabha passed the bill on 05/05/2003 President gave his assent on 26/05/2003 The Indian Electricity Act 2003 was notified in the Gazette of India on 02/06/2003 Government of India vide Notification No S. Power Finance Corporation Ltd. The comparatively lower operating cost and thereby cheaper energy make hydro power IDEAINDIA. The important ones among them are National Thermal Power Corporation Ltd. to act as apex agencies in electricity industry. National Hydroelectric Power Corporation Ltd. Many agencies. It has currently a hydro generating capacity of 2193 MW. the Union Government has taken many steps to ensure comprehensive development of the power sector. The Kayamkulam Super Thermal Power Station is the one situated in our State and has served an important role in solving the power deficiency in the State.No669 (E) Dated 10th June 2003 brought into force the provisions of this Act Central Organizations of Electricity Considering the importance of electricity as the major infrastructure for the development of the country. D. Power Grid Corporation of India Ltd. based on the recommendations of the Standing Committee. Water and Power Consultancy Ltd. It has a generating capacity of 19294 MW.

and some new works to cover almost the whole of the State. the Power Grid Corporation of India Ltd operates more than 39000 circuit kilometers of HV and EHV transmission network and 65 substations. IDEAINDIA. it can be considered as constituting the blood vessels of the country. The financing is through both grants and soft loans. Set up in 1969. Normally. transmission and distribution. Most of the developments in the rural sectors of the country could be achieved through the Rural Electrification Corporation. The impact of hydroelectric stations in the ecological and environmental picture of the location calls for a comprehensive outlook in the matter of hydroelectric projects and that explains the relevance of a central agency for Hydel projects. Dalit bastis. the Rural Electrification Corporation has the unique role of electrification of villages. Because it maintains better credit rating. it has taken up a number of projects including the 400kv Sub station at Madakkathara. It also offers soft loans and grants to modernization works by the State Electricity Boards. In Kerala also. One of the latest ambitious plans of the Power Grid Corporation is a power super highway as the power backbone for the State. The Power Finance Corporation Ltd is the prime government financial institution for the development and modernization of the power sector in the country. the 400kv inter-state line to Kerala. It finances projects sanctioned by it and maintains very good monitoring of its utilization. Unlike other agencies. Therefore.COM – Electricity Industry © M. With the steep increase of the global oil prices. pump sets and rural industries. It finances not only the governmental agencies but also any agency involved in electricity generation. Established in 1989. for financing State Electricity Boards it insists guarantee for repayment from the State Governments. it can mobilise funds easier and give funds to the power utilities on safer terms so as not to be affected by the instability of the utilities. It is currently diversifying into telecom business by installing long distance Optic Fiber Network. The organization levies from the respective Electricity Boards wheeling charge for the energy transmitted. it finances only Rural Electrification projects. the whole world is looking forward to full utilization of the hydroelectric potential and thus the role of the National Hydroelectric Power Corporation Ltd in the power scenario of the country is important. The Kerala State Electricity Board actually maintains separate offices for monitoring of Rural Electrification Corporation-aided projects.COM – Electricity Industry in the Public Sector in India . It has regional offices in almost all states. It provides the national network of power transmission.IDEAINDIA. Sarngadharan 2009 24 more attractive and thus make the National Hydroelectric Power Corporation Ltd more important.

The poor financial health of State Electricity Boards and the inadequate investment in power are largely responsible for this inability. Through coordination of the works nationwide. It sponsors fully or partially the research projects approved by it.COM – Electricity Industry in the Public Sector in India . It functions as the nodal agency for providing the necessary state-of-the art know-how to the operating agencies in water and power. The Central Power Research Institute has many notable contributions in the development of modern power system in the country. It takes up many applied research projects either for other organizations or for their own. Situated in Bangalore. it avoids duplication of works and provides a forum for interaction and thereby makes the nation wide work inter-supplementary. The transmission network witnessed a growth from 52.IDEAINDIA. With its headquarters at New Delhi it not only disseminates up-to-date knowledge on the outcome of research activities worldwide. Development of controls for H V D C System. specializing in the implementation of hydroelectric projects in association with the CEA. the Central Power Research Institute provides testing and research facilities for the electricity industry in India and even in Asia.COM – Electricity Industry © M. It is considered to be the premier organization of the country in power research. The reforms process in India. India has also started the reforms process in the power sector. The Water and Power Consultancy Ltd is a consultancy organization under the ministry of water resources. but also supports research activities within the country. which is usually described as a part of a global process. The problem areas in the power sector in India have been IDEAINDIA. It operates 625 MW generating capacity and has 4 ongoing hydroelectric projects in the North East. It has been widely identified that the State Electricity Boards are no longer capable of meeting the growing energy demand of the country. Sarngadharan 2009 25 The North Eastern Electric Power Corporation Ltd concentrates its operation in the northeastern region. The northeastern region is comparatively weak in the power sector and this led to the setting up of the North Eastern Electric Power Corporation Ltd. The Central Board of Irrigation and Power provides assistance and co-ordination to the power research activities in the country. development of modern earthing methods.034 circuit kilometers of 220kv/400kv lines to 135284 circuit kilometers. and newer tower designs are among the recent.

These resulted in sharp deterioration of the financial health of the sector in 1990s. Sarngadharan 2009 26 identified by many experts and authorities. transparency in the grant of subsidy. reduction in transmission and distribution losses. deterioration of quality of power. lack of professionalism and accountability.000 units in the U S A (Suresh Prabhu. 000 crore. to arrest declining trend in village electrification. Suresh Prabhu. He also stressed that India’s low per capita consumption was to the tune of 338 units against the international figures of 800 units in China and 13. rural electrification. deterioration in quality of life. as poor prospects of capacity addition (increasing demand supply gap). The annual loss of State Electricity Boards came up from 4. high transmission and distribution losses.33. difficult financial closure of new power projects due to payment uncertainty. the total losses had reached the un-sustainable level of Rs. high cost of power. if immediate corrective measures were not taken. and low quality and reliability of supply are the major issues. They were rationalization of tariff structure.COM – Electricity Industry in the Public Sector in India . 2004).COM – Electricity Industry © M. cashstrapped State Electricity Boards due to negative return on investments. Low plant utilization.IDEAINDIA. reforms in the sector have to be undertaken immediately to mobilize resources. high outstanding dues. Thus. He further listed out the rising unemployment and summary of possible consequences of the above as more blackouts. low productivity of manpower. The Union Government has started signing MOUs with the state governments. slow economic growth. to bring in more focused approach to improvement and to rationalise tariff structure In what can be considered as policy statement of the Union Ministry the article by the Union Power Minister finally declared the thrust areas for reforms. The Electricity Bill 2003 has already IDEAINDIA. low collection efficiency. He predicted the possible fallouts of our inaction. and 26. Financing through Accelerated Power Development Programme and Power Finance Corporation has been linked with these MOUs to encourage or press the State Governments towards restructuring. plant availability and plant load factor.000 crore in 2000-01. the former Union Minister for Power. and operational autonomy for State Electricity Boards. to match the decline in plan outlay. collection efficiency and privatisation of distribution. viewed that the financial state of State Electricity Boards would indicate an immediate reaching of a stage of non-return. By March 2003.600 crore in1992-93. The Government of India has actually gone a great way in the restructuring process. dues of central public sector units that might lead to their sickness.

policy for encouraging power projects in the private sector. the tariff for the industry has also been heavily subsidized by the government for socio-economic reasons. Special Purpose Vehicle with environment. Sarngadharan 2009 27 been enacted in the Parliament. Electricity Boards have been set up to build transmission and distribution infrastructure. a good amount of political exploitation IDEAINDIA. urgently required for bridging the demand-supply gap. and collect the charges for it. A general belief came up that the State boards are non-viable and the banks considered them as nonbankable. policy for bilateral negotiations with developed countries for setting up of power generation projects.IDEAINDIA. Clean development mechanism. is an absolute pre-requisite for restoring the financial viability of the sector and thereby for attracting large investments. While price reform is a pre-requisite for providing required security to attract massive private investment. action plan for short term measures to ease power situation. financial closure of Independent Power Producers. captive power policy. Moreover. Overcoming uneconomic pricing of retail power sales by State Electricity Boards. About 78 percent of the power capacity is in the State sector. sector reforms would be the pre-requisite for price reforms. produce electricity. reduction of cost of power and benchmarking of cost of generation projects (National Power Training Institute. both public and private. policy for encouraging privatization and restructuring of distribution are among other initiatives. especially to domestic and agricultural consumers. 2000).COM – Electricity Industry © M. The experience in other developing countries indicates that entrenched price subsidies can be eliminated only as a part of broader sector reforms. Other steps announced by the government are Energy Conservation Bills. It has been well identified that any upward adjustment in pricing has to be balanced by improvement in quality of supply and standard of consumer services. feasibility study for hydro potential. and was owned and managed by State Electricity Boards. special packages for reforms of state including those from agencies like World Bank and Asian Development Bank. Like any other infrastructure.COM – Electricity Industry in the Public Sector in India . implementation of Accelerated Power Development Programme.00. transmission and distribution including resource plan.000 MW in generation. action plan for 1. State Electricity Boards The State Electricity Boards constituted under the Electricity Supply Act 1948 continued to be the mainstay of the country’s electricity industry. sell it to consumers.

COM – Electricity Industry in the Public Sector in India . The observation made in one of the research publication assumes significance at this juncture. corruption and ineptitude. they could not follow the explosive pace of the industrial growth worldwide and in India.IDEAINDIA. However.COM – Electricity Industry © M. This has made both the policy formers and the public at large to think of bringing private players also into the electricity sector. the number of workers being the highest in India’(Southern Economist. it is true that with the inherent weaknesses of the Public Sector Undertakings. commensurate with this. which has led to activities detrimental to the State and Central economies. IDEAINDIA. In fact. All of them are over-staffed. mismanagement. 2004). the role of the State Electricity Boards is not yet over in the electrical scenario of the country. It observes: ‘Our State Electricity Boards suffered from inefficiency. the tariff has not been increased. Sarngadharan 2009 28 can always be observed. Though many of the states have started re-organization process. While the cost of electrical energy has shown an increasing trend. they have given leadership in the phenomenal growth of electricity in India. Non-remunerative tariff structure is one of the basic reasons for the poor financial state of the State Electricity Boards.

industrial. and is of particular importance to developing the rural sector. Any sluggishness in the growth of the electricity industry in any part of the world can throw the region far behind other regions in industrial. power has been widely recognized as one of the key factors of infrastructure. It is a vital input to industry and agriculture. Full utilization of other input factors. and capital-related resources of an economy depend upon the availability of electricity. too. and agricultural sectors. Electricity (Power) is a primary input factor on which the progress of the economy of a nation depends. Any shortfall in the availability of such a significant and strategic input factor will make the betterment of economy of a nation a distant hope (Reddy. such as manpower. (National Power Training Institute. commercial. Hence a balanced development of electricity was identified as an important goal. will depend upon the rate of growth of power generation capacity. In the social field.The draft 9th Five-Year Plan estimates electricity as the most versatile form of energy providing an infrastructure for economic development. In addition. from daily needs.R.COM – Electricity Industry © M. therefore. electricity industry deserves priority in development and necessary support for sustainability during the planning process by the Government. The draft thus concludes that the future development of the country. Thus. Electricity.COM – Electricity Industry in the Public Sector in India . power is an input essential to the integrated economy of the country. for a sustained growth of the country. electricity is the most essential and vital ingredient for the growth of the nation in the social. land including irrigation. economic and social growth. electricity has become an essential factor in improving the social conditions and welfare of people. Well recognized as ‘the industry of industries’ or the as the ‘mother industry’. without which the world will come to a virtual standstill. therefore. C. it is not only a key input factor but it also plays a strategic role in utilizing fully the other resources towards the progress of the economy. 2003) Thus. In other words. Sarngadharan 2009 29 Chapter 2 EARLER STUDIES AND METHODOLOGY Electricity has become the lifeblood of the modern world.IDEAINDIA. 2000). acts with a multiplier effect. electricity maintains its supremacy on all fronts. Thus. comforts and entertainment to agriculture and IDEAINDIA.

The first effort in this direction was a private endeavour. But growth in the sector. Pillai. Consequently. the whole vision on the subject has been undergoing a swift change. Industrial growth has been so fast and explosive in these years that the increase in energy supply could not maintain an equal pace. electricity also was first brought to the state by a British company. Sarngadharan 2009 30 kitchen operations. increasing costs for energy. Recently. After a spell of 17 years. the Kannan Devan Hill Produce Company. T. The major problems faced worldwide are fast depletion of non-renewable energy sources. In Kerala too. This has attracted keen attention from policy formers around the globe. These problems have created a shortage of power in both quantity and quality. A major shift in the electrical industry worldwide is the thinking that it is to be managed by the private sector rather than by the government.COM – Electricity Industry in the Public Sector in India . looked insufficient to cope with the impulsive growth in industrial and other sectors.IDEAINDIA. 2002). economic and agricultural fields.COM – Electricity Industry © M. considering its importance as a vital infrastructure for the growth of the country. and rigorous efforts to tackle these problems have become the order of the day. and inability to create sufficient returns for investment for growth. Like many other modern infrastructure facilities. Electricity industry was mainly treated as a Government business worldwide. The first generating station of the state was set up on the right bank of a tributary of River Periyar in 1910 (Velu. ‘The role of power sector in economic development is so tremendous that economists often establish a one-to-one correspondence between energy and economic development. L. the attention of the state IDEAINDIA. an era of reform for the power sector has opened up. Thus. a multitude of problems are popping up in the field of electricity industry. The repercussions of these changes are felt in this part of the world also. It was a hydroelectric project and that tributary named Mudirappuzha continues to be the site of large a number of hydroelectric projects in the state. Reforms different in nature and extent were tried in many parts of the world. Munnar. however impressive it was. The considered view of many of the influential groups of experts is that the poor state of affairs in infrastructure (including Electricity) is one of the basic maladies of tardy economic growth worldwide’ (Sankar. T. the conditions are not different and the situations call for a detailed probe into the problems. K. 1940). Though Kerala could achieve considerable growth in the sector and could help the overall growth of the state in industrial. the shortcomings were not negligible The history of electricity in the state is around one century old.

The first of these ventures was the Pallivasal Hydroelectric Project. It can be seen that the growth was encouraging.COM – Electricity Industry © M. commercial and industrial sectors. and Thiruvananthapuram. The next significant development was the formation of a separate department for electricity in 1932 Chithirathirunal Maharaja and his Diwan Ramaswami Iyer. In 1927. Formation of the Electricity Department paved the way for notable developments in the field.36 million units.3 mu within the first decade. growth in electric consumption acquired momentum in the domestic.This station was located at Thampanoor at Thiruvananthapuram. a considerable growth in demand as IDEAINDIA. Viyyur. Sarngadharan 2009 31 authorities turned to newer forms of generating energy. Gradually. Kothamangalam. a comparable electric transmission network had also been completed with 66 kV substations at Alappuzha.COM – Electricity Industry in the Public Sector in India . The first stage of the project was commissioned in 1940. Thermal generating stations were set up at Kollam. Its capacity was 13. of a capacity of 65 kW each.5 mW. C. 1990). which was followed by a steady growth in the subsequent years. The Government of Travancore set up a facility to supply electricity to the households of Thiruvananthapuram town. The establishment of a hydroelectric station under state ownership started a new era in the history of the energy scenario of the state. The total annual generation grew to 121. Mavelikkara.IDEAINDIA. a Thermal Power Station was established under government ownership at Thiruvananthapuram for production of electrical energy on commercial lines. By that time. Kottayam and Nagerkoil in 1934.P. (Electricity Department. The vast potential for hydroelectric generation in the state prompted the state authorities to take steps to establish stations for hydroelectric generation. The picture of the growth for the first ten years after the commissioning of the Pallivasal Hydroelectric was really impressive. Three oil engine generators. Aluva. By that time. Kundara. Within ten years. The total generation during 1940. the construction of which was started in 1933. The availability of cheap power was a boon to the total growth of the state in various sectors. the year of establishing the Pallivasal projects was only 3. 1939-40).e. (Government of Kerala. Kerala being a land of mountains and rivers. were installed and commercial production started in 1929. considering the limited administrative capabilities available in that period. An Electrical Wing under the State Public Works Department was entrusted with the administration of the scheme. it presented a fertile field for hydroelectric generation. the possibilities of hydroelectric generation attracted the attention of the technologists and the authorities. Kalamasserry. i.

etc. it was becoming more and more apparent that if the benefit of Electricity was to be extended to semi-urban and rural areas in the most efficient and economical manner. The implementation of the First Five-Year Plan had already been completed by IDEAINDIA. under section 5 of the Electricity (Supply) Act 1948. Till recently. For this purpose. until the enactment of the Electricity Act 2003. The Electricity (Supply) Act 1948 was thus enacted by the Government of India. in order to cater to the electricity needs of the state. Besides. The emergence and exit of private operators. 1947). (Government of India. badly needed regional / central administration and control. and particularly to co-ordinate the activities of the planning agencies in relation to the control and utilization of national power resources and for the constitution of state electricity boards’. ‘to develop a sound. the area of development must transcend geographical units’ (Government of India. the distribution networks and the final consumers. Speedy completion of the already started generation projects and starting of newer projects was the first task taken up by the Board.COM – Electricity Industry © M. Matters regarding generation and supply of electrical energy were regulated in pre independence India by the Electricity Supply Act 1910. The system consisting of the generation units. Sarngadharan 2009 32 well as generation occurred. The Government of India felt that ‘the coordinated development of Electricity in India on a regional basis was a matter of increasing urgent importance for post-war reconstruction and development. consistent with the needs of an entire region. technically known as the grid system. as the successor of the Electricity Department of the Travancore state. the transmission networks. The absence of a coordinated system in which generation was concentrated in the most efficient units and bulk supply of energy centralized under the direction and control of one authority was one of the factors that impeded the healthy and economical growth of electrical development in country. the formation of Electricity Department.autonomous bodies was found to be necessary. Thus.COM – Electricity Industry in the Public Sector in India . occurred during this period. This necessitated the enactment of a fresh bill to ‘provide for the rationalization of the production and supply of electricity and generally for taking measures conducive to electrical development’. the need for a comprehensive system of planning and implementation for the overall control of the electric network of the country was well recognized. that is.IDEAINDIA. constitution of semi. the Act of 1948 had been in force. 1986). The Kerala State Electricity Board was formed in April 1957. adequate and uniform national power policy.

it has achieved considerable growth in all dimensions. transmission. wind. 10905 million units of annual sales and more than two and a half lakhs kilometers of electrical lines. The functions can be broadly divided into four sub-functions. transmission. Sarngadharan 2009 33 the Travancore Electricity Department. 2644 mW of installed capacity. and distribution of electrical energy to the consumers of the state. At present. Functions under the generation wing involve construction and maintenance and operation of equipment and infrastructure for generation of electrical energy. revenue of 3600 crore. Nuclear. When the Kerala State Electricity Board is completing half a century of service to the state. The declared aim of managing generation. generation. making arrangements for financing of these constructions and operations. The installed capacity was 86 mW at the time of the formation of the Board. identification of other potential generation schemes such as Thermal. are the major components of the functions. Identification. running of necessary infrastructure for operation and maintenance of these networks. etc. their construction.200 lakh. it has grown to gigantic proportions to become the most influential and largest public sector undertaking of the state. with the particular motive to provide it at affordable cost to the rural population and for agriculture was tried to be achieved. come under the functions of the generation wing. Identification of potential locations for Hydro-Electric Projects. sale of energy and realization of its price. investigation and construction of power projects. commissioning. construction of transmission and distribution networks. Kerala is one of the few states without shortage of power to meet the demand. With a total consumer strength of 83 lakh. operation and maintenance. Identification of potential locations for Hydro-Electric Projects.COM – Electricity Industry in the Public Sector in India . There were about 79. the Kerala State Electricity Board is undertaking the reform process in tune with the Electricity Act 2003. 15 Extra High Tension Substations. The growth of the electricity system in Kerala took an unprecedented pace after the formation of the Kerala State Electricity Board. identification of locations for the same. IDEAINDIA. and the corporate functions.IDEAINDIA. 3800 km of high voltage lines and 3783 kms of low tension lines. their maintenance and operation.COM – Electricity Industry © M. distribution. The main functions of the Kerala State Electricity Board are generation. etc.000 consumers with total revenue of Rs. transmission and distribution of electricity. conducting detailed investigation and preparing design and estimate for construction of generation projects. namely.

and between the sub-stations and interstate lines so as to form a power network. identification of potential locations for ExtraHigh Tension Sub Stations. construction.COM – Electricity Industry in the Public Sector in India . construction. A transmission profit centre under the Member (Transmission) has been set up to manage the functions under the transmission wing. survey and preparation of estimates. formulating suitable tariff structure for different categories of consumers satisfying the legal as well as economic considerations. survey and preparation of estimates. investigations. are the main components of the transmission function. construction and maintenance of networks and systems necessary for transmission of electrical energy from the generation points to load centres. Investigations. preparation of proposals for future stations. and collecting the price for it. Small Hydro-Electric Projects. The functions under this wing involve design. The works of renovation. Sarngadharan 2009 34 identification of sources of funding and arrangement for financing of the projects also come under this function category. construction. modernization and up-gradation of the old projects. operation and maintenance of transmission lines between the generation stations and the sub-stations. survey and preparation of estimates. operation and maintenance of sub-stations. maintenance of dams and monitoring of the progress of works of private small Hydro-Electric Projects are also done by this win. Setting up and maintenance of the systems and infrastructure for load-dispatching within the state and regulation of the inter-state flow of power are also tasks within the transmission function. planning.IDEAINDIA. invoicing the consumers accordingly and collecting the charges.COM – Electricity Industry © M. Investigations. is entrusted to the distribution wing. making studies for forecasting the IDEAINDIA. The task of distributing electrical energy to consumers throughout the state at the required quantity and voltage. budgetary control and optimum generation. giving electric connection to the consumers and providing proper service to them including quality power and prompt breakdown maintenance. augmentation and extension works of old Hydro-Electric Projects. preparation of estimates. operation and maintenance of distribution network between the sub-stations and the consumers. In order to manage the functions under the generation wing properly and efficiently. construction. operation and maintenance of transmission lines and sub-stations form the major portion of the functions under this area. a generation profit centre under the Member (Generation) has been set up. Identification of load centres with regard to the present and the near future load conditions.

For this wing also.COM – Electricity Industry in the Public Sector in India . These studies were successful in taking a close look into the problems and in formulating solutions. on the other hand. Many studies by official agencies as well as by experts in the field have already been made. agricultural. legal matters and such other activities of a common nature are handled by a corporate office. making and implementing plans for meeting them are elements of the distribution function. cross subsidies. Sarngadharan 2009 35 future demand. But. etc. Other categories of consumers include commercial. a distribution profit centre under the Member (Distribution) has been set up. the consumers are divided into various categories and they are dealt with in different ways with regard to tariff. Depending upon the use of electrical energy. planning. The Electricity Act 2003 and the reform process already on the rails are among the results. Scope of the study Power industry has been facing a crisis worldwide.IDEAINDIA. The end users of the product of the Kerala State Electricity Board are the electricity consumers. subsidies.COM – Electricity Industry © M. The corporate functions include the finance functions and other functions like human resource management. research. the situations are not different. problems started chasing this organisation also. and liaison with government agencies. The Kerala State Electricity Board recorded satisfactory performance at the start. reforms. Considering its importance as the vital infrastructure for the industrial. public lighting and traction. too. is smaller when compared to other states of the country. Matters related to finance. There are mainly nine categories of consumers served by the Kerala State Electricity Board. Kerala has the peculiarity of a large percentage of consumption by household consumers or domestic consumers. The Board also had to face the IDEAINDIA. planning. In India. Ability to cater to the growing demands of the society and maintaining a sustainable pattern of functioning are the main challenges before the industry. economists and policy formers of various countries are working hard for identification of the possible flaws and remedies for them. of late. engineers. economic and social growth of humanity. Exercises for identification of the shortcomings and formulating solutions are seriously undertaken. experts. business development. The industrial consumption. human resource management. service conditions.

Electricity being a vital factor in the economic well-being of a society the governmental agencies also has made serious studies in the field. The study brings out the inherent weaknesses of the organisation being in the public sector. only a limited number of serious studies have been made on the working of Kerala State Electricity Board. Failure of the organisation to function on commercial lines was a glaring observation.K. Of these. materials management and costing in the organisation. Another work titled Kerala State Electricity Board – An evaluation of its management functions by George Varghese. Such a study can throw light on the shortcomings in the financial. Many experts and researchers seriously approached the problems and came with their conclusions. K. of the organisation in its earlier. has made an effort to study the management and administration of the Kerala State Electricity Board. This study also draws a clear picture. Literature Review In spite of the decisive role of the electricity industry in the economic growth of the state. The sustainability of the key industry of the state needs to be addressed seriously. the work provides the basis to observe the picture of the organisation in its early years. But no serious studies are seen to be made from a commercial point of view. The work Administration of State Electricity Boards with Special Reference to Kerala has gone into considerable depth in analyzing the success of the managerial and administrative systems in the functioning of the industry. the handling of the problem on commercial and economical planes has not been made in a full scale.IDEAINDIA. T. the Report of the High Level IDEAINDIA.COM – Electricity Industry in the Public Sector in India . He has done an analysis of all the major functions like planning. Even after the passage of 30 years. Most of the studies were technical in nature. rather flourishing period. from a commercial perspective. Sarngadharan 2009 36 challenges of failure to meet the growing demands of the society and to maintain sustainability. (1980) has dealt with the managerial side of the functioning of the Kerala State Electricity Board. Sreevalsan. He has identified many flaws in the managerial aspect of the organisation. Though a few studies on the technical as well as operational planes have been made. back in 1976. managerial and commercial performance of the Board. The study can fetch useful conclusions to the policy formers at this juncture of reforms.COM – Electricity Industry © M.

(1993). K. The problems of the emerging energy scenario were sought to be diagnosed in an editorial article of The Economic Times (1993) with a view to formulating possible solutions. which was submitted during 1984. according to him. The work identified the problems which affected the ability of the organisation to meet the needs of the consumers and provided many suggestions to overcome them. IDEAINDIA. Both the operational and economic as well as commercial sides were critically analysed in this study by Shina. An Evaluation of the performance of Kerala State Electricity Board in production and distribution of electrical energywas an effort to evaluate the functions in a comprehensive way. 1984. poor productivity. Many unhealthy trends in trade unionism in the industry have been brought out in this study. With the sudden growth of industry and economy.COM – Electricity Industry in the Public Sector in India . Sarngadharan 2009 37 Committee appointed by the Union Government. It has found out the areas where the growth turned unbalanced and was not in the wider national interest. The complex problem of trade union activism and industrial relations in the Kerala State Electricity Board was closely studied by Rajendran Nair. Ananthakrishnan. etc. identified the inadequacy of the current system for power generation and established the need for thermal power generation in the state (1993).IDEAINDIA. improper planning. higher technical loss. Industrial Relations and Multi Unionism in Kerala State Electricity Board (1994). in his research work. The work gives a picture of the labour scenario in the firm in the pre-liberalization period. D. This realistic analysis of the problem made an exhaustive list of the flaws in the system. was a really notable analytical report which threw light on all the corners of the industry.. Higher leverage. (1987) revealed many shortcomings affecting the successful operation of the organisation. by Hemalata Rao.COM – Electricity Industry © M. V. A study on the financial performance of the Karnataka State Electricity Board. the slackness in the growth of the organisation was seriously felt by the persons on the professional side of the electricity industry rather than on the academic side. were the major flaws identified by the author. (Union Government.). defective costing techniques. The tap able Hydel potential in the state would not be sufficient to meet the growing needs of the state.

just after the globalisation decisions. that is. He examined the cost-benefit relationship of loss reduction projects and established the viability. Ajay Shekhar Pandey and others have given an account of non-conventional electricity generation suitable for the modern power scenario (1997). Gopinath. Sambamurti.IDEAINDIA. M. he has not only given a brief account of the history and problems of the industry but has also seriously discussed the challenges and orientations in that period.. The importance of this as an alternative solution for the problems of power shortage has been demonstrated by him. M.K. of the Government of India (1997). He brought out the vast Hydel potential in India with workable solutions for its development in the private sector.K. sketched a profile of change in the operation and orientation of the electricity industry. and Krishnaswamy.rating the existing power projects. the new outlooks and the reform initiatives. C. The work brought out the potential of the sector and its probable contributions to the energy starving country. He has given a view of the global scenario. analysed the scope and viability of renovating and up. went into the problems faced by Indian independent power producers in funding. Mohan Sastri.R. IDEAINDIA. The scope and potential of energy conservation and its financial impact were brought out to a board extent in the work. The aspect of energy conservation in the light of low energy efficiency on a techno-economic plane was studied by Hydari (1995). R.COM – Electricity Industry © M. workable financial package. and managing construction of new power projects to exploit the tremendous demand for power in India (1997). studied the techno-economic viability. The work threw light on the reasons for slow growth of the power industry in the private sector. especially the hydro electric ones (1997).P. more than a decade after the globalisation initiatives. government cooperation. In this work Electricity industry in transition (1998). in the transmission and distribution sectors. 1992-93. was studied by Jimmy George (1995). The work is of interest to a researcher approaching the problem in the current situation. during the initial years of globalisation efforts. This showed the graveness of the situation and its adverse impact on the electricity industry and the economy of the state. O. Sharma.S. risk coverage and other key factors governing successful implementation of hydro power projects under the privatisation policy. Sarngadharan 2009 38 The loss in the power system of Kerala.COM – Electricity Industry in the Public Sector in India .

K. the financial management aspect of the Kerala State Electricity Board in 2001. for 2000 and beyond. He found out reforms based on commercial principles to be a necessity for the period. According to the study. in the study Forecast demand of electrical energy in the service sector of Kerala. He sought to prove that prediction of future demand was found to be a complex affair. The work has brought out certain serious drawbacks in management of the financial aspect of the organisation. He concluded that the reform process was yet to give the desired result. in his brief but comprehensive work– Reforms in Power sector (1999). rather than seeing it as mere industry. Parameswara Sharma. Binod. It gave an analysis showing the weak and strong sides of the actions of the power sector in the country. He advocated the need of viewing energy production as an infrastructure development also.IDEAINDIA. reviewed the power sector reform efforts in the various states of India with a view to identifying the pros and cons of different approaches IDEAINDIA. seeing it as different from other industries. (1999).COM – Electricity Industry in the Public Sector in India . In this work Gupta. and others tried to evolve an accurate method for demand prediction and made use of it to foresee the future needs in different areas. Ramachandran in 2000.COM – Electricity Industry © M. D. D. The work calls for a thorough change in the very approach of the organisation and recommends a new approach to develop the industry to meet the demand. Bipin Sankar Periyamana went into the intricacies in forecasting the future demand of electricity in the state and suggested a suitable strategy for reaching a conclusion (2001). India’s Power Sector Reforms Update provided a bird’s-eye view of the reform process across the country. dug into the weakness in the operation of State Electricity Boards and formulated suggestions for reforms and evaluated the reform process. He objected many arguments put forward by the advocates of the new trends of reform in the electricity sector. Anil Prasad V studied along with some other public sector organisations of Kerala. Sarngadharan 2009 39 Kale. A futuristic picture was drawn by Anitha S. viewed the problem from a new perspective. The book has given the current day energy status and the possible alternative policies for evolving a strategic approach for the future years. by analyzing and forecasting the state of affairs. S. the functioning of the organisation on a burocratic model has caused overlooking of economically serious issues. in his article Effective Energy Management (1999). V. V.

Objectives The present study was undertaken with the specific objectives mentioned below: .COM – Electricity Industry in the Public Sector in India .to probe in to the attitude of various categories of consumers on the financial charges levied by the Board for the services provided. operation and policies of the regulators in the electricity sector in the country (2005). Methodology IDEAINDIA. The work analysed the real merits against the impending dangers of the current reforms exercise. . . Nirupam Bajpai and Jeffrey D Sachs critically reviewed the failures and shortcomings in the implementation of the power sector reforms in India (2004).IDEAINDIA. He further evaluated the suitability of the current legal frameworks to cope with the situations. Amulya K N Reddy (2003) described briefly the paradigms that guided the power sector of India starting with the pre 1991 classical electricity utility paradigm which gave way to the current World Bank-led paradigms for power sector reforms.to assess the growth or otherwise of the assets and return of KSEB during the post liberalisation period. The author indicated certain failures on the regulators’ part to have slowed down the fast development of the industry on commercial lines. Sarngadharan 2009 40 (2003).COM – Electricity Industry © M. and . The role and importance of the regulatory commissions and their limitations were brought to light in this work. Navaroz K Dubash examined the formation.They strongly advocated more result-oriented and realistic steps.to examine the effectiveness in the performance of the Board in respect of the commercial sense in operation.to ascertain the methods of operation and the soundness of accounting practices followed by the Board. He found the new pattern to be more conducive to the financial viability of the industry.

being nominal in number. public lighting. These three districts were chosen for geographic consideration such as Southern.IDEAINDIA. Respondents covered under the sample were selected equally from all the districts. The selection of these three regions is being justified for the other reason that Thiruvananthapuram belonged to Travancore. followed by municipalities (40 X 3 = 120) and panchayats (30 X 3 = 90) totalling to 450. Sarngadharan 2009 41 The study has relied on both primary and secondary data. The sample for the study consisted of 500 consumers selected on a random from nine electrical sections located in three districts of the state. Ernakulam and Kozhikode. semi urban (municipality) and rural (panchayat) areas. For the study. Palakkad and Thiruvananthapuram considering the concentration of industrialization of these areas. random selection of five such respondents were selected taking the whole state as a unit. From each district. industrial HT. The respondents. The sample of this category consisted of 45 respondents chosen from Kalamasserry. Central and Northern regions of the state. agricultural. Primary data collected from the stakeholders. The last category ‘others’ included railways and bulk consumers. and senior officers in the research organisations like IDEAINDIA. administrative and other employees were interviewed dividing the number equally among the districts. under the category industrial HT. public water works.COM – Electricity Industry © M. domestic. The data collected from these sources were supplemented by the data generated from the experts in the field of power generation and distribution and secondary data available in the annual accounts and the statements of KSEB. There are eight categories of consumers for the KSEB.COM – Electricity Industry in the Public Sector in India . namely. commercial. However more number of consumers were selected from three city corporations (80 X 3 = 240). 400 numbers of the technical. namely. and Kozhikode to Malabar prior to integration of the regions on lingual basis in 1961 forming Kerala state. industrial LT. consumers and employees of the Board were basically used for drawing conclusions of the study. The three district selected were Thiruvananthapuram. three electrical sections covered under the study were also selected on geographical basis – one each from urban (city corporation). Systematic random sampling method was adopted with a view to giving due representation for all the categories of consumers. The experts chosen for the study(100 Nos) included the former senior technical and administrative officers of KSEB. are concentrated in industrial areas. and others. Ernakulam to Kochi. Economic Review brought out by the State Planning Board and other related Government sources.

IDEAINDIA. This necessitated the substitution of respondents with higher level of educational background. also requires special mention. percentages. The data generated in this process were also utilised for suitably modifying the interview schedule used for the pilot study. the total sample for the study consisted of 1000 respondents. examining the performance of KSEB on commercial line. after a pilot study and holding discussions with all the categories of respondents and referring the available literature of the working of KSEB and on allied areas. This was felt quite evident while holding discussions with the various categories of respondents.COM – Electricity Industry © M. The data collected for the study were analysed and interpreted by employing mathematical and statistical tools such as ratios. this state public undertaking engaged in providing public utility services to the economy in Kerala. compound growth rate and Z-test. IDEAINDIA. was viewed by the consumers as well as the general public not as a commercial enterprise. These experts were drawn on judgment basis from all over the state. 20 employees and 10 experts. were expressing their views in a lighter sense without understanding the intricacies involved. However. It was explicit in a few cases that the respondents. The interview schedule was finalized. The pilot study was carried out among 30 consumers. Sarngadharan 2009 42 ANERT. The limitation that there were only scanty literature available.COM – Electricity Industry in the Public Sector in India . Thus. Energy Management Centre and Engineering Colleges and other researchers in Power Engineering field. mainly consumers. The present study was an attempt to examine the performance of KSEB from the point of view its commercial operations. A structured interview schedule was designed for interviewing the consumers and experts.

ginger. areca nut.800 m in height. The range has many passes which have allowed a controlled interaction between Kerala and the lands lying beyond the mountains. Other passes linking Kerala with IDEAINDIA. rice. rubber.COM – Electricity Industry in the Public Sector in India . and Lowland. The Palghat pass. for a period of five to six months a year. from the eastern boundary and extend from the North to Kanyakumari in the South.34 percent of the total population of the country. This is an area of intensive cultivation – coconut.IDEAINDIA. cardamom and other species. South of Himalayas. the Bodinaikannur pass connects Devikulam and Munnar in Kerala with the Madurai district of Tamil Nadu. 32 km broad. The South-West and North-East monsoons with their accompanying down pour keep the land socked. The ‘Anamudi’ peak in the high ranges of Kottayam district rises to a height of three thousand meters and represents the highest point in India. cassava. Ghats are served as the effective rampart. Sarngadharan 2009 43 Chapter 3 FORMATION OF THE KSEB – A HISTORICAL PERSPECTIVE Kerala is a small state tucked away in the South West corner of India. ‘Agastyakudam’. which form the eastern ramparts of the state rise from very low altitudes of a few hundred meters up to about two thousand meters on an average. the ‘Periyar Ghat’ to the Nilgiri district. cashew. The entire western border is caressed by the Arabian Sea. Between these natural boundaries lies the narrow strip of land extending from Kasarkode in the north to Parasala in the south. It represents only 1. This is an area of major plantations like tea. banana.18 percent of the total area of India but has 3. the southern most peak in the Ghats is two thousand and forty four meters high. It is made up of undulating hills and valleys. coffee. Midland. In south. sugar cane and vegetables of different varieties are grown in this area. The ‘Western Ghats’.COM – Electricity Industry © M. The midland lies between the mountains and the lowlands. Kerala can be divided into three geographical regions Highland. It is separated from the rest of the peninsula by natural geographic boundaries. ‘Ezhimala’ is a rugged hill jutting into the sea in startling isolation on the Kannur coast. The ‘Western Ghats’ with their rich primeval forest having a high degree of rain fall. has played a bigger role in the alarums and excursions of history. pepper. The ‘Peranbadi Ghats’ provides access to Coorg. The highlands slope down from the Western Ghats which rise to the average height of 900 m with a number of peaks over 1.

Singapore. which is less than the national average of 35 per cent. the Mambam. It is famous for its rivers. insurance companies and tourism industry. There were a number of social and religious movements in Kerala. backwaters and endless beaches. Indianisation of the Church. the Keralites have migrated in large numbers in search of employment to several foreign countries like United States. and the British have contributed to the economic development of the state. and a hard working determined. Muslim reform movements and Land reforms in the state have made significant improvement in the social and cultural heritage. Though the power development in the State has been based mainly on the exploitation of its abundant hydro-potential.COM – Electricity Industry in the Public Sector in India . Kerala is quite advanced in terms of Human Development Index and this has contributed a new jargon ‘Kerala Model of Development’ among economists and social scientists. world standards of health. Its service sector is booming with financial companies. movement of Christian unity. mortgage companies. The Portuguese. The coming of the European powers gave a boost to the economy of Kerala in certain fields and this also helped in the gradual emergence of a new economic order. the State Government is giving a new thrust to develop hydropower from such small and medium projects which will have very little adverse impact IDEAINDIA. the number of people living below the poverty line is around 25 percent. Kerala’s participation in the freedom struggle is also significant. in South East Asia as well as to several counties of Africa and West Asia. the State is on its way to achieve self-sufficiency with its recent efforts to exploit thermal power to its full potential. Moreover. A major policy initiative of the State government in recent years has been to involve private sector participation in augmenting power supply. dedicated population is always setting standards in all most all the spheres of its activities. Malaysia. Improvements of intercaste relations. unani and naturopathy have also become quite popular among tourists. the Kumili and the Armaboly.COM – Electricity Industry © M. A state with 100% literacy. ayurveda. Sarngadharan 2009 44 Tamil Nadu are Thevaram.IDEAINDIA. consultancy services. In Kerala. Kerala has become one of the most sought after tourist destinations in the country as well as abroad. information technology and engineering. it has 14 districts with Thiruvananthapuram as its capital. national as well as international. real estate agencies. Besides. the Dutch. In modern times. Formed in the year 1956. The professionals of Kerala are among the most wanted experts in the fields of medicine. the contribution of Sri Narayana Guru assumes more importance in this context.

This is followed by Sabarigiri with 300 MW and Lower Periyar with 180 MW. The new wind units at Agali and Ramakalmedu are with capcities as low as 0. As stated earlier. and 3800 km of high voltage lines (Shina. Speedy completion of the already started generation projects and starting of newer projects was the first task taken up by the Board. The Urumi II and Madupetti projects are units having the lowest output with only 2. the Electricity (Supply) Act 1948. The installed capacity had grown to 86 mW.COM – Electricity Industry in the Public Sector in India .200 Lakhs.IDEAINDIA. as the successor of the Electricity Department of the Kerala State. the Act of 1948 had been in force.’ led to the constitution of the State electricity Boards in various states under section 5 of the Act. The growth of electricity system for Kerala took an unprecedented pace after the formation of the Kerala State Electricity Board. and particularly to co-ordinate the activities of the planning agencies in relation to the control and utilization of national power resources. Until the enactment of the Electricity Act 2003. 000 consumers by that time with a total revenue of Rs. All these units put together puts the State capacity at around 2311 MW. 1993). The implementation of the First Five-year plan was already completed by the Travancore Electricity Department. located at Idukki.75 mw each. can produce 780 MW of power. IDEAINDIA. and the third unit of the combined cycle power project of N T P C at Kayamkulam. Some of the new important thermal projects include the Brahmapuram Diesel Power Project.COM – Electricity Industry © M. on 1 st April 1957 in order to cater to the electricity needs of the State. While the majority of the hydel units have a capacity in the 10 to 75 MW range. There were 15 Extra High Tension Substations. Also coal based projects of large capacities in Orissa and Cheemeni in Kerala are on the anvil Apart from the four thermal units. D. the biggest unit. which was enacted by the Government of India.6 or 0.The Kerala State Electricity Board was formed. ‘to develop a sound adequate and uniform national power policy. The wind power unit at Kanjikode also has a low output of only two MW. whose output is available exclusively to Kerala. 3783 km of low tension lines. Sarngadharan 2009 45 on the environment. the Kozhikode Diesel Power Project at Nallalam. there are 17 hydel units and around 30 wind power unit in the State.4 and 2 MW respectively. There were about 79.

The commissioning of the Idukki Hydroelectric Project was a major breakthrough in the power development of the State.COM – Electricity Industry © M. the growth in installed capacity was rather fast so that electricity availability was considered abundant in the State. The annual generation capacity of the Sabarigiri Project is 1338 mu. Six units of 50 mW each of the Sabarigiri Hydroelectric Project were commissioned during 1966 –67. thus making a total capacity of 75 mW. Two units of 37. The output from an already existing reservoir was utilized here. and electronic and automatic controls are a few among them. underground powerhouse. A large number of bigger hydro-electric stations were established. was a unique one using many innovative technologies. thus making a total capacity of 780 mW. The arch dam concept. which was among the large stations of the country. The need for tapping smaller water IDEAINDIA. The commissioning of the next generating station was effected only in 1987. The station functioned well for about 40 years fetching revenue much more than the initial investment and now it is undergoing renovation process. The annual generation capacity of the station was 268 mu. The Project. thus making a total capacity of 300 mW.5 mW each of the Idamalayar Hydroelectric Project were commissioned. The annual generation capacity was 65 mu.COM – Electricity Industry in the Public Sector in India . thus making a total capacity of 15 mW. which was a huge leap in the installed capacity of the State. a station of comparable capacity is yet to be formed in the State. Still. Six units of 130 mW each of the Project were commissioned during 1976-86. However. the state of affairs started reversing in the later years as the development of generation schemes lagged much behind development in other sectors. The annual generation capacity was also an all-high at 2455 mu. The annual generation capacity was 380 mu. thus making a total capacity of 75 mW. Three units of 25 mW each of the Kuttiadi Hydroelectric Project were commissioned during 1972. Sarngadharan 2009 46 Faster development in electricity generation In the initial years of the KSEB. The Kallada Hydroelectric Project was an effort to tap the potential of smaller water resources.IDEAINDIA.5 mW each of the project were commissioned during 1994. even after a lapse of nearly three decades. The commissioning of the Idukki Hydroelectric Project created an illusion that power would remain abundant for many years and this caused serious lethargy in the planning and starting of new major projects. Two units of 7. The commissioning of a station that had a far greater capacity than those of the older stations was a major milestone in the history of power system development in the State. The development in those times concentrated on hydro-electric projects.

59 mu). thus totaling 2 mW.63 mu New Projects – Non-hydroelectric The over-dependence on hydroelectric projects created acute power shortages during the years in which the monsoon failed.IDEAINDIA. This station also started yet another era of small hydroelectric projects in the State.72 mu). only sparingly used. The Kanjikode (experimental) Wind Farm has nine units of 0. with an annual generation capacity of 493 mu. however. It was commissioned during 2001. Sarngadharan 2009 47 resources was badly felt by this time because of the environmental difficulties for larger projects.225 mW each. Commissioned during 1999. The annual generation capacity in mu was 75. Malankara project of 10.COM – Electricity Industry in the Public Sector in India . 6.9. The total capacity was 128 mW and the annual generation capacity was 896 mu. The Peppara Station is such a unit. Urumi I (3. The mu capacity was 74. This led to the realization of the necessity for other forms of electricity generation.5 mW and 7. The total generation capacity was 606 mu.Lower Meenmutty is another small hydroelectric project of capacity 3.4mu.28mu) were small units came up in 2004.5 mW and an annual generation capacity of 65 mu was commissioned in 2005. The total IDEAINDIA. Chempukadavu I (2.6. The Peringalkuth Left Bank Station was commissioned during 1999. The Kakkad Hydroelectric Project had two units of 25 mW each. The Kozhikode Diesel Power Plant has eight generators with a capacity of 16 mW each.75mW. Chempukadavu II (3. The Brahmapuram Diesel Power Plant has five generators with a capacity of 21.COM – Electricity Industry © M. its annual generation mu capacity was 262 The Kuttiadi Extension Project commissioned during 2001 has a capacity of 50 mW in two units of 25 mW each. Urumi II( 2.6 mW.32 mW each totalling to106. It is a small hydroelectric project with one unit and a capacity of 3 mw and generation capacity of 11.6.5mu. Thermal stations thus came into being. totaling 50 mW. The units were commissioned during 1999.03 mu). The units were commissioned during 1997-99. thus making a total capacity of 180 mW. Non-conventional energy sources were. The Brahmapuram Diesel Power Plant marked the start of yet another new era in the Kerala in electricity generation that is thermal generation.75mW. Three units of 60 mW each of the Lower Periyar Hydroelectric Project were commissioned during 1997.4mW.9. Mattuuppetty is a small hydroelectric project with one unit and a capacity of 2 mw and generation capacity of 6. The capacity was 16 mw in one unit.7 mW.5 mW and a mu capacity of 5. Malampuzha was a small project with a single unit of 2.

. D. The units with annual generation capacity of 2158 mu were commissioned during 1998-99. The latest trend both in Kerala as well as in the country is outsourcing of electricity generation. i. commissioned during 2001. other private companies. The installed capacity at the end of the Second Five-year plan was 133 mW.S.6 mW each.1. The growth has been swift from the end of the Second Five-year plan. (Shina. there was stagnation in the growth after the commissioning of the Idukki project.COM – Electricity Industry in the Public Sector in India . Private operators started setting up of wind projects in Kerala from 2008. other operators started coming to this field. there has been considerable growth in all the parameters of the Kerala Power System. from 1961. The Kayamkulam Thermal Power Station owned by the National Thermal Power Corporation has now a completed capacity of 359. The commissioning of the Idukki Project in 1978 was the major leap in this field. B. 2005). 2009) The growth of the Kerala Power System After the formation of the Kerala State Electricity Board. A further development of the station into a super-thermal power plant with a capacity above 2000 mW is on the anvil.9 mw (140 mu annual generation).E. thus started Generating Stations in the State. The growth during from 1999 to 2008 is shown in the Table 2. The National Thermal Power Corporation. The growth in installed capacity has been dealt with in detail above.e. However.. The Kasargode Power Corporation was also a private sector thermal project with a capacity of 21. As such. The speedy constructions of generation projects caused phenomenal growth in installed capacity. The growth in the various parameters including installed capacity for the last ten years is briefly analysed below. commissioned during 2001-2002. (Kerala State Electricity Board. raising the total capacity to 1012 mW.S was a thermal power station in the private sector with a total capacity of 157 mW (1099 mu annually). IDEAINDIA.IDEAINDIA. etc. The first units were commissioned in March 2008 and so far units of capacity around 25 mW has come up in Ramakalmedu in Idukki and Agali in Palakkad. Sarngadharan 2009 48 generation capacity was 4 mu.58 mw with three units of 116.COM – Electricity Industry © M.

68 2601.3 2350. The gap between the maximum demand and installed capacity available. results in peak load restrictions like load shedding.62 2614.COM – Electricity Industry in the Public Sector in India .2008) 2046. No 1 2 3 4 5 6 7 8 9 10 Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Megawatts (as on March 31.22 2644.22 2657. It indicates the maximum burden on the power system and decides the maximum installed capacity necessary to cater to the needs.2 IDEAINDIA.62 2601. (1961) grew to 1896 mW in 1999. Kerala StateElectricity Board Thiruvananthapuram Maximum demand Maximum demand is the maximum average hourly consumption obtained at any point of time of the concerned year.COM – Electricity Industry © M. There is an argument that the maximum demand now recorded is a shrunk-down value through low voltage and load shedding.22 2670.92 Source: Power System Statistics 2007-2008. Sarngadharan 2009 49 Table 2. The growth from 1999 to 2008 is shown in Table 2.22 2617. The figure which was as low as 114 mW at the end of the Second plan. There has been a heavy growth in the maximum demand of the Kerala system during these years.IDEAINDIA.1 Growth of Installed Capacity Sl.68 2420.

An account of the growth from 1999 to 2008 is shown in Table 2. In the earlier years.IDEAINDIA. The latest picture is one of high deficit and it paves the way for thinking of drastic changes in the power-engineering field. Table 2. It rose from 30 kWh in 1961.2 Growth of Maximum Demand Sl. Sarngadharan 2009 50 Table 2. electricity was considered surplus for the State.3 presents the data from 1999 onwards. No 1 2 3 4 5 6 7 8 9 10 Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Megawatts as on March 31st 1896 2177 2316 2333 2347 2426 2420 2578 2742 2745 Source: Power System Statistics 2007-2008 Kerala State Electricity Board Generation.COM – Electricity Industry in the Public Sector in India . to 240.4 IDEAINDIA. Per capita consumption The per capita consumption of a country or state is now considered to be an indicator of its industrial and economic growth. Import. The per capita consumption recorded a considerable increase.07 in 1996.COM – Electricity Industry © M. Export and Sales per annum These factors represent the actual business of the Kerala State Electricity Board. Then things reversed. but not up to the pace of the developed countries.

0 7142.9 5475.6 1346.0 0.0 6967.7 7330.4: Growth in Per capita consumption Sl No 1 2 3 4 5 6 7 8 9 10 Source: Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 kWh as on 31st March 285 301 312 395 392 386 400 427 465 477 Power System Statistics 2007-2008.8 6700.8 8149.9 8703.8 199. the bulk of the power had to be transmitted to the load centres from the generation centres.0 12049.4 0. The growth of transmission lines during these years can also be considered to be commendable.1 8910.COM – Electricity Industry in the Public Sector in India .2 8752.9 In million units as on 31st March 7601.4 10269.9 7745.5 11.1 8015.0 0.6 8074.0 6377.8 121.0 5543. Import and Sales per Annum Sl.6 0. Thus. Sarngadharan 2009 51 Table 2.2 5447.0 8667.IDEAINDIA.3 Growth of Generation. Kerala State Electricity Board Table 2.8 9384.1 6390.5 635. Kerala State Electricity Board Transmission lines When the system started growing. No 1 2 3 4 5 6 7 8 9 10 Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Generation per annum Import per annum Export per annum Total energy sales 9182.9 10319.4 7600.7 4275. Transmission lines are constructed for this.COM – Electricity Industry © M.8 1046.8 11331.6 3595. load centres started growing in areas far away from the generation centres. The Table IDEAINDIA.2 4488.9 9812.8 Power System Statistics 2007-2008.0 7655.

The progress from 1999 to 2008 was commendable and a year-wise picture is given in Table 2. 1961 to 1996 220 kV lines grew from nil to 1176 km .9 3518.4 2924. During 1961.9 2582.6 3554. km and 66 kV lines from 1373 km to 2669 km. A picture of the growth in these sectors from 1999to 2008 is shown in the Table 2. E.5 2056. During the initial periods.5 3873.T substations and allied equipment also recorded a steady growth.7 2933.5: Growth of Transmission Lines Sl. Kerala State Electricity Board Extra High Tension Arrangements These are also required for power transmission and involve high investment.H. there were only 22 substations and during 1999 there were176 ones in service.0 2577.6 3802.1 3465.9 2577. Table 2.COM – Electricity Industry © M. 110 kV lines from 527 km to 2425. No 1 2 3 4 5 6 7 8 9 10 Source: Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 220 kV lines 110 kV lines 2809.COM – Electricity Industry in the Public Sector in India .9 Power System Statistics 2007-2008.5 3957.IDEAINDIA. from. that is.1 3038.9 66 kV lines 2673.9 2640.9 2641.2 2594.6.3 2948. IDEAINDIA.8 3901.7 2869.4 2640.2 in circuit kms as on 31st March 1897.8 3027.9 2911.9 3730.9 2577.9 2673.5.4 2996. Sarngadharan 2009 52 below gives an account of the rates of growth.1 2943.

area and number of consumers across the State.0 13766.5 8773.5 10573.6 2408.5 10305.5 11095 11826.0 Sl.COM – Electricity Industry in the Public Sector in India .5 2346.4 2261.6 2388.6 Growth of Extra High tension Arrangements Step-up Step-down Transformer Transformer Capacity in MVA on 31st March 2043.6 2388. An account of the growth from 1999 to 2008 is depicted in Table 2.0 13339.9 12432 13231. As distribution lines are the final outlets to the consumers its growth is important in the consumer satisfaction perspective.IDEAINDIA.8 2346. It is also an indication of the strengthening of the consumer base of the organisation.7.5 2363.5 9363.COM – Electricity Industry © M. Sarngadharan 2009 53 Table 2. IDEAINDIA. No 1 2 3 4 5 6 7 8 9 10 Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 EHT Substations Numbers as on 31st March 176 178 190 194 198 205 211 218 222 238 Source: Power System Statistics 2007-2008. It is through the distribution lines that KSEB reaches every nook and corner of the state.2 2346. Kerala State Electricity Board Distribution lines Distribution lines show the growth of the scope.6 2363.

Kerala State Electricity Board Consumer Strength and Connected Load IDEAINDIA. No 1 2 3 4 5 6 7 8 9 10 Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Numbers of transformers As on 31st March 28058 29551 31329 32585 33455 34758 36640 37724 39848 42401 Capacity mVA 3644 3909 4182 4389 4436 4640 4858 5033 5158 5423 Source:Power System Statistics 2007-2008.No 1 2 3 4 5 6 7 8 9 10 Source: Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 11 k V lines L T lines in Circuit kilometers as on 31st March 28091 174196 28672 180499 30036 187170 30971 191931 32054 196974 33280 201637 34235 207711 34596 217899 36419 226128 38235 234286 Power System Statistics 2007-2008.8. Table 2.COM – Electricity Industry © M.COM – Electricity Industry in the Public Sector in India .7 Growth of Distribution Lines Sl. distribution transformers are to be installed in load centres.IDEAINDIA. An account of the growth in this sector during the decade is shown in the Table 2. A fall in the growth rate with respect to the number of consumers is considered to indicate reduction in the quality of the distribution system.8: Growth of Distribution Transformers Sl. Sarngadharan 2009 54 Table 2. Kerala State Electricity Board Distribution Transformers With growth in the number of consumers.

with a probable correction for the modern time.4 lakh in 1999 . Table 2.6 69.5 10907.0 8917.4 9910. Kerala State Electricity Board Social Field While assessing the performance of any organisation.86 lakh in 1996 and to 56. Villages electrified numbered 1384 in 1999 as against 872 in 1961.3 Connected load in mW 7275. it can be taken as a measure of the burden on the power system of the State.0 83. whether in the private or public sector. its services in the social field require special attention.0 Power System Statistics 2004-2005. The number of streetlights grew from 82645 to 658643 and the number of pump sets grew from 4616 to 35340 in 1999. However.1 90. It was considered a measure of the demand. No 1 2 3 4 5 6 7 8 9 10 Source: Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 No of consumers In Lakhs As on 31st March 56.0 87. Sarngadharan 2009 55 This also represents the growth of business of the organisation.3 64. Connected load is the total load installed in the consumer’s premises.5 73.9: Growth of Consumer Strength and connected Load Sl. An account of these parameters in the recent decade is also shown below in Table 2. but in these days.4 60. streetlights and pump sets can be taken as indicators.IDEAINDIA. When electricity sector is studied.10 IDEAINDIA.2 10333.0 8150.2 11465.0 8551. village electrification.The total connected load rose from 311 mW to 7275 mW in 1999.5 66. when many specialized gadgets with limited time of use are there.1 9394.7 12378.COM – Electricity Industry in the Public Sector in India . The number of consumers grew from 1.75 lakh in 1961 to 46.0 78. this concept is questionable.COM – Electricity Industry © M.9. A picture of the growth during the recent ten years from 1999 to 2008 is given in Table 2.

10: Growth in Social Field Sl No 1 2 3 4 5 6 7 8 9 10 Source: Villages Year electrified 199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 1384 1384 1364 1364 1364 1364 1364 1364 1364 1364 Streetlights Pump sets Nos as on 31st March 658643 716390 763912 797053 820201 854584 908016 960839 999599 1049047 353405 373862 392295 405900 417640 430449 446366 460470 474602 490155 Power System Statistics 2007-2008.14 181112. Kerala State Electricity Board Revenue In a business organisation. growth of revenue earned.IDEAINDIA.11: Growth of Revenue Sl No 1 2 3 4 5 Year 1999 2000 2001 2002 2003 Rs.07 lakh in 1999.7 lakh in 1961 to 123471.COM – Electricity Industry © M.07 166924. Table 2.67 248068.11 presents the picture over the period from 1999 to 2008 Table 2. Lakhs on 31st March 123471.90 IDEAINDIA.51 194599. Sarngadharan 2009 56 Table 2. is of paramount importance. It is related to so many parameters from increased sales to effective costing procedures and collection efficiency.COM – Electricity Industry in the Public Sector in India . The growth of revenue during the initial plan periods was from 311.

12500 per month.IDEAINDIA. 14262 were workers and 7918 persons were officers. to the extent of service. The stake of the Kerala Government in the organization was converted into shares in 1998 in order to improve its credit rating as a prelude to restructuring.48 Power System Statistics 2007-2008. According to Power Policy of the government declared in 1998.30 291736. and policy decisions of the IDEAINDIA. In accordance with the results of the study. A preliminary study for restructuring was entrusted to M/s S N C LAVALIN International Inc.assisted project. Of this. the Kerala State Electricity Board has started the restructuring process. number of consumers and statewide growth of network. major changes have been happening day by day necessitating frequent updating of the data. The electricity network has also reached almost every nook and corner of the State and perhaps has thus become the most influential industry of the State. Canada.76 469695.20 336730. The Kerala State Electricity Board was a fully government-owned organization.COM – Electricity Industry in the Public Sector in India . The organization is undergoing swift changes currently. under a Canadian International Agency. Sarngadharan 2009 57 6 7 8 9 10 Source: 2004 2005 2006 2007 2008 275609. The consultants started the project named Energy Infrastructure Service Project with the assistance of an internally constituted committee of the Kerala State Electricity Board. Now the Kerala State Electricity Board is one of the largest public sector organizations of the State. discussions within the Kerala State Electricity Board. The Kerala Government’s decision was to retain the organization in the public sector as against the trend of privatization elsewhere in the country.COM – Electricity Industry © M.34 400970. and as an effort for the improvement of its performance. Kerala State Electricity Board Recent trends Within these years. The workforce included 23480 persons as on 31/03/2005. The details of growth have been analysed in the paragraphs above. and even during the course of this research work. the Kerala State Electricity Board has made considerable growth in all the phases from installed capacity and assets. The average emolument per person was Rs.

2000). Sarngadharan 2009 58 Government. there is an administrative set-up common to the three profit centres under the Chairman and the Member (Finance). (Radhakrishnan. The main feature of the new organizational structure is the individual accountability of each profit centre. Each of the profit centres has to pay for its inputs and make the income to meet its expenditure and the specified profits. the Board issued orders restructuring the Kerala State Electricity Board into three separate profit centres. Further. Accordingly. The new company is yet to be registered. liabilities and the employees of the organisation to be handed over to a newly formed Government owned company. Finance secretary and one non – official member.COM – Electricity Industry in the Public Sector in India . The members are the Chairman.COM – Electricity Industry © M. that is when this report is being written the organisational set-up necessary for the reforms has not been finalised.IDEAINDIA. Member (transmission). Until the formation of the company the government appointed the present Board as the managing committee and empowered them to manage the organisation on the behalf of the government and allowed functioning of the organisation with the same structure for the time being. However. K. for dealing with the corporate functions. in pursuance to direction from the Union Government the Kerala Government issued orders ceasing the functioning of the organisation as Kerala State electricity Board under the old Act of 1948. the whole set-up is partitioned into three profit centres functioning under the respective Members. IDEAINDIA.As mentioned above. Even as on March 2007. During September 2008.Member (Finance). It is described in detail to give a clear picture of the organizational set up The new organizational set up introduced in 1999. Further studies and other steps towards reforms are still going on. The Government took over the assets. The organizational structure is also continuously being modified to respond to changing needs and view-points. Member (generation). Member (distribution). the organizational structure formed after the first restructuring effort in 1999 forms a basis for all these changes and provides a reference for the basic functions delegated to various levels and sections. Power Secretary. makes the administration of the Kerala State Electricity Board vested with an Eight-member Board appointed by the State Government. as mentioned above. the organizational set up came into being and the postings of the top level were made in February1999.

COM – Electricity Industry in the Public Sector in India . Sarngadharan 2009 59 The organisational structure is illustrated in Fig 1 Corporate Office The corporate functions of the Board are divided into Finance and General Wings IDEAINDIA.IDEAINDIA.COM – Electricity Industry © M.

Organisation Chart of KSEB CE DIST NORTH CE DIST CENTRAL CE DIST SOUTH MEMBER Distribution CH ACCTS OFCR CH INTRNL AUDTR TARFCE COM & MEMBER Finance IDEAINDIA.CE GONST CIVIL CE O&M THERMAL HYDROCE O&M MEMBER Generation OPERATIONCE TRANS SYS NORTHCE TRANSMN SOUTHCE TRAN MEMBER Transmission CHAIRMAN IDEAINDIA.1. Sarngadharan 2009 LA &DEO CH FOR CONSRVTR CE IPC &BD 60 .COM – Electricity Industry in the Public Sector in India Fig 1.COM – Electricity Industry © M.

budgeting. management information system. etc. and distribution of centralized materials. The Chief Engineer (Corporate Planning) deals with resource planning. allocation. land acquisitions and environmental studies for new projects. project monitoring. The Chief Engineer (Technical. maintenance of general discipline checking power theft. and disciplinary matters. Sarngadharan 2009 61 SHCE GONST OFCRCH VIG CE S S&T L C ADVISORFIN The finance wing is headed by the Member (Finance). training and other human resources development activities. and funds allocation auditing. arranging for procuring and managing of funds managements. selection and posting of employees. inventory management.COM – Electricity Industry © M. research and development. managing payment of salary. etc. The Chief Engineer (Human Resources Management) looks after human resources planning. The Chief Vigilance and Security Officer is in charge of the functions related to prevention of corruption and malpractices. headed by the heads of the departments indicated. promotions. procurement. The Chief Engineer (Investment Promotion Cell and Business Development Cell) deals with matters. relating to functions like attracting private investments into the power sector and dealing with independent power producers including private players. An Inspector General of Police IDEAINDIA.IDEAINDIA. The Chief Engineer (Civil) carries out investigations. The duties broadly include identifying sources of funding. The general functions include the following elements. operation and development planning. Contracts and Materials) handles matters like inviting and awarding tenders for major works.COM – Electricity Industry in the Public Sector in India CIELACE CE HRM CE TCM CE CP DIR PR .

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deputed from the Government service is normally posted in this position. The Legal Advisor and Disciplinary Enquiry Officer look after the functions connected with legal matters including court proceedings connected with the Kerala State Electricity Board and disciplinary proceedings against the staff. The Director of Public Relations is in charge of public relation activities including liaison with the press, bringing out publications and advertisements, etc. The Chief Conservator of Forests deals with matters connected with clearance of forest authorities for projects or other installations. The whole Board organisation is divided into three profit centres, namely, those of generation, transmission and distribution of electricity. The Member (Generation) heads this Profit Centre. It manages all the generating stations owned by the Kerala State Electricity Board. It has to look after the operation and maintenance of power projects, construction of new generating stations, renovation of generating stations, procurement and management of inventory of spares, fuel. The Chief Engineer (O&M, Hydro), Chief Engineer (O&M, Thermal), Chief Engineer (Construction) and Chief Engineer (Small Hydro) function under him. The Member (Transmission) is the head of the Transmission Profit Centre. It deals with construction, operation and maintenance of transmission network and substations, load dispatching and management of inter-State power flow. As per the proposed scheme, it has to pay for the energy received from the Generation Profit Centre and can receive payments from the Distribution Profit Centre for the energy it gives out. The Member (Transmission) is supported by three Chief Engineers, one each for North, South zones and one for a centralized system operation. The Member (Distribution) is the chief of the Distribution Profit Centre. He has to deal with the construction, operation and maintenance of the distribution network, sale and invoicing of energy to consumers, etc. His area is again divided into three Profit Centres, based on geographical considerations. These three Profit Centres function under three Chief Engineers – one each for the South, the Central and the North zones The Subordinate Structure Figure 2.2 depicts the structure of the set-up below the Board under each of the Chief Engineers.
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Fig 1. 2. The Subordinate Structure Chief Engineer Deputy Chief Engineer Executive Engineer Assistant Executive Engineer Assistant Engineer

The number of Deputy Chief Engineers coming under one Chief Engineer varies widely, depending on functional and location factors. The number varies from one to six or seven Deputy Chief Engineers. The unit headed by the Deputy Chief Engineer is called a Circle. The function is mainly supervisory in nature. He exercises an overall control of the works under him and is responsible for maintaining the required progress of the works under him. In addition, he is given certain financial powers for sanctioning and tendering of works. In the transmission and generation sectors, he manages the fund flow and establishment matters of all the employees under his circle. The Executive Engineers head the units called divisions. Executive Engineers under Kerala State Electricity Board are considered to have work of an executive nature rather than of supervisory nature. In the distribution sector, Executive Engineers are responsible for fund flow management. Executive Engineers are located throughout the State on geographical and functional basis. At the same place, there may be more Executive Engineers for different functions such as generation, transmission, distribution and other technical functions such as electrical system protection, and communication. The Assistant Executive Engineers are the second-line managers, who are actually the field supervisors of the actual execution of the works. Their nature of function is supervisory rather than executive. They supervise the actual execution of works by the Assistant Engineers. In many sectors, they are given the task of heading the basic unit offices. The Assistant Engineers are the basic managers of the bottom-most level. They are directly responsible for the execution of the works. They are the direct field managers in all the works
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of the Kerala State Electricity Board. For contract works also, they are responsible to ensure the quantity and quality. The payments to contractors are made based on authorization by Assistant Engineers. The Finance wing, which provides staff functions to Kerala State Electricity Board, also includes managers of the line, Senior Superintendents, Assistant Accounts Officers, Accounts Officers, Senior Accounts Officers and Chief Accounts Officers. They work either subordinates to technical officers or independently, depending on the functional areas. There are independent accounting and audit wings functioning in the Kerala State Electricity Board. Though the Kerala State Electricity Board has made commendable growth in expanding electrical network to all the sectors and areas of the State, there are allegations that it has not risen to the level expected by the consumers of the State. The main criticisms are about the failure of the State Board to meet the increasing demand of electricity for the State. Even when electricity was supplied, it lacked the required quality, namely, reliability and voltage. Industries have to face the problems due to power cut and low voltage. The global failure of electricity industry to operate on commercially viable lines has occurred in Kerala also. A closer look can identify more problems at the micro level. Inability to form commercially viable tariff, difficulty in planning and implementing expansions to meet the need, insufficiency of capacity in the generation, transmission and distribution sectors, management and labour problems and attitudes, etc., have been depicted to be among the reasons for the pitiable State of the SEB. Electricity cannot be let off to face its problems by its own. As it is the industry that provides life-blood to the industrial Kerala, the state of affairs calls for an intensive investigation. All the above aspects are to be analysed closely. The present study proceeds on these lines.

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Chapter 4 CAPITAL STRUCTURE AND PROFITABILITY OF KSEB - AN ANALYSIS
Public enterprises play a significant role in the economic development of any nation. The basic objectives of public enterprises are to build a heavy industrial base and to create infra-structural facilities for the country so that they may effectively contribute to raise the standard of living of the people. In almost all countries of the world, state intervention has become a sine qua non for sound and balanced economic development. In India, the government has attached an added significance to the expansion of the public sector, mainly for removing the regional imbalances and for strengthening and safeguarding the overall interest of the society. The public sector occupies a strategic and crucial position in the Indian economy. It was expected to be the principal agent for a rapid economic and social transformation, by developing infrastructure and the core sector, and closing the gaps in the industrial structure. In the words of the late Prime Minister of India, Jawaharlal Nehru, the dominant position of the public sector in the financial field is intended to control and guide the private sector, wherever necessary. It is also likely to step in, if and when private enterprise fails to improve economy. If there is a deviation in these lines of thinking, of late, the failure of effective financial management in the public sector is one of the important reasons. It is needless to emphasise the importance of the power sector in the infrastructure development areas. It is the key ingredient for the economic as well as industrial growth of the country. As such, a close look at the financial picture in the power sector is important in the current situation. It is well known that financial system and its operation are important aspects of public administration. The power industry in India has been facing a multitude of problems, the main one being financial. In spite of the ever increasing demand for its commodity - power, the industry has miserably failed to meet it. The installed capacity of the
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country is around 1,10,000 mW, with a gross generating capacity of 5, 25000 mu as at the end of 2008-09. This indicates a peak deficit of 135 and energy deficit of 7 per cent. Increasing production capacity in tune with the growth of demand could not so far accomplished by the public sector power utilities inability to identify sources for financing the huge need of capital, to save the situation, is a glaring feature of the Indian situations. In Kerala also, the situation is not different. The Kerala State Electricity Board, since its inception in 1957, has been contributing to the economic, commercial and social sectors of the State. The objectives of setting up the Board were the generation, transmission, and distribution of electricity in the state of Kerala. Supplying electricity to whomever demanding it, balanced development of the infrastructure including transmission and distribution network, exercising government control over this vital sectors and were also among the objectives. Originally, this business was carried out by the Electricity Department of Kerala Government, before the setting up of Kerala State Electricity Board under the provisions of the Indian Electricity Act 1948. During the process, the assets of the Department were transferred to the Kerala State Electricity Board, treating the transfer value as long- term loan to the Board. Total assets of the Board grew from Rs.30397.14 million to Rs112773.4 million during 1994-95 to 2007-08. Still, the Kerala State Electricity Board is short of production to meet the internal demand. Despite this, the inherent inefficiencies of the public sector undertakings, the short-sighted views of the governments, the reluctance of the policy makers to demand it as a sustainable establishment and the consequent failure to establish realistic tariff, and growing indiscipline among the affected, have affected the Kerala State Electricity Board also. The credit rating of the organisation also was not fair, with the result that obtaining finance for expansion became difficult. The installed capacity became insufficient to meet the growing demand from industrial, commercial and other sectors. A major change in the financial picture of The Kerala State Electricity Board was made by the Government in 1998. Then, in the line with the power policy of the Government of Kerala, Rs.15530 millions of government credit was converted into
IDEAINDIA.COM – Electricity Industry in the Public Sector in India

and to take decisions regarding future business. In this regard. is ‘the indicated quotient of two mathematical expressions and as the relationship between two or more things’. measured in terms of its ability to pay the interest regularly and repay the installment of the principal on due dates. However. Sarngadharan 2009 67 equity in order to improve the credit rating of the organisation. transmission and distribution with administrative control vested with the Board. They may be defined as the financial ratios which throw light on the long-term solvency of a firm as reflected in its ability to assure the long-term creditors. There are many analytical tools available to evaluate the financial health of a firm. the Board reorganized itself into three profit centres each for generation. solvency and creditworthiness have an added importance and thereby require a closer analysis in this study. where new investment has become critically inevitable.COM – Electricity Industry © M. The enactment of the Indian Electricity Act 2003 has further made many changes imminent. a look based on opportunity cost and time value can be made on a comparative basis.COM – Electricity Industry in the Public Sector in India . or in one lump at the time of maturity. Professionals have created many IDEAINDIA. In financial analysis. Investment decisions are to be critically evaluated at each point. the operation as independent accounting is yet to be implemented. Ratio analysis is a powerful tool of financial analysis. An accounting figure conveys meaning when it is related to some other relevant information. as defined in the Webster’s New Collegiate Dictionary. Leverage or capital structure ratios are much useful financial parameters which help to examine the long-term solvency of a firm.IDEAINDIA. In addition. Capital Structure Ratios of the Board The long-term creditors would judge the soundness of a firm on the basis of its longterm financial strength. Ratio analysis helps to asses the efficiency of a business operation. which has much relevance in this context. a ratio is used as an index or yardstick for evaluating the financial position and performance of a firm. with regard to periodic payment of interest during the term and repayment of the principal on maturity or in pre-determined installments on due dates. from the above perspective. Ratio. In the present condition of the power sector. The absolute accounting figures reported in the financial statements do not providing a meaningful understanding of the performance and the financial position of the firm.

Here. This ratio serves as a useful indicator to the creditors for decisions on financing the firm. computed with the secondary data gathered from the Board. The interest and the terms of credit have a strong bearing on the debt ratio. popularly called coverage ratios. the firm will not be able to borrow at all. Debt ratio is computed by establishing relationship between debt and total assets.COM – Electricity Industry © M. IDEAINDIA. The various types of such ratios. First. are calculated from profit and loss account. there are ratios which are based on the relationships between borrowed fund and owners’ capital. However. Assets include total assets. when debt ratio crosses some point. but mutually dependent and inter-related. are discussed below.IDEAINDIA. types of leverage ratios. In fact. Debt Ratios Debt ratio highlights the relative importance of debt financing as percentage of the total assets of the firm.1 shows the debt ratio of the Kerala State Electricity Board. as shown in the balance sheet. A low debt ratio implies a greater protection for the position of creditors. Sarngadharan 2009 68 mathematical models which help this and other useful comparative analysis. it should be remembered that all these analytical tools have their own limitations depending upon the size of the firm. Table 4.COM – Electricity Industry in the Public Sector in India . the sound type of capital structure ratios. goals and objectives and form of ownership There are two different. debt includes short-term as well as long-term debts. It shows the percentage of the firm’s assets supported by debt financing. nature of activities carried out.

COM – Electricity Industry in the Public Sector in India .83 70.12 0.06 0.24 0.17 The average of 76.39 79.14 0.06 0. Debt Equity Ratio Debt Equity Ratio is the measure of relative claims of creditors and owners against the firm’s assets. which means a comparatively lesser dependence on outside fund. as seen from the steady increase in debt for early years. It is normally calculated as long-term debts divided by shareholders’ equity. this figure can be taken as normal.1 DEBT RATIO -1998-99 to 2007-08 Year Total debt Ann ual Gro wth Rate Total asset Ann ual Gro wth Rate Rati o per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Average 509267 607611 783101 915621 1027760 1001177 1021625 1041137 781644 775063 0.38 78.IDEAINDIA.02 79.12 0. Considering the mode of operation of the electricity industry in India. Compound growth rate for the total debt for the period was 5 per cent and that of the asset was also 5 per cent.31 75.63 81.19 0.99 68. Sarngadharan 2009 69 TABLE 4.16 0. This compound growth rate for the debt followed by a corresponding growth rate in assets is a favourable symptom for a growing concern.18 0.15 0.73 76.19 0.11 0.05 704320 809797 998953 1149827 1268493 1261300 1303000 1337682 1101046 1127734 0. where higher dependence on out-side funding is prevalent. this debt ratio can be understood to be accepted by the financial institutions of the country and abroad easily.05 72. Moreover. Shareholders’ equity includes common share holders’ equity plus preference IDEAINDIA.11 0. as the Kerala State Electricity Board still succeeds to attract borrowed fund.17 is a moderate figure for debt ratio.03 78.19 0.22 0.41 77.COM – Electricity Industry © M.10 0.

the firm had to increasingly depend on borrowed funds to a greater extent.17 0.36 185672.12 0.07 155.06 0. the ratio is called debt to net worth ratio.81 215851.61 205. This is quite natural. The long-term liabilities are only considered here.05 195052.06 0. like the Kerala State Electricity Board that requires huge blocked assets.16 0. Shareholders’ equity is the net worth. The Debt Equity Ratio shows the extent to which debt financing has been used in the business.67 202186. that is.04 234205.21 175.05 0. This is mainly on account of the conversion of Government debt into Government-owned equity.14 0.2 shows the Debt Equity Ratio of the Kerala State Electricity Board TABLE4.IDEAINDIA.06 0.07 296545. A high ratio indicates inflexibility in the firm’s operation due to increased pressure from creditors.79 203.39 371362.56 260122.65 158.23 535565.97 352670. Therefore.32 509416. by taking the long-term debts only or by including current liabilities also.42 249852.23 78.91 0.23 0.05 0.88 281375.14 Source: Financial records of the Kerala State Electricity Board The Debt Equity Ratio of the firm got progressively reduced during the period under review. the Kerala State Electricity Board had to invest much and the Government was not ready for any additional investment as equity.86 240732.06 0.75 211.88 355109. This has improved the creditworthiness of the firm by reduction of the commitment towards payment og interest and other charges. The significant reduction in the trend.07 0.72 454133.89 161. There are two ways of treating debts for debt equity ratio. Thus.67 319401.03 -0.23 52. Sarngadharan 2009 70 share holder’s equity.COM – Electricity Industry in the Public Sector in India compound growth rate for debt and equity is a healthy .30 0. since it looks more suitable for a firm.EQUITY RATIO 1998-99 to 2007-08 Annual Annual Long-term Growth Growth debt Rate Equity Rate Ratio per cent Year 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 302749.63 211. Table 4.06 0.2 DEBT .52 477190.02 -0. as for the development.79 457140.COM – Electricity Industry © M.40 125.04 0. IDEAINDIA.

Alternatively. It can be computed in two ways.07 147.04 0.16 183.06 0.47 169.47 89. Table 4.93 508406.08 242. Net worth represents paid up capital plus reserves and surplus.01 195052.81 215851.04 234205.70 175.07 296545. less intangible assets.21 0.05 0.88 281375.56 260122.3 CAPITAL EMPLOYED TO NETWORTH RATIO Year Capital employed Annual Growth Rate Net worth Annual Growth Rate Ratio percen t 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 287647. The compound growth rates for capital employed and for net worth indicated progress in the early years.91 0.58 284260.10 0.29 583113.05 0. One method is considering capital employed as equal to long-term liabilities plus owners’ equity.22 248.59 544066.23 0.06 0.3 shows the Capital Employed to Net worth Ratio of Kerala State Electricity Board TABLE 4.09 0. it is considered equivalent to net working capital plus fixed assets.06 0.1 492860.67 202186.06 0.57 646922.98 Source: Financial records of the Kerala State Electricity Board The Net worth showed a steadily increasing trend during in the decade under study.10 175.COM – Electricity Industry © M. excepting in the latest years.IDEAINDIA.5 303632. Of course.00 0.97 352670. Capital employed also has had a similar trend.19 433410. the latest trend for capital employed is on the other way.06 0.00 86. The term ‘capital employed’ refers to long-term funds supplied by creditors and owners of the firm.82 200.19 0. Sarngadharan 2009 71 Capital employed to net worth This ratio also shows the basic relation between debt and equity.52 343351.67 319401. IDEAINDIA.9 0.86 240732.79 217.19 0.COM – Electricity Industry in the Public Sector in India .18 0.

63 73850.94 174.00 -0.13 0.04 0.02 0.00 -0.34 202.09 0. In other words.16 0.28 111770. the figure reached maximum.00 161.44 158.IDEAINDIA.76 72809.02 153.03 0. The concept of net earnings before taxes is used because interest is tax.62 Source: Financial records of the Kerala State Electricity Board The figures do not show a better performance so as to impress the financial analyst.27 49185. In 2001 – 2002.32 39421.78 67278. It is determined by taking into account the operating profit and the interest charges. the ability of the firm for debt servicing could not be adversity affected.39 51731.deductible. However.32 135.42 59031.22 0. The interest charges imply the fixed interest charges on loans.82 0.42 150. which indicates favourable changes in IDEAINDIA.28 108954. TABLE 4. that is.INTEREST COVERAGE RATIO Year EBIT Annual Growth Rate Interest amount Annual Growth Rate Ratio percent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 60832. This ratio shows how many times interest charges are covered by EBIT.64 64894.29 0. out of which they are paid.55 0. a larger coverage means less risk.01 48010.16 112. the operating profit means earnings before interest and taxes (EBIT).18 0.16 0.31 32344.14 0.COM – Electricity Industry © M. Sarngadharan 2009 72 Interest coverage ratio It is a measure of debt servicing capacity of a firm in respect of fixed interest on longterm loans. a too high ratio implies unused debt capacity.77 131084.01 62683. Table 4 .43 159. it indicates the extent to which a fall in EBIT is tolerable.36 0.8 72631.4 .21 0. Here. It is also known as time interest earned ratio. From the point of view of creditors.COM – Electricity Industry in the Public Sector in India .4 shows the variation of interest coverage of the Kerala State Electricity Board during the period of the study.15 189.03 39651.24 0.57 64820.35 70058.5 126495.01 148.

They compare short-term obligations with short-term resources available to meet these obligations. The current assets of the Board include inventories.5 shows the ratios of current assets to current liabilities of the Board. current liabilities consist of sundry creditors. Current liabilities. advances and accrued income. It is customary that liquidity ratios are computed to measure a firm’s ability to meet its short-term obligations. outstanding expenses and bank borrowings. debtors. the relationship between current assets and current liabilities is very significant. It not only depicts its ability to meet the commitments but also gives a vivid picture of its cash solvency. The compound growth rates also depict unfavourable signs Liquidity position Analyzing the liquidity position of a firm is of utmost importance in evaluating its performance. IDEAINDIA. Table 4. The average value also stood not in a favourable range. Current Ratio The term current assets refers to those assets which change in their form and substance in the normal course of business operation and are ultimately realized in cash. These obligations are normally paid out from funds arising from the realization of current assets. cash and bank balances.COM – Electricity Industry © M. But.COM – Electricity Industry in the Public Sector in India . Sarngadharan 2009 73 performance. As such. On the other hand. on the other hand.IDEAINDIA. Current ratio may also be expressed as a percentage of current liabilities to current assets. The fall in EBIT during 2002 – 2003 and afterwards had its own impact in the ratio. are short-term obligations. Current ratios and quick ratios are the quite commonly used ratios for this purpose. From these ratios much insight can be obtained into the present cash solvency of the firm and the firm’s ability to remain solvent in the event of adversity. more confidence in the attitude of creditors tends to stabilise the value at a slightly lower value. when the strength of working capital as such rather than solvency is sought to be emphasised.

If this is applied. Sarngadharan 2009 74 TABLE 4.73 70910.00 0.69 133.27 0.97 669774. bills receivable.IDEAINDIA. The compound growth rate figures for current assets and current liabilities confirms problems in meeting the day –to.59 56. IDEAINDIA. Table 4.41 343721.20 373503.17 0.18 0.24 0.68 63.90 438430.12 142.11 646365. Quick ratio Quick ratio indicates the relationship between quick assets and current liabilities. and marketable securities.60 567491.70 589391.10 465611.37 108.22 0.18 0.18 0. the Board is seen to move towards an unhealthier position in respect of liquidity.18 0.26 0. Other assets which are considered to be relatively liquid and included among quick assets are debtors.CURRENT RATIO YEAR CURRENT ASSETS Annual Growth Rate CURRENT LIABILITIE S Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 294181.COM – Electricity Industry in the Public Sector in India .90 518344.05 590501.82 120.13 145.09 10.26 0.29 0.99 134.78 692711. Those circulating assets which are readily converted into cash are liquid assets.80 325960.00 252500.19 301394.17 0.21 475870. Also.99 0.24 Source: Financial records of the Kerala State Electricity Board The accepted figure for current ratio is 2:1 and this general rule has no relevance in the operations of a public enterprise in the electricity industry.COM – Electricity Industry © M.03 206517.01 0.15 -0. it shows a better rate of increase of current assets when compared to current liabilities.45 136.5 reveals that the current ratio during the period under study varied shows an unfavourable trend. Cash is the most liquid asset.13 0.5 .00 681518.day obligations.64 138. Increase in current ratio indicates adequate margin of safety between current assets and current liabilities.26 0.22 531791.

TABLE 4. Net working capital to capital employed is used to measure liquidity.6 shows the variation of quick ratio of the Kerala State Electricity Board during the decade under consideration. Quick liabilities would include payments which are nearly maturing immediately. The Liquid assets had a compound growth rate of 4 per cent against 12 per cent for the current liabilities.26 0.07 465611.COM – Electricity Industry in the Public Sector in India .93 643623.12 111.QUICK RATIO Year Liquid Asset Annual Growth Rate Current Liabilities Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 230975.COM – Electricity Industry © M.29 0.76 325960.55 567491.57 123.26 0.33 0.02 680873.95 252500. which is also IDEAINDIA.17 0.94 438430. Net assets represent net fixed assets and net working capital. Liquidity is essential to meet the immediate liabilities and what can be observed is that the position is not positive in that case.18 0.09 621534. This also confirms an unhealthy trend in working capital position.17 133. However. then the quick ratio would be less than 1.22 0.89 518344.00 106.49 115.81 129.38 539686.IDEAINDIA. Sarngadharan 2009 75 Inventories are considered to be less liquid.17 589391.33 655145.10 124.29 0.18 0. if the liquid assets are less than the current liabilities. Table4.34 292424. the quick ratio of the Board was slightly better.84 115.18 0. since 2006-07.42 Source: Financial records of the Kerala State Electricity Board The commonly accepted value for quick ratio is 1: 1 and this need not be strictly followed in this capital intensive industrial unit as such.6 .01 0. Working capital is computed as the difference between current assts and current liabilities.97 669774. Although in the earlier years of the study.47 422352.13 0.35 0.94 271749.02 0.63 341822.22 0.04 206516.19 0. and then the financial position of the firm is viewed to be not sound.10 58.39 0.66 51.22 531791.45 101.27 0. the quick ratio reached a negative level.

71 39332. It is also noted that the favourable condition prevailed in the early years of this decade got reversed in recent years. This ratio measures a firm’s potential reservoir of funds.93 508406.16 0.57 34.IDEAINDIA.48 26.02 0.94 23. IDEAINDIA.90 27. that is.23 0.7 shows the changes in the ratio of the firm during the period of study TABLE 4.21 0.45 114026. Sarngadharan 2009 76 known as capital employed.04 0.05 -71.00 180753.12 152070.76 Source: Financial records of the Kerala State Electricity Board The firm is now operating in a negative direction.20 0.14 7.23 -81.19 0.46 91220.29 583113.59 29.57 646922.91 29.11 287647.01 30.04 -0.50 -215887.5 303632.COM – Electricity Industry in the Public Sector in India .19 433410.18 0. A high ratio implies a higher liquidity and vice versa.89 174367.9 0.59 544066.COM – Electricity Industry © M.58 284260. with a negative working capital.00 0.19 0.09 0.45 149909.31 0. It shows the absence of liquidity which indicates an unhealthy financial position for the Board.NET WORKING CAPITAL RATIO YEAR NET WORKING CAPITAL Annual Growth Rate CAPITAL EMPLOYE D Annual Growth Rate Ratio per cent 19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 20072008 Average 87664.10 5.11 _ -2.97 -230397.1 492860.7 .10 0. Table 4.52 343351.19 0.

profitability could a matter that needs wide debate. Generally. In this part of the study. This ratio also indicates the firm’s capacity to withstand adverse economic conditions.COM – Electricity Industry in the Public Sector in India . IDEAINDIA. Net profit ratio This ratio is determined by dividing the net profit after tax. together with the main objective of discharging social responsibilities. the profitability aspect is cited with a view to highlighting the need for expansion of investment byway of generating surplus.8 shows the changes in the net profit ratio of the Board in the decade under study. They are profitability in relation to revenue and the other in relation to investment. Generally. Profitability ratio is a measure of efficiency of operation of a business entity. A firm with a high net margin ratio would be in an advantageous position to survive in the face of falling sales prices. However. by the net revenue. or declining demand for the product. Sarngadharan 2009 77 Profitability Profitability is crucial for the sustainability of the firm. non-operating incomes are excluded while calculating this ratio.IDEAINDIA. It would really be difficult for a low net margin firm to withstand these adversities. Table 4.COM – Electricity Industry © M. it is interpreted that the firm fails to achieve satisfactory return on owner’s equity. rising cost of production. If the net margin is inadequate. Profit in this context is the difference between the total revenue and the total expenses over a period of time. two major types of profitability ratios are worked out. It is also called net margin. for a public utility like the Kerala State Electricity Board. irrespective of the fact whether it is oriented towards profit motive or service motive.

Operating profit ratio This ratio establishes the relation between operating profit and revenue.34 296922. It is also a measure of operating efficiency. IDEAINDIA.41 3.16 0.05 315887.17 0. and this seems to be low by any standard.49 428613.21 0.64 3.19 0.17 0. It is calculated by dividing operating profit by revenue.98 6283.05 3. Sarngadharan 2009 78 TABLE 4.00 0.17 3. in the latest years the trend was in the upward direction.20 0.COM – Electricity Industry in the Public Sector in India . Operating profit is equal to gross profit minus operating expenses.21 0.24 0.17 0. This could be attributed to the reduction in the interest charges on account of conversion of debt into equity.COM – Electricity Industry © M.21 123471.82 5. 8 . The average value was 3.09 3.IDEAINDIA.92 264569.28 493405.9 shows the changes in the net Operating profit ratio of the Kerala State Electricity Board in the period under study.65 21742.28 2.14 2.83 9182.19 0.NET PROFIT RATIO YEAR NET PROFIT Annual Growth Rate REVENUE Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 3875.14 181112.00 21742.17 0.50 10349.35 0.21 0.07 4.19 4412.13 3.50 199432. In fact.53 359011.70 5671.38.50 0.38 Source: Financial records of the Kerala State Electricity Board No serious changes were observed in the ratio over the period of study. Table 3.06 166924.15 3.15 0.39 10125.18 0.14 0.01 8077.

11 0. The ratios under review indicate that in the later part of the decade.19 0.16 0. and this can be regarded as fair working results for a public utility with the government ownership. The expense ratio is IDEAINDIA.50 0.2002.06 123471.11 18326.50 199432. it was comparably higher than in the recent years.49 428613.11 22.84 5.34 296922. It is worth mentioning that the compound growth rates for operating profit and revenue as 6 and 17 respectively.94 0.72 Source: Financial records of the Kerala State Electricity Board The Operating profit ratio of the Kerala State Electricity Board remained low in almost all the years except during 2000.05 315887.18 8.16 19.00. Though in general.46 6.28 493405.06 166924.26 21245.53 5.35 0. depict a fair result for public utility organization.45 18454.21 34611. It is computed by establishing relationship between material costs and revenue. Raw materials to revenue Another profitability ratio related to revenue is material expenses ratio.12 0. it can be stated that a high operating profit ratio is favourable. Sarngadharan 2009 79 TABLE 9 .18 0. a public utility like the Kerala State Electricity Board may have to go for a compromise to this general rule. The average came to 6.12 0.96 10276.10 5.17 0.28 7.17 0.70 15666.21 0.32 44928.16 5.14 181112.27 0.03 13965.70 0. A very high operating profit ratio can be even cited as undue exploitation of the consumers.COM – Electricity Industry in the Public Sector in India .17 7.21 0.COM – Electricity Industry © M.17 0.IDEAINDIA.53 359011.69 23261.92 264569.10 0.43 3.12 0.OPERATING PROFIT RATIO YEAR OPERATI NG PROFIT Annual Growth Rate REVENUE Annual Growth Rate RATIO 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 9204.

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closely related to the profit margin - gross as well as net. It shows the material cost relation to sales revenue. Table 4.10 shows the changes in the material expenses ratio of the Board in the decade under study
TABLE 4.10 - RAW METERIALS TO REVENUE RATIO RAW MATERIAL COST

YEAR

Annual Growth Rate

REVENUE

Annual Growth Rate

Ratio per cent

1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Average

60627.91 94056.77 157079.05 153615.58 203831.03 203080.89 154416.30 158522.11 174113.23 229704.60

0.55 0.61 0.36 0.35 0.27 0.17 0.15 0.14 0.16

123471.06 166924.14 181112.50 199432.92 264569.34 296922.05 315887.53
359011.49 428613.28 493405.50

0.35 0.21 0.17 0.21 0.19 0.17 0.16 0.17 0.17

49.10 56.35 86.73 77.03 77.04 68.40 48.88 44.16 40.62 46.55 59.49

Source: Financial records of the Kerala State Electricity Board

During the initial years under review, the ratio stood at a higher level compared to the recent years. This figure rose to a maximum of 86.73 per cent during 2000 -2001. The higher ratio was showing the impact of material cost in the profitability of the Board. The variations in rain- fall have had a serious effect on this ratio along with the diesel – hydro mix changes. However, the ratio has come down in the recent years indicating favourable sign. This is mainly on account of the gift of nature in the form of moderate rainfall. Wages to revenue This ratio presents the effect of wages in the profitability of the firm. As the manpower productivity in the power sector is a subject under severe criticism, the analysis of this ratio becomes more relevant.
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Table 3.11 shows the changes in the wage to revenue ratio of the Kerala State Electricity Board in the decade under the study
TABLE 11 - WAGES TO REVENUE RATIO

YEAR

WAGES COST

Annual Growth Rate

REVENUE

Annual Growth Rate

Ratio per cent

1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Average

41013.69 44364.51 50784.29 61500.28 67082.69 78831.31 74924.46 82192.25 85868.96 85966.16

0.08 0.11 0.14 0.13 0.14 0.11 0.10 0.10 0.09

123471.06 166924.14 181112.50 199432.92 264569.34 296922.05 315887.53
359011.49 428613.28 493405.50

0.35 0.21 0.17 0.21 0.19 0.17 0.16 0.17 0.17

33.22 26.58 28.04 30.84 25.36 26.55 23.72 22.89 20.03 17.42 25.46

Source: Financial records of the Kerala State Electricity Board

The wages to revenue ratio remained almost stable but in the latest years it reached a favourable level of around 15 -16 per cent. This is vital in the context of general impression that a large portion of the revenue generated by the Board is earmarked towards wages. Return on Assets Here, the profitability ratio is measured in terms of the relationship between net profits and assets. The return on assets may also be called profit to assets ratio. The concept of net profit means profit after taxes plus interest. Assets for the computation purpose are the total assets. The return on assets is a useful measure of the profitability of all financial resources invested in the firm’s assets

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Table 13 shows the variation of return on assets ratio for Kerala State Electricity Board for the last ten years.
TABLE 4.12 - RETURN ON ASSETS RATIO

YEAR

EARNING S Annual BEFORE Growth INTEREST Rate

TOTAL ASSET

Annual Growth Rate

Ratio per cent

1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Average

43526.46 53598.12 64703.62 71177.79 75356.62 81814.07 72809.35 61856.97 61163.31 54086.55

0.23 0.22 0.18 0.15 0.13 0.09 0.05 0.04 0.02

704319.50 809797.36 998952.50 1149827.07 1268492.86 1261300.15 1303000.43 1337682.31 1101046.03 1127734.22

0.15 0.19 0.18 0.16 0.12 0.11 0.10 0.06 0.05

6.62 6.48 6.19 5.94 6.49 5.59 4.62 5.56 4.80 5.81

Source: Financial records of the Kerala State Electricity Board

The ratio remained almost stable during the years under study with slight variations in the average value through out. Although financial analysts may argue that a firm should have sustainable profitability, the Board is expected to satisfy the social obligations of a public sector undertaking. Viewed from this angle, the values worked can be observed to be fairly acceptable. Return on capital employed The relationship between the profits and the total capital employed is considered to compute this ratio. The capital employed for this purpose includes working capital plus noncurrent assets. Thus, return on the capital employed provides a test of profitability in relation to the source of long-term funds. The observation is that a high ratio worked out is a sign of high efficiency in the use of capital augmented and the inefficiency if things move on the other way. The return on capital employed is worked out as net profit after taxes plus interest divided by total capital employed.
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Table 4.13 shows the changes in the return on capital employed ratio of the Board in the decade under review.
TABLE 4.13 - RETURN ON CAPITAL EMPLOYED RATIO

Annua YEAR EARNING S BEFORE INTEREST l Growth Rate CAPITAL EMPLOYED

Annua l Growt h Rate

Ratio per cent

19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 20072008
Average

43526.46 53598.12 64703.62 71177.79 75356.62 81814.07 74924.46 82192.25 85868.96 85966.16 0.23 0.22 0.18 0.15 0.13 0.09 0.10 0.09 0.08

287647.52 343351.19 433410.93 508406.29 583113.57 646922.10 492860.59 544066.58 284260.5 303632.9 0.19 0.23 0.21 0.19 0.18 0.09 0.10 0.00 0.01

15.13 15.61 14.93 14.00 12.92 12.65 15.20 15.11 30.21 28.31 17.41

Source: Financial records of the Kerala State Electricity Board

The ratio was the minimum at 12.65 during 2003 – 2004. The trend of change was found to be upward in recent years. This is mainly on account of the changes made in the capital structure through internal reconstruction. Efficiency ratio Efficiency ratios show the intensity with which a firm uses its assets in generating sales. These ratios indicate whether the firm’s investments in current and long-term assets are too small or too large. If the investment is too large, it could be interpreted
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that the funds tied up in those assets should be used for more productive purposes. If investment is too small, the firm may be providing poor service to customers or producing inferior products. Efficiency ratios, also called activity ratios, involve a relation-ship between the sales and the various assts and presume that there exists an appropriate balance between sales and the assets. A proper balance between sales and assets generally reflects that assets are managed well. Several activity ratios can be worked out to judge the effectiveness of asset utilization. Inventory turnover ratio The inventory or stock turnover indicates the efficiency of the firm’s inventory management. It is calculated by ascertaining the relationship between volume of sales and inventory. The inventory turnover ratio shows how rapidly the inventory is turned into receivables through sales. Generally, a high inventory turnover ratio is indicative of good inventory management and a low inventory turnover ratio suggests an poor inventory management. Table 4.14 shows the inventory turnover ratio of the Kerala State Electricity Board for the ten year period under study.
TABLE 4.14 - INVENTORY TURNOVER RATIO

YEAR

SALES

Annual Growth Rate

INVENTO RY

Annual Growth Rate

Ratio per cent

1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Average

123471.06 166924.14 181112.50 199432.92 264569.34 296922.05 315887.53
359011.49 428613.28 493405.50

0.35 0.21 0.17 0.21 0.19 0.17 0.16 0.17 0.17

63206.07 51296.74 53517.67 50814.85 49088.02 24830.67 26373.71 28233.25 30939.57 31681.60

-0.19 -0.08 -0.07 -0.06 -0.17 -0.14 -0.11 -0.09 -0.07

195.35 325.41 338.42 392.47 538.97 1195.79 1197.74 1271.59 1385.32 1557.39 839.84

Source: Financial records of the Kerala State Electricity Board

IDEAINDIA.COM – Electricity Industry in the Public Sector in India

18 0.84 509.12 116400.23 268.15 .43 282.28 493405. When a firm extends credit to its customers.84.78 141008.39.09 223. The value came to a minimum of 233 during 200-01.50 0. The first ratio is debtors’ turnover and is found out by dividing sales by debtors. This shows a progress in the effective handling of inventor.42 141645.COM – Electricity Industry © M.23 98629. The liquidity position of the firm depends to a greater extent on the quality of debtors.14 181112.92 96853. and this has gone to the level of 509 IDEAINDIA.83 130737.21 0.49 428613.16 0.73 250. Debtors are expected to be converted into cash in a short period and are.18 0.01 254.33 0.15 0.90 77446.85 260.25 255.17 0.17 0.80 0.10 233.COM – Electricity Industry in the Public Sector in India . Sarngadharan 2009 85 The ratio has been seen showing an increasing trend during the period under study.DEBTORS TURNOVER RATIO YEAR SALES Annual Growth Rate DEBTORS Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 123471.35 0. Debtors’ turnover and collection period A firm sells goods both on credit or on cash basis.05 315887.76 66743.19 0.17 0.34 296922.17 50042. Table 4. therefore. The average value is 839. included in current assets.IDEAINDIA.19 0.60 327.15 shows the changes in the debtors’ turnover ratio of the Board in the decade under study TABLE 4.24 0.50 199432.21 0.06 166924. It showed a continuously increasing trend and the final year showed a jump to a very high value of 1557. Financial analysts employ two ratios to judge the quality or liquidity of debtors.92 264569.08 246.13 0.91 Source: Financial records of the Kerala State Electricity Board The ratio was seen maintaining a more or less stable level with an average value.53 359011.16 0.67 76638. debtors are created in the firm’s accounts.

60 2. The figure is seen to be in a higher level. The average collection period should be compared against the firm’s credit term and policy to judge its credit and collection efficiency.02 0.94 153. Sarngadharan 2009 86 during 2007-08.28 71.03 -0.02 0. The short average collection period implies prompt payment by debtors.74 -0. This depicts a favourable trend.02 -0.01 -0. The average collection period ratio measures the quality of debtors since it indicates the rapidity or slowness of their collectability.28 5.71 134.02 0.02 -0.IDEAINDIA.50 2.23 2.00 -0. TABLE 4.COM – Electricity Industry © M.19 111. The shorter the average collection period.79 143.08 145.34 134.01 -0.09 0.16 . Table 4.94 138.55 2.01 0.34 2.08 Source: Financial records of the Kerala State Electricity Board IDEAINDIA.16 shows the changes in the average collection period ratio of the Board in the decade under study.91 143. the better is the quality of debtors.13 163.55 3.COM – Electricity Industry in the Public Sector in India .04 0.68 2.03 -0. Average collection period ratio It brings out the nature of the firm’s credit policy and the quality of the debtors in clear terms.03 0. The average collection period represents the average number of days for which the firm must wait after making the sale to the customers.02 0.47 2. This ratio is calculated as days in a year divided by debtors’ turnover.00 0.20 141.AVERAGE COLLECTION PERIOD YEAR RECIEVABLE S TURNOVER Annual Growth Rate AVERAGE COLLECTIO N PERIOD (DAYS) Annual Growth Rate 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 2.01 0.

16 0.COM – Electricity Industry © M. Fixed assets turnover ratio The fixed assets turnover ratio measures the efficiency with which a firm is utilising its investments in fixed assts such as land. plant and machinery.81 356335. Generally.50 0. while a low ratio indicates the position in the reverse order.65 478833.26 0.92 0.17 .19 0.50 199432.16 0.06 166924.00 519519. commendable. The trend is.49 428613.88 55.17 0.14 0.05 315887. that is.97 69.34 296922. Table 4.19 0.53 359011. a high fixed assets turnover ratio indicates efficient utilisation of fixed assets in generating revenue by increased volume of sales.21 63.97 71.88 504733. The average collection period for 2007-08 was 77days against the average collection period of 134 days for the ten year period under review.74 283501.17 0. the depreciated value of fixed assets. Sarngadharan 2009 87 The average collection period has come down to a considerable extent in the recent years under review. building.14 181112.16 Source: Financial records of the Kerala State Electricity Board IDEAINDIA.21 0.17 0. It also indicates the adequacy of sales in relation to the investment in fixed assts.17 shows the fixed assets turnover ratio of the Kerala State Electricity Board in the past ten years. TABLE 4.COM – Electricity Industry in the Public Sector in India .17 199983.61 514658. and furniture.20 0.FIXED ASSETS TURNOVER RATIO YEAR SALES Annual Growth Rate FIXED ASSETS Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 123471.69 65.74 66.21 0.06 252130.IDEAINDIA.28 94. of course.28 493405.73 63.13 0. The two times fixed assets turnover indicates that a rupee investment in fixed assets generates a sale of two rupees.35 0.13 83.11 61.18 0.92 264569.97 64.57 466168. The fixed assts turnover ratio is the relationship between sales and net fixed assts.40 408746.21 0.

19 0. the ratio is seen maintaining a more or less stable level with an average value of 25 per cent with certain random variations only.17 0.06 0.86 23. with an average value of 69 per cent.92 264569.34 20.24 26.16 0.14 181112. The firm’s ability to produce a large volume of sales on a small total asset base is an important part of the firm’s overall performance in terms of profit.22 0.15 0. Sarngadharan 2009 88 The ratio was seen maintaining a more or less stable level.61 18.43 1337682.18-TOTAL ASSET TURNOVER RATIO(1995 .COM – Electricity Industry in the Public Sector in India .34 296922.10 0. The firm must manage its total assets efficiently and should be able to generate maximum sales through their proper utilisation.86 1261300.2004) YEAR SALES Annual Growth Rate TOTAL ASSET Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 123471.16 0. there has been an improvement.84 38.15 1303000.17 0.50 0.17 0.21 0. The value came to a higher IDEAINDIA.19 0.05 17. The total assets turnover ratio is calculated by considering volume of sales and the total assets. It is a significant ratio. since it shows the firm’s ability of generating sales from all the financial resources committed to the firm.50 809797.36 998952.11 0.31 1101046. As this ratio increases.54 24.93 43.18 0.07 1268492.28 493405. in the recent years.IDEAINDIA.53 20. Table 4.03 1127734. TABLE 4.75 25.12 0. Total assets turnover ratio Although the fixed assets are directly concerned with the generation of revenue through sales.17 704319. the role of other assets in contributing towards sales also needs attention.COM – Electricity Industry © M.18 Source: Financial records of the Kerala State Electricity Board Here also.49 428613. However.53 359011.18 shows the changes in the total assets turnover ratio of the Board. The total assets turnover ratio indicates the sales generated per rupee of investment in total assets.50 1149827.21 0.05 315887.35 0. there is more revenue generated per rupee of the total investment in assets.50 199432.06 166924.13 17.

the capital employed turnover ratio indicates the firm’s ability of generating sales per rupee of long-term investment.IDEAINDIA. and this seems to be an encouraging aspect. Higher capital employed turnover ratio indicates effective utilisation of the pooled funds. This can also be a sign of the favourable results on the corrective steps initiated by the management recently. the capital employed turnover ratio can be calculated by matching the volume of sales and the capital employed.COM – Electricity Industry in the Public Sector in India . Table 4.COM – Electricity Industry © M. Like the fixed assets and total assets turnover ratios.19 shows the changes in the capital employed turnover ratio of the Kerala State Electricity Board during the period under study IDEAINDIA. Sarngadharan 2009 89 level during 2006-07 and 2007-08. Capital employed turnover ratio In order to examine the effectiveness in utilising the capital employed.

IDEAINDIA.62 41. The upward trend during the last two years needs special attention in the context of favourable results in other turnover ratios anlaysed earlier in this study report.34 296922.01 42.29 583113.21 0.50 70.59 544066.COM – Electricity Industry © M.92 264569.10 492860.78 162.21 0.09 65.21 0.19 0.79 39.90 64.37 45.92 48.17 0.19-CAPITAL EMPLOYED TURNOVER RATIO YEAR SALES Annual Growth Rate CAPITAL EMPLOYED Annual Growth Rate Ratio per cent 19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 20072008 Average 123471.50 199432.50 287647.10 0.06 166924.18 0.49 428613.93 508406.05 315887. Current assets turnover ratio The Current assets turnover ratio measures the efficiency of a firm in managing and utilising its current assets.57 646922.5 303632. The current assets turnover ratio is calculated by establishing relationship between sales and current assets.17 0.35 0.19 433410. The higher the current assets turnover ratio.19 0. the more efficient is the management and utilisation of current IDEAINDIA.99 150.14 181112.52 0.53 359011.58 284260.17 343351. Sarngadharan 2009 90 TABLE 4.19 0.9 0.72 Source: Financial records of the Kerala State Electricity Board The ratio shows an upward trend and this is a healthy sign.16 0.COM – Electricity Industry in the Public Sector in India .09 0.23 0.28 493405.17 0.00 0.23 45.

34 296922.06 33.35 Source: Financial records of the Kerala State Electricity Board Here also.41 343721.21 0.19 301394.78 692711.97 48.16 0. Sarngadharan 2009 91 assets.77 38. The experts observed that main reason for the financial problems was the higher incidence of interest payable remained till recently.14 181112.2 373504 0.03 41.17 294181.05 590501.10 107.19 0. it is not a healthy trend. as per the financial experts’ opinion.21 475870. Evidently.15 -0.07 646365.53 359011.50 0. The analysis also confirms this. The proportion of debt could not be reduced because of the same reason as above. The efforts have IDEAINDIA.20 shows the Current assets turnover ratio of the Board in the ten year period under review TABLE 4. which was an indication of flaws in management.18 0.20-CURRENT ASSET TURNOVER RATIO YEAR SALES Annual Growth Rate CURRENT ASSET Annual Growth Rate Ratio per cent 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Average 123471.21 132.COM – Electricity Industry in the Public Sector in India .26 0.28 493405.56 38.7 70910. Experts in the Kerala State Electricity Board opined that during the recent years a good portion of the new borrowings could not be invested in assets because of revenue deficit. Table 4.00 0.05 315887.35 506. The reversal of the direction of change significantly is encouraging.17 0.00 681518.06 166924.50 199432. The analysis agrees with this.17 0.29 142.35 0.27 0.17 0. Now the top management is seriously trying to adapt the refinancing options. The results on the other way make things in the reversible order in respect of the utilisation of available resources.IDEAINDIA. the values not only remained low but also showed a decreasing trend till 2004-05.24 0.49 428613.17 0.21 0.COM – Electricity Industry © M.94 46.19 45. by conversion of Government debt into equity.17 0. Debt equity ratio made a sudden change in 1998 and subsequently in 2006.92 264569.

However. The top managers opined that the tariff was determined in the recent years more with a social commitment than with the intention to maintain return on assets. The tariff cannot be increased in line with the general price line increases or in line with the inflation. But.IDEAINDIA. It is worth mentioning that the collection efficiency has improved much during the recent years as depicted by the respective ratios. the efforts of top management have brought about considerable reduction towards labour and other expense. Thus. Better quick ratio after the debtequity conversion exercise also was found to be in line with this observation. virtually lower turnover ratios viewed in the process of computation can not be IDEAINDIA. the higher incidence of defaulters of Government-owned firms and organisation makes the position far from satisfactory. the Board has been generating surplus. it remains a fact that this position is achieved with the receivables from the State Government. The contention of the managers that there are recent efforts to control inventory corroborates with the figures of the inventory turnover ratio. Again. Sarngadharan 2009 92 started to gain favourable results as was observed in the interest coverage ratio. But. This has created difficulties of varied nature.COM – Electricity Industry in the Public Sector in India . claimed that the Board was prompt in debt servicing and this has paved way for creating a healthy creditworthiness. The mangers in the top level and middle level indicated huge escalation in the cost of materials including fuel coupled with the inability to increase the tariff for social reasons.COM – Electricity Industry © M. The profitability of the Board is a matter of controversy. Thus. ensuring better productivity. the managers claimed better cash position in the recent years. The financial managers of the Board. while holding discussions. help them to be prompt in making payments on time. whether the figures revealed by the books of accounts is real profit or not is a matter that requires probe from a different perspective. The data analysed in the raw materials to revenue ratio and wages to revenue ratio support this finding. The Government has agreed to make good any shortage of profit from the stipulated per cent. The return on capital employed ratio deserves analysis and interpretation from this perspective. The debtors’ turnover ratio would have been much better if this issue is resolved. The current ratios support also this claim. As per records.

It is against this backdrop. The analysis of the mobilization and utilisation of funds with the help of secondary data leads to the conclusion that the Board is backed by sufficient funds in the form of equity capital as well as long term borrowings. employees of the Board and experts in the electricity industry.IDEAINDIA. Sarngadharan 2009 93 cited need not be cited as serious drawback. IDEAINDIA.COM – Electricity Industry © M. . an attempt was made in the present study to evaluate the performance of the Board further with the data generated from different categories of consumers.COM – Electricity Industry in the Public Sector in India .

In the context of modern management..are detailed in the current and subsequent chapters. of course. the minimum has to be a fairly large size.COM – Electricity Industry in the Public Sector in India . etc. There is. electrical network. Size of the Organization The size of an organization has a strong impact on its performance in achieving its main objective of accomplishing the common goals. On the other hand. an organisation may be defined as a composite entity of a number of independent and interacting sub-systems within it (Moshal. expenditure and revenue.IDEAINDIA. plant and machinery. for the Kerala State Electricity Board. offices and so on. The organization under the present consideration is the Kerala State Electricity Board with all its employees. size cannot go beyond certain limits to maintain its manageability. employees and experts on selected variables in relation to the performance of the KSEB. IDEAINDIA. one from the point of view of consumers and the other from the point of view of employees and experts . Size can mean the volume of operation. 1998). But. recently there came up strong recommendations from various quarters about restructuring the organisation into smaller entities in profit centers and areas concept. The results of such an effort based on a two dimensional analysis .COM – Electricity Industry © M. The minimum size of a firm varies from one line of business to another. Sarngadharan 2009 94 Chapter 5 ORGANISATIONAL PATTERN OF KSEB An organization is a planned system of individuals. The extent of spread geographically.that is. Generally. the number of persons employed the area of works. In the case of public sector organizations. in any or all aspects relevant in its productive function. a minimum size for utility type organisation. productive in nature. The present study has attempted to ascertain and analyse the views of consumers. the volume of capital employed. management. an organisation refers to a group or an association or an institution of individuals working in a pre-structured manner for achieving predetermined common goals. below which it is not economical to operate. are among the aspects referred above. deliberately designed and cautiously coordinated for achieving common goals efficiently.

number of officers and employees.6 3. Sarngadharan 2009 95 Thus.64 3.COM – Electricity Industry © M.3 42 38 34 24 38 35.43 3.202 0.451 sig Not Sig Not Not Sig Not Not Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field survey 16. The statistical test also reveals that the similarity in the views of various categories of consumers except commercial and public water works do not vary significantly. to include the geographical area of operation. The term size is used here in the normal sense. a general opinion on the size of an organisation has a big relevance in understanding the perspective of stakeholders on the organization.456 0.6 40 33 14 12 8 4 4 6 4.76 3. Table 5.62 A good number of the consumers rated the size of the organisation to be either high or very high (52.8 38.Views on the size of the organization -Views of consumers responseNo Very High Very Low Category Normal Mean Total High Low |t| 0.7 28 32 40 44 38 40 40 36.094 2.222 1.61 3. A few of the respondents viewed it as normal (33percent) and only a negligible number of them found it low or very low.1.143 2. Even without examining the micro effects of the various parameters.4 percent).1.57 3. IDEAINDIA. with regard to the manageability of the organization.2 0 0 0 0 0 0 0 0 0 5. that is.8 3. Size will have an optimum measure for each specific organisation.96 3.4 0 9.COM – Electricity Industry in the Public Sector in India .7 12 14 10 28 12 20 20 15. quantity of electricity generated and handled.IDEAINDIA.4 100 100 100 100 100 100 100 100 100 3.72 0. The data on the survey are given in Table 5.6 25. now it is time to critically look into the ‘size’ of the organisation. The question on size was included in the questionnaire to extract this information. The effect of size in the performance of an organization is multi-pronged.3 6 8 12 0 6 0 0 5.014 0.

formulates its policies and directs the company’s affairs. and Chabra.5 55 24 5 19. The statistical test also confirms that similarities in the views of all categories are significant.IDEAINDIA. one in Engineering and the third in Finance matters.25 The employees and experts recorded the very strong view that the size of the Kerala State Electricity Board was high.5 20 22 40 26.4 0 0 0 0 0 0 0 10 0 2 100 100 100 100 100 4. B. Other opinions were expressed by a relatively very small number of them.6 3.Views on Size of the Organisation . There is no prescribed IDEAINDIA. Cross examination of the views of consumers.COM – Electricity Industry © M. The Indian Electricity Act 1948 clearly lays down the composition of the Board of Directors of the Kerala State Electricity Board.P.66 6.82 4.5 4. Out of these members. It is essentially a policy-making and controlling body.2.6 7. The Board of Directors exercises the powers of the company. It consists of elected representatives of the shareholders. three should have prescribed qualifications. One member shall be experienced and proficient in Administration. Composition of the Board of Directors The Board of Directors represents the top management of the company.73 2. Sarngadharan 2009 96 Table5. It delegates to its powers of day to day management of the company to its chief executive (Singh.7 3.8 percent).Employees and Experts No response Very High Very Low Categor Normal Mean Total High Low |t| 5. an organ of review and appraisal rather than of action. employees and experts leads to the conclusion that the size of the organisation was high. There shall be a minimum of three and a maximum of seven members appointed by the state government in the Board. They exercise their power collectively at the board-meeting. The members of the board of Directors have no authority as individuals. T.8 0 0 12 0 2.41 4.2 25.N.9 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 67 25 32 55 49.COM – Electricity Industry in the Public Sector in India sig Sig Sig Sig Sig . A good majority of them saw it to be either high or very high (75. 1997). The statistical test also confirmed that there is no significant variation in the opinion of the two groups (Z test).

the prescribed qualifications are very vague for very responsible positions in a public sector organization like the Kerala State Electricity Board. Here.55 0.34 3.6 per cent of the consumers considered the composition of the Board of Directors of the organisation to be excellent or good whereas 34.14 3.7 60 22. Table5.42 3.3 and 5. The structure of the existing Board of Directors of the Kerala State Electricity Board and certain relative aspects have been dealt with in detail in this report elsewhere.Views on Composition of Board of Directors .95 2. Any one of the three qualified members can be appointed as the Chairman of the State Electricity Board. Hence.4 0 8 10.8 10.14 1. Secondly the government has shown a unique sense of responsibility by appointing more qualified members than the prescribed number that is.48 3.36 It may be noted that 41.Consumers No response Very poor Category Excellent Normal Mean Good Total Poor |t| 0.6 20 10.2 24 21 12 22 22 24 26.4 20 34.69 0. two aspects can be observed.3 19 16 14 24 16 28.COM – Electricity Industry in the Public Sector in India .48 2.4 3.4 depict the findings of the survey on the composition of this governing body.8 percent of them found it to be normal. six in place of three.IDEAINDIA.68 0.35 1.3.COM – Electricity Industry © M.36 0. IDEAINDIA. Sarngadharan 2009 97 qualification for other members.7 8 0 4 0 0 0 0 5. Tables 5.3 5 18 0 12 14 4.2 100 100 100 100 100 100 100 100 100 3.4 28 42 38 56 30 32 24. it is evident that any comment on the present structure of the Board of Directors is to be made very carefully.9 0 19.7 5 16 4 12 14 15.6 3.4 7. Only a negligible portion of them found to be either poor or very poor.07 sig Not Not Sig Not Not Not Not Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field survey 19. First.92 3. limiting the unqualified member to one.

94 5 1. This line of thought was strongly endorsed during the initial periods of independent India. when a new industrial policy leading to what is now well known as ‘Globalisation efforts’ started.09 6 3. providing vital infrastructure to the society.Views on Composition of Board of Directors .8 14 10 12 20 14 8.IDEAINDIA. backward and rural areas.21 1 Technical Employees Administrative employees Other Employees Experts Total Source: Field Survey 60 52 42 45 51. the electricity industry in the country has been brought into the public sector.8 17. All the categories of respondents put forth a more or less similar opinion. balanced regional development. Only a small number of them found it poor. Level of Government Control By virtue of the Indian Electricity Act 1948.9 4 3.4. As such.68 0 1.COM – Electricity Industry in the Public Sector in India sig . considering the importance of balanced growth of electrical systems to remote. It continued so until 1991.2 9 3.COM – Electricity Industry © M. The rationale behind bringing this industry into the public sector was mainly that of acknowledging electricity as the most essential and vital infrastructure for the country’s economic growth. The statistical test revealed similarity in the views of technical and other employees significant. Electricity Boards were formed to be controlled fully by the respective governments.2 1 4.4 100 100 100 100 100 4. Z test confirmed the similarity in opinion of the two groups of respondents. Sarngadharan 2009 98 Table 5.0 7 Sig Not Sig Not The employees and experts recorded a strong opinion in favour of the good composition of the Board of Directors.5 18 18 2 11 0 4 11 0 3 0 0 2 0 0.Employees And Experts No response Very poor Category Excellent Normal Mean Good Total Poor |t| 2.5 16 15 33 19. A good majority of them found it to be excellent or good.6 0 4. IDEAINDIA. In spite of the evident advantages of government control like planned economic development.

It involves the control mechanism involving the officials of the government known as bureaucrats. criticisms started popping up gradually from different sectors against government control over industries.Views on Level of Government Control ..Bureau of Public Enterprises). tariff can not be formulated on commercial lines. Another line of control is informal. Sarngadharan 2009 99 sound industrial base.3 19 18 42 30 40 44 32 28.76 9 sig Sig Not Not Sig Domestic Commercial Public lighting Agriculture 8 12 6 10 9.04 3 1. The respondents were made to record their views on the level of government control over the Kerala State Electricity Board. Thus excessive government control can dampen the functioning of an industry. The term ‘government’ in ‘government control’ has a wide meaning in this context.6 0 3.99 9 1. helpful approaches to weaker sections. discipline cannot be enforced because of the undue influence of the trade unions of ruling political parties. Absence of profit motive. Table5. non-exploitation of consumers.COM – Electricity Industry © M.5 and 5. one from the political leadership and the political organizations.70 5 2. contribution to the exchequer.6. etc. and the specially formed mechanisms by the government (Example.3 1 0 10 100 100 100 100 2. Government control can bring out many advantages including those described above. can also be expected.IDEAINDIA. this informal control has taken an unquestionable role. On the other hand excessive government control can kill the sense of commercial operations of industries. The results of the survey are shown in Tables 5. The losses will increase.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 5. employment to all sections. 7 18 24 6 17 10 8 0 7.6 2 IDEAINDIA.5. the well-framed control from legislature through legislative bodies (ExamplePublic Undertaking Committee). With the increased interest of the political parties in the conduct of public sector organizations.9 0 3. etc.COM – Electricity Industry in the Public Sector in India . etc.0 5 2.

98 4 0. The statistical test reveals that.4 20 16. The analysis of the data reveals different categories of respondents have similar opinion that the level of government control is on the higher side. Sarngadharan 2009 100 Public Water Works Industrial LT Industrial HT Others Total Source: Field Survey 22 10 26.31 3 2. 6 0 0 0 0 7. Almost an equal number of them found it to be normal. 6 100 100 100 100 10 0 4. A few of them saw it to be normal and only a negligibly small number of them rated it to be low or very low. 7 0 12 44 38 33. 3 40 24.5 6 3.06 8 Sig Sig Sig Not The majority of the consumers saw the level of government control over the Kerala State Electricity Board to be either high or very high.6 40 35.8 4 3. public lighting and others.019 Technical Employees Administrative employees Other Employees Experts Total Source: Field Survey 71 29 25 62 51.77 3.5 19 21 30 24.COM – Electricity Industry in the Public Sector in India sig .883 3. Z test also confirmed the similarity in opinion of the two groups of respondents.1 7 4.5 52 24 8 18.Employees and Experts responseNo Very high Category Very low Normal Mean Total High Low |t| 6.429 5. similarities in the views of all categories are significant. It is attempted in the present study to assess the working result and financial position of the KSEB together with an analysis of the performance from the point of view of the stakeholders.6.27 Sig Sig Sig Sig A good majority of the employees and experts saw the level of government control to be either high or very high (75. 2 0 0 17 0 3. Table 5. commercial.8 percent).8 100 100 100 100 100 3.2 0 3. IDEAINDIA.690 6.IDEAINDIA. 2 3.8 0 4 0 0 3. Statistical test also revealed no significant variation in the similarity of opinion of three categories of consumers namely.54 4.Views on Level of Government Control .68 3. 4 0 0 0 0 0 0 0 13 0 2.6 4 4 4.COM – Electricity Industry © M.8 2 3.62 4.48 5 3. 2 30 44 35.6 25.

COM – Electricity Industry © M. Changes. and the Board of Directors. methods and procedures. changes in government or even a change of the Minister holding the portfolio of power can cause changes in the Board of Directors.COM – Electricity Industry in the Public Sector in India . size of the organization. The results of the survey are tabulated in Tables 5. It is the ultimate source of authority which establishes goals and policies for the enterprise. The top management of the Kerala State Electricity Board includes the Chairman. have the advantages of innovative thinking and avoiding building up of vested interest. In addition to the Chairman.7. on the other hand. Top management issues orders and instructions and lays down guidelines for executives at the middle and lower levels. Table5.7 and 5. It has to function as representative and spokesman of the organization in its relationship with the outside world. and to ensure efficient functioning.Consumers IDEAINDIA.8. financial and administrative experts along with representatives of government and other members.The respondents were asked to express their views on the frequency of change in top management. society and the government for smooth functioning and better results. board of directors etc. It’s most important function is maintaining a cordial relation between share-holders. etc. It is accountable to the owners of the business for the overall management. In Kerala’s situations. Sarngadharan 2009 101 Frequency of Changes Made in Top Management The top management of an organization is that level of management which is responsible for the total performance of the entire organization. They are responsible for the policy decisions such as purpose. Normally. As such.IDEAINDIA. Thus. to accomplish the objectives successfully according to the scheduled plan. The Board being in the pivotal position of the organization.Views On Frequency of Change Made in Top Management . the decision on the members of the Board is left to the party of the Minister for Power or the Minister himself. as stipulated by the relevant laws. the board consists of technical. changes in the top management can seriously affect the continuous functioning of the organization. it includes the president or chairman. to evaluate this aspect. periodicity of changes should be apt to be advantageous to the organization. planning objectives. They give the leadership and orientation for the organization. man power policies. It takes decisions about the enterprise to establish smooth relationship among the entire work force. workers. The selection is made solely at the discretion of the State Government. controlling procedures.

8 100 100 100 100 100 4.1 0 15.COM – Electricity Industry in the Public Sector in India sig sig .6 1 4 0 0 1. Z test also confirmed similarity in opinion. Only a very small number of them found it to be low or very low. production. research and development.47 4.4 percent). Sarngadharan 2009 102 responseNo Very high Category Very low Normal Mean Total High Low |t| 6.834 1.29 3.086 2.523 3.2 14 5 0 0 0 0 0 0 0 8 2 0 12 0 4 0 0 5.332 6.253 3. Scientific Placement of Functional Heads A large sized industrial or business organization will be segmented into different departments on a functional basis.COM – Electricity Industry © M.68 4.96 3.457 2.3 13 4 8 14 8 8.IDEAINDIA.9 0 9.8 percent).8 9.74 3.2 0 1 13 0 2.263 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field Survey 10 14 34 22 30 24 31.64 4.33 Sig Not Sig Sig The employees and experts recorded a strong opinion on the question.9 60 36. A few of them found it to be normal.6 31. Both the groups of respondents had similar opinions on this aspect.3 12 32 24 28 26 28.4 100 100 100 100 100 100 100 100 100 2. Thus the frequency of change in top management can be concluded to be high in the Kerala State Electricity Board. human IDEAINDIA.82 3. Table5.3 54 30 34 28 38 31.8.68 3.5 5 17 0 6.8 4.050 0.69 3.6 5.Views on Frequency of Change Made in Top Management. such as finance.1 40 33 27.819 0.5 6 18 5 7.964 2.5 |t| 2.Employees and Experts responseNo Very high Category Very low Normal Mean Total High Low Technical Employees Administrative employees Other Employees Experts Total Source: Field Survey 65 57 24 69 56 24 27 28 26 25. Only a negligible number of them viewed otherwise.72 3.35 Sig Not Sig Not Sig Sig Sig Not A large number of the consumers observed the change in the top management to be too frequent (52.548 1.17 3. A good majority found the change in top management to be too frequent (81.6 3.

proximity to market. Functional segregation is made in order bring about advantages of specialization. etc. easier scrutiny of functional performance. Thus. in a public sector undertaking like the Kerala State Electricity Board. But. in the organisation. transport facilities. the question on where the functional heads are to be situated poses a unique management problem. based on a number of factors.IDEAINDIA. the function of construction may be at various locations.9.Consumers IDEAINDIA. its location does not pose a problem. fixing of specific responsibilities. accommodation and recreational facilities for staff. power and fuel. a scientific approach may be necessary in deciding the location where the heads of the departments are to function. increase in operating efficiency through grouping of similar activities. For example. The transmission head has to lead all the works and maintenance of the whole transmission network throughout the state. other infrastructure like banking. Hence. are some of the considerations. delegation of more powers to departmental heads. various parameters involved are to be considered and analyzed. In deciding the location. Hence. Sarngadharan 2009 103 resources management. 1998). The location of the departments will have to be decided. labour supply.COM – Electricity Industry © M. Facilities for transportation and communication. etc. Most of the functions are spread all over the state. and easier budgetary control (Ramaswamy. regional and so many other considerations. The respondents’ views on this aspect were collected through a questionnaire. etc. The scientific principles in finding the location are to be made applicable. For example a plant to perform production function will have a location considering availability of raw materials. For a centralized organization. For example. hydro-electric generating stations have to be located only near hydro-potential areas. Table 5. Each of the above functions may or may not be concentrated in a single location. T. facilities for housing office and staff. the decisions on such aspects are not done strictly by thinking on a scientific basis because of political.Views on Scientific Placement of Functional Heads . In electricity. the functional head of finance has to manage and oversee the financial transactions and performance throughout the State.COM – Electricity Industry in the Public Sector in India . all the functional departments are not situated or concentrated at the headquarters. The functional departments are headed and managed by specialists on the particular function.

77 3. the opinions on the aspect are found to differ widely among the respondents. However.6 60 16 15 11 22 8 12 16 11 0 13 22 9 0 24 0 4 0 0 11.74 Not Not Not Not The majority of the employees and experts found the placement of the functional heads to be unscientific. as the opinions of the employees and experts are found to swing considerably.2 100 100 100 100 100 100 100 100 100 2.77 2.6 25 24 24 17 23 0 0 2 0 0. in scientific evaluation. that is.554 1.266 0.674 0.02 2.77 2.426 0. 9.5 31 26 30 30.71 2. IDEAINDIA.4 100 100 100 100 100 2.73 2.COM – Electricity Industry in the Public Sector in India sig sig . Those who found it otherwise were also not small in number.4 2.666 0. The statistical test reveals that the views of various categories do not vary significantly. they found it to be either poor or very poor.4 31 30 29 34 31 11. Sarngadharan 2009 104 responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 0.4 40 40.5 12 14 19 13. Table 5. Only a small portion of them found it to be otherwise in both the sides namely good or poor.266 Domestic 8 Commercial 11 Public lighting 12 Agriculture 4 Public Water Works 14 Industrial LT 4 Industrial HT 4. The statistical test also reveals that the similarity in the views of various categories of consumers do not vary significantly.Employees and Experts responseNo Very poor Category Excellent Normal Mean Good Total Poor Technical Employees 0 Administrative employees 3 Other Employees 5 Experts 0 Total 1.76 2.119 0.4 0 10.4 Source: Field survey . it may be concluded that the placement of functional heads was not scientific.83 Not Not Not Not Not Not Not Not The majority of the consumers found the placement of functional heads to be normal.Views on Scientific Placement of Functional Heads. Z test also confirms the variation of opinion between the two groups.6 32 43 42 42 30 46 64.3 14 8 6 22 10 4.349 1.853 |t| 0.4 14 12 16 16 22 20 15.349 1.IDEAINDIA. Thus.036 0.6 Source : Field Survey 32.65 2.4 Others 0 Total 8.76 3.72 2.COM – Electricity Industry © M.10.04 2.351 0.

COM – Electricity Industry in the Public Sector in India . Theo Haimann sees it as a ‘process by which an executive imaginatively directs. By professionalism in leadership it is meant the imparting of the required scientific knowledge and developing skill and competence through formal education.and traditional belief with well tested and scientifically formulated methods and procedures is the main feature of professional leadership. A comprehensive definition given by Cole. Professionalism in a firm aims at essentially striking the right balance between the needs of people and the organisational goals in a given situation. Professionalism of Leadership Effective and efficient leadership is one of the basic requirements of an organisation. it can be concluded that the functional heads of the Electricity Board were not placed scientifically. training and development to the prospective managers.COM – Electricity Industry © M.A is that ‘Leadership at work is a dynamic process whereby one individual in a group is not only responsible for the group’s results. no evidence of any scientific study in deciding the head quarters of the functional heads could be seen during the survey and discussions. When scientific training and systematic skill building is utilised to make the leadership qualities perfect it is professionalism. inductions. Thus. leadership is the attribute that enables the management to lead the organization to its goals (Cole.A. professional managers started occupying their positions. accepting the majority opinion from the employees and experts. G. the traditional leadership cannot function well. It aims at calculated outcomes instead of leaving to chances. G.IDEAINDIA. Replacing the natural leadership traits. Specific training for providing the leadership requirement is the chief element here. In a very large and complex organization like the Kerala State Electricity Board. rule of thumb. the question was on an aspect not easily understood by the consumers and hence their opinions need not be given undue importance. Because of the increased complex requirement of leadership in modern industrial world. Sarngadharan 2009 105 Here. Also. It is a psychological process of influencing followers or subordinates ad providing guidance to them. 2004). guides and influences the work of others in choosing and attaining specified goals by mediating between the individuals and the organisation in such a manner that both will obtain maximum satisfaction’. In business management. Professional leadership is necessary to take the IDEAINDIA. but actively seeks the collaboration and commitment of all the group members in achieving group goals in a particular context and against the background of a particular national culture’.

12. on the professionalism of leadership of the organization.11 & 5.The respondents who had a chance to view the leadership closely were posed with a question. IDEAINDIA.COM – Electricity Industry in the Public Sector in India . The results of the enquiry are given in Tables 5.COM – Electricity Industry © M. Sarngadharan 2009 106 organization through the modern world of competition and increased consumer awareness.IDEAINDIA. Now the firm has to work in a very competitive environment created through the liberalisation polices and the reforms in power sector.

COM – Electricity Industry in the Public Sector in India .75 4 1.3 24 20 24 40 30 33.014 |t| 0.12. Sarngadharan 2009 107 Table 5.2 16.73 4.Employees and Experts responseNo Very poor Category Excellent Normal Mean 3.00 3.3 8 10 0 0 4 0 0 4.954 0.404 0.721 1.Consumers No response Category Excellent Normal Mean Good Total Very poor Poor |t| 1.IDEAINDIA. 8 35 34 24 24 30.2 9 3.4 8 3. 4 8 7 5 15 8. Table 5.3 2 Good Total 10 0 10 0 10 0 10 0 10 0 Poor 16 15 15 19 16. 2 Technical Employees Administrative employees Other Employees Experts Total Source: Field Survey 20 26 23 20 21.4 100 100 100 100 100 100 100 100 100 3.Views on Professionalism in Leadership . 6 0 0 11 0 2.6 percent).51 6 sig Not Not Not Sig Not Not Not Not Not Not Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field Survey 16 22 30 28 18 24 20 20 21.186 0. The statistical test also shows that the similarity in the views of various categories of consumers.11.7 24 18 8 12 10 6. against small number of them with difference of IDEAINDIA.501 1. Only a minimum number of them regarded it to be either poor or very poor. except the agriculture consumers do not vary significantly.47 A large number of the consumers viewed the professionalism of leadership in Kerala State Electricity Board to be excellent or good (46.4 1 3. 2 Majority of the employees and experts also agreed that professionalism in the Kerala State Electricity Board was excellent or good.7 0 15.27 1 1.6 20 2 0 14 0 6 0 0 8.7 20 22 26 30 26 40 60 25.Views on Professionalism in Leadership .24 3.1 3 3.248 1.34 3.60 3.44 3.54 3. 8 21 18 22 22 20.30 9 0.206 2.2 5.2 22.COM – Electricity Industry © M. A few of them found it to be normal.4 19.86 3.3 20 25.

They give the leadership and orientation for the organization. The personnel specification is a summary of the knowledge. Its function of prime importance is maintaining a cordial relation between the various stakeholders of the industry.COM – Electricity Industry in the Public Sector in India .IDEAINDIA. Its structure and other aspects have been detailed elsewhere. in selecting the members of the Board of Directors. and controlling procedures.. A more detailed discussion on top management is given in earlier paragraphs of this chapter. it can be concluded that professionalism in leadership is in a satisfactory level in the organisation. They take decisions about the enterprise to establish smooth relationship among the entire work force. The first and foremost step in the selection of personnel to at any level is a clear and unambiguous statement of personnel specification. man power policies. From the above mentioned views. skills and personal characteristics required of the position holder to carry out the duties and responsibilities to an acceptable standard of performance . to accomplish the objectives successfully according to the scheduled plan and to ensure efficient functioning. etc. expertise in functions like finance. planning objectives. administrative experience. This is an extremely important feature of the selection process because it sets down a standard by which the personnel can be selected. A comprehensive selection process involving selection of a panel. etc is not known to be prevalent for the selection of the Board of IDEAINDIA. The top management of the Kerala State Electricity Board is a seven-member Board of Directors. Sarngadharan 2009 108 opinions. share holders. They are responsible for the policy decisions such as purpose. which is accountable to the owners of the business for its performance. society and the government for trouble-free functioning and better result. due consideration has to be given to factors like technical expertise. methods and procedures. namely. Extraneous Consideration in Induction of Management Top management is the ultimate source of authority which establishes goals and policies for the enterprise. Z test also shows there is no significant variation in the views of the two categories.COM – Electricity Industry © M. But in the case of the Kerala State Electricity Board the requirements laid down are very vague like ‘experienced administrator’. size of the organization. workers. Top management in an organization is that level of management which is responsible for the total performance of the entire organization. In a highly technical and complex public sector organization like the Kerala State Electricity Board.

COM – Electricity Industry © M.Views on Extraneous Consideration in Induction of Top Management .14-Views on Extraneous Consideration in Induction of Management .22 7 |t| 1.COM – Electricity Industry in the Public Sector in India sig sig . Sarngadharan 2009 109 Directors. A few of them rated the aspect to be normal but those who saw no extraneous considerations were a negligible number.18 6 2.2 2 Sig Not Not Not Not Sig Sig Not A good majority of the consumers (78.69 Not IDEAINDIA.1 8 3.4 100 100 100 100 100 100 100 100 100 4.4 1 4.53 6 0.1 4 4.2 4 4. Table 5.38 4 2.4 percent) found extraneous considerations in induction of management in the Kerala State Electricity Board to be high or very high.13.29 8 0.462 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 43. 8 42.5 0 0 0 100 4. A question was put to the respondents of the survey to ascertain the extent of extraneous consideration in the selection of the top management.8 0 4.2 8 4.9 8 3.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 2.5 2.12 9 1.9 8 3. 7 41 44 40 30 26 31. 6 6 6 14 18 26 36 35. 3 0 39. regional and/ or communal considerations are likely to come up in the peculiar situations of Kerala.81 2 0. 3 44 42 30 44 34 33.Employees And Experts No response Very High Very Low Category Normal Mean Total High Low Technical Employees 71 26.6 20 15.8 0 7 0 0 0 0 0 0 1. 4 0 0 0 0 0 0 0 0 0 8 2 0 12 0 4 0 0 4. Thus political. Table 5. 1 80 38.IDEAINDIA.73 7 0.

This leads to the conclusion that strong extraneous considerations existed in the induction of management in Kerala State Electricity Board.IDEAINDIA. media and the public at large are to be made aware of the justification of the various decisions.8 28 23 31 27 4 4 8 4. being the key ingredient of the overall functioning of an organisation. but should also be convincing to the stakeholders.53 4.603 Not Not Not The employees and experts also strongly felt extraneous considerations in induction of management to be high or very high and those with different opinion were only a negligible number. Sarngadharan 2009 110 Administrative employees Other Employees Experts Total Source : Field Survey 68 58 61 65.786 1. Z test also confirm similarity in opinion among the two groups. Transparency in Decision Making Management decisions. This calls for transparency in decisions.16.62 0.COM – Electricity Industry in the Public Sector in India . In this age of globalisation and privatization trends. management decisions are not only to be made in a systematic. The two groups agreed in their views.COM – Electricity Industry © M. staff. The feeling of the stakeholders on this aspect was also enquired into through the questionnaire and the results obtained through the survey are presented below in Tables 5. The statistical test also reveals that the similarity in the views of the various categories do not vary significantly.4 0 0 0 0 0 13 0 2. transparency in decisions is to be well projected as an added advantage of public sector organizations.15 and 5. administrators. need to be understood and conceived at all levels. The consumers. scientific and accepted ways. IDEAINDIA. Otherwise.6 100 100 100 100 4.268 0.57 4. It is not merely necessary that there should be transparency in all the aspects but it should be made felt to all the categories of stakeholders. For a public sector organisation like the Kerala State Electricity Board.2 0 2 0 0.64 4. people with vested interests against the Kerala State Electricity Board or the ruling political party can create confusion among the public through ill intentioned propaganda and this happened in many a cases in respect of major development decisions of KSEB.

6 60 18.8 0 The analysis brings about the fact that majority of the consumers were not satisfied with the transparency in the decisions of the organisation. 4 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 3.5 0 6 0 2.COM – Electricity Industry in the Public Sector in India .2 7 3.70 2 0. Table 5. 6 20 25 6.COM – Electricity Industry © M.0 0 2. 2 23.5 3 2. and a few of them considered it to be normal.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 4.1 0 16 22 13 10 12 6 14 0 0 13.39 Good Total 100 100 100 100 100 Very poor 21 7 16 10 15 Poor 57.35 2.30 5 2.8 6 2.52 2. 7 16 8 6 10 8 6. Sarngadharan 2009 111 Table 5.6 Technical Employees 6 Administrative employees 9 Other Employees 7 Experts 14 Total 8.34 5 |t| 2. 7 32 34 28 24 28 35. 6 16. Some of them were satisfied with the existing degree of transparency.2 IDEAINDIA.61 0 1.3 6 2.199 0.8 7 16 12 8 10 2.15.16-Views on Transparency in Decision Making . 3 15 22 12 16 18 15.7 0 12. 8 12.Employees and Experts responseNo Category Excellent Normal Mean 2.7 12 16 24 28 20 31.62 0 0.38 0 1.IDEAINDIA.22 9 1. 7 12 10 18 16 12 11.790 1.Views on Transparency in Decision Making .46 3 1.4 8 2.16 2.996 sig Sig Not Not Not Not Not Sig Not Sig Not Not Sig sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 18.72 2. They found this aspect to be either poor or very poor.5 3 2.4 Source : Field Survey 6 8 8 16 8.5 60 51 52 55. 1 20 14.309 2.5 6 2.

policy and operating decisions. in a group. to make decisions as a part of their responsibilities. It is a choice of one behavioral activity from the alternatives’. Thus. Their opinion is found to tally with that of consumers. Continuity of Decision Making Decision making is accepted as an important function even in everyday human life. management matrix. programmed and non-programmed decisions. It is considered to be the core of planning. which is thought to fulfill the objectives of the task of decision more satisfactorily than others. developing alternative solutions. In dayto-day life. The decision making process involves defining the problem.IDEAINDIA. the case is different. It is the process of selection from alternative choices. and the situation parameters. But. logical and thorough approach in the decision making process.COM – Electricity Industry © M.COM – Electricity Industry in the Public Sector in India . Decision making is defined in simple terms as a managerial process or activity of choosing the most appropriate course of action from several alternative courses. the decisions are being influenced by emotions or reasoning or both. Various types of managerial decisions may be identified as routine and strategic decisions. implementing the decision and obtaining feedback for corrective measures. Z test confirmed the similarity in opinion of the two groups of respondents. analysis of the problem and gathering information. individual and group decisions. the conclusion on this attribute is that the decisions and decision making process in the organisation lacked the required transparency. In an organizational set up. Sarngadharan 2009 112 A good majority of the employees and experts viewed the transparency in the decision making of the Kerala State Electricity Board to be either poor or very poor. Allen sees it as ‘the work a manager performs to arrive at conclusion and judgment. staff matrix. people with managerial roles are expected. Only a negligible section of them felt it differently. selecting the best solutions. Continuity of decisions has also its own importance. the specific situation. Rationality is a prime requirement for good decisions. among other things. Rationality is the ability to follow a systematic. Decision making is influenced by a multitude of factors like environment. The statistical test also confirms that similarity in the views of technical employees and experts are significant. A decision makes any sense when it is fruitfully implemented through careful IDEAINDIA.

Implementation. 5 14 25 34 0 0 IDEAINDIA.454 0.18.47 3.54 3.40 3.219 1. Only a few found it to be either poor or very poor.37 Good Total 10 0 10 Very poor 0 9 Poor 10 15 Technical Employees Administrative employees 42.4 20 3 0 16 0 4 0 0 8.6 0 15 16.7 45 24 30 40 44 40 60 37. monitoring and corrective measures. 5 28 22.17. promotions.91 |t| Domestic 7. in the lower levels of management.3 Commercial 9 Public lighting 22 Agriculture 22 Public Water Works 18 Industrial LT 14 Industrial HT 17. monitoring and corrective actions may not be successful in the absence of continuity in decision making.52 3. The results are tabulated in Tables 5. These procedures necessitate continuity.COM – Electricity Industry in the Public Sector in India .98 3.566 2.3 24 22 6 12 8 15.8 Others 0 Total 13.6 100 100 100 100 100 100 100 100 100 2.18. Table 5.474 1.863 3.92 1 3.387 2. and changes in various external factors can affect the decisions and their implementation. The sense of continuity can thus be lacking in decisions.Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor Sig Sig Sig Not Sig Sig Sig Not Not Not Sig Sig |t| 4. In a public enterprise.89 3.70 2. The respondents of the survey were asked to rate the extent of continuity in the decision making in the Kerala State Electricity Board.823 0.17 and 5.2 Source : Field Survey 8 11 24 26 30 30 26.16 The consumers. Sarngadharan 2009 113 planning.IDEAINDIA.4 34. execution.COM – Electricity Industry © M. were of the opinion that continuity of decision making was normal in the organisation.Employees and Experts ResponseNo Category Excellent Normal Mean 3.30 3. there are swift and continuous changes in many of the parameters. Changes in the political leadership.76 3.Views on Continuity of Decision Making .Views on Continuity of Decision Making . like the Kerala State Electricity Board.479 2. it seems.4 13.7 40 18. Table 5. frequent changes due to transfers.7 8 8 0 0 0 0 0 7.

2 22 32 22.COM – Electricity Industry in the Public Sector in India .82 9 0.IDEAINDIA. 6 22 8 22. The Z test confirmed the similarity in opinion of the two groups of respondents. 8 15 12 12. 4 0 3 2.92 5 Not Not The views of the employees and experts require special mention here.04 3. IDEAINDIA. A large number of them regarded it to be excellent or good. Sarngadharan 2009 114 Other Employees Experts Total Source : Field Survey 28 45 37. 6 0 10 0 10 0 10 0 3.4 13 0 2. Thus.77 4 1. The number of them with difference of opinion was negligible.72 4.COM – Electricity Industry © M. it can be concluded that there is a fair continuity in decision making in the Kerala State Electricity Board.

IDEAINDIA.20.19 and 5. Giving maximum salary to the employees. and coping with competition from private sector and foreign products etc are to be seriously considered. good price to the suppliers and lower price to the consumers would be tempting compulsion to the top management because of their populist flavour satisfying the political leadership. An important aspect of the working of this public sector undertaking that has aroused considerable controversy is the problem of a proper pricing policy. The return on investment should be sufficient to attract investment to the business. Hence. whether it is a public sector organization or a private sector enterprise. attainment of optimum level of operation. It shall generate sufficient surplus not only to meet the expenses but also to provide for future investments. inducting or maintaining commercial sense operation in public sector undertakings is not an easy task.COM – Electricity Industry © M. looking critically for the level of commercial sense in the organization under study a question was included in the questionnaire. The awareness of this aspect and a line of operation to make sufficient surplus for sustainability and growth can be referred to as commercial sense.IDEAINDIA. The data so obtained are given in Tables 5. it should have a commercial sense in its operation unless it is financially supported from external sources.COM – Electricity Industry in the Public Sector in India . Sarngadharan 2009 115 Commercial Sense in Operation For any industry to survive. It is against this backdrop. The operation shall be such that the industries have a sustainable growth. This can be done not only by increasing the price to match the expenditure but also by careful management activities aimed at reducing the expenditure. Generation of surpluses. The government policy on the specific sector also has a strong say in the operation of public sector undertakings. making the product available to the consumers requiring it.

63 3.104 4.938 2.19.2 0 6.Employees and Experts ResponseNo Very poor Category Excellent Normal Mean Good Total Poor Technical Employees 11.7 7 14 24 30 18 8. Sarngadharan 2009 116 5.658 1.71 2.9 20 21.IDEAINDIA.COM – Electricity Industry in the Public Sector in India Sig sig .61 Not Not Not Sig It is interesting to note that the employees and experts also found insufficiency in commercial sense on the operations of the Kerala State Electricity Board.79 2.106 5.55 1.322 0.4 14.22 2.2 32.Views on Commercial Sense in Operation .8 Source : Field Survey 100 100 100 100 100 2.594 6.20 2. Only a small number of them had a different opinion.54 Not Sig Not Sig Sig Not Sig Not The majority of the consumers found the commercial sense in operation in the organisation to be either poor or very poor. Table 5.Consumers ResponseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 0.2 21.2 0.10 2. Only a negligible number of this category found this aspect to be excellent or good in the existing set up.2 20 12 24 20 44 30 8.92 2.303 1.20.9 0 15.852 1.5 26 19 0 Administrative employees 12 11 31 28 18 0 Other Employees 15 9 28 29 15 4 Experts 0 12 11 52 25 0 Total 10 11.8 6 2 0 14 0 6 0 0 4.07 2. the operation of the organisation can very well be found to be lacking commercial sense in operations.87 2.5 13 30.COM – Electricity Industry © M.72 2. Scientific Nature of Staff Pattern IDEAINDIA.3 34 24 0 0 8 26.496 4.3 80 34.28 3.6 26.2 100 100 100 100 100 100 100 100 100 2.Views on Commercial Sense in Operation .740 0.188 |t| Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field survey 8 0 0 24 6 8 2. From the analysis of the views of both the categories.2 30 45 38 18 20 30 53.2 19.7 0 18.108 1.

Several studies were attempted on the staff pattern in this public sector organization.IDEAINDIA. The standard task is to be set by the management scientifically so that it represents the amount of work which an average worker working under standardized conditions in an atmosphere of mutual trust and cooperation will be able to do during the day. a suitable staff pattern has to be designed carefully after the above-mentioned scientific studies. The staff pattern of the Kerala State Electricity Board has a very strong resemblance to the pattern of staff in the government departments. Work design is to be innovated very occasionally in an industry. felt that the staff restricted the output because of the major reason that there was no standard about a proper day’s work. it is essential to set the standard task that an average worker should do daily. Work designs are considered not only to be an important task of the human resources management but also to be one of the major legacies of scientific management. With the presence of strong trade unions with political supports. Taylor termed it a fair day’s work. F.22 IDEAINDIA. The work has to be designed around technology and technical processes rather than around the needs and preferences of the employees. Staff pattern refers to the detailed design of the organisation in the subordinate stratum including the detailed description of work design. which is highly technical in nature. since it was formed by converting a government department. A very drastic and revolutionary change could not be made in these years. Sarngadharan 2009 117 The staff pattern of any organisation is to be set on a scientific basis for good performance.. Taylor. The staff structure is to be prepared. Therefore.COM – Electricity Industry in the Public Sector in India . scientific techniques should be used. Even the studies were not complete or detailed enough to match the requirements of a very large and complex organisation like the Kerala State Electricity Board.W.21 and 5. but their implementations were not done or completed. this kind of an exercise may not be easy unless the management has very strong determination to overcome the inherent resistance to changes. The strengths and weaknesses of the present pattern here been brought out through a diagnostic query to the respondents. The results are tabulated in Tables 5. It will act as a norm for the workers and will prevent them from doing work much below their capacity. For setting of standard task.COM – Electricity Industry © M. Accordingly. based on a scientific work study and work design. in order to keep pace with the explosive growth of modern technology.

821 0.5 18.202 0.4 0.05 Sig Not Sig Not Not Not Not Not The number of the consumers viewing the staff pattern to be scientific and non-scientific did not differ considerably.Views on Scientific Nature of Staff Pattern .7 15 12 18 18 18 15.IDEAINDIA.2 11.035 1. The majority of them rated this aspect to be either poor or very poor. Sarngadharan 2009 118 Table 5.4 50.COM – Electricity Industry © M.5 7 6.44 3.COM – Electricity Industry in the Public Sector in India Sig sig .8 0 17.82 2.812 8.Employees and Experts No response Very poor Category Excellent Normal Mean Good Total Poor Technical Employees 5.63 2.Consumers No Response Very poor Category Excellent Normal Mean Good Total Poor |t| 3.3 25 34 24 20 18 24. however.59 Sig Sig Sig Not The employees and experts. the views of the employees and experts deserve more consideration.8 6 9 18 18 22 14 22.19 3.60 3. However.6 12.2 0 12.89 2.66 2.60 2.5 62.04 2. Table 5.Views on Scientific Nature of Staff Pattern .6 Source : Field Survey 100 100 100 100 100 2.484 0.02 2.5 0 Administrative employees 20 35 33 9 3 0 Other Employees 7 8 7 59 16 3 Experts 13 12 9 60 6 0 Total 10.8 12. this is a matter wherein.3 30 16 14 18 24 20 20 22.22. did not find the staff pattern to be scientific.8 22 6 8 10 0 10 0 0 11 100 100 100 100 100 100 100 100 100 3.4 16.29 2. Some of them found it to be normal and those who opted out from this question were also not negligible in number.633 |t| Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 20.21. The statistical test also confirms that similarities in the views of IDEAINDIA. Only a small number of them had a different opinion.2 23.98 3.220 2.6 20 16.760 4.2 13.619 2.4 60 20.381 0.158 0.151 0.7 15 12 16 22 16 17.

Because of increased susceptibility to public observation. Many reputed organizations evaluate their goodwill to be ten to twenty percent of their net worth. The efforts in this direction have to be vigorously publicized in order to offset the aggressive public relation mechanism of private competitors with profit motives. Moreover. Sarngadharan 2009 119 employees except experts are significant. . Negative sides of operations acquire a prime position in the media because of the sensitive nature of public utilities.COM – Electricity Industry in the Public Sector in India . The recent trend. their opinion on the subject can be assigned a higher weight. this aspect becomes even more important in the case of public sector undertakings. The public relation function has to be keen in promptly bringing to public attention. as their aspirations and expectations would be higher. the positive points against the criticisms and to convince the public about the relevance of the public sector organization in the particular utility function. Moreover. Here.IDEAINDIA. The operation of public sector organizations in the utility sector is in the limelight of public observation. the public and the media would not be satisfied. considering the better competency of the employee expert group. Public Relation Mechanism and Efforts In an age of increased consumer awareness. is to advocate through the media the need of privatization. by criticizing public sector organizations always. Even undue influence of vested interests can be suspected at times.COM – Electricity Industry © M.As such. the role of public relation reaches a very high level in the operation of a business organization. A very strong counterforce has to be in continuous operation to fight these negative mechanisms. which makes the political leadership afraid of taking strong non-popular decisions for the betterment of the organization. with a well-maintained IDEAINDIA. Thus. Public sector organizations have a declared aim of promotion of public welfare. the results of the working of state enterprises are exposed so much to the critical eyes of the society. with the starting of the globalisation moves. a well-built goodwill for an organization like the Kerala State Electricity Board can be evaluated to be worth hundreds of million rupees. The value of goodwill for an organization dealing with the general public is quite appreciable. Though most of the public sector organizations have a mode of operation suiting this aim. the conclusion is that the staff pattern of the Kerala State Electricity Board is not at all scientific in nature.

24.5 32 36 58 44.63 1.154 2.3 9 12 28 22 34 11.96 3.06 2. The aspect of public relations mechanism and efforts of the Kerala State Electricity Board was placed before the respondents for assessment of their views.387 Sig Sig Not Sig Sig Sig Not Not A good majority of the consumers found the performance of the public relations mechanism to be either poor or very poor.93 2.244 1.40 2. In this context the effectiveness of the present public relations mechanism and efforts becomes an object of close critical scrutiny.329 1.IDEAINDIA.Views on Public Relation Mechanism and Efforts .8 22.2 11. Table 5. The statistical test also reveals that the similarities in the views of various categories of consumers are significant except public lighting.COM – Electricity Industry © M.434 3.23 2.89 1.718 1. industrial HT and others. Sarngadharan 2009 120 goodwill.6 0 3 5 6 2.98 2. Only a very small segment thought otherwise.23.22 2.4 47.6 60 41 30 36 32 6 14 14 26.933 4. The results obtained are depicted in Tables 5.68 2.602 0.COM – Electricity Industry in the Public Sector in India Sig |t| .2 44 47 48 16 34 30 55.7 0 25.43 2.1 40 16. implementing a rational tariff structure would not be so difficult.Employees and Experts No Response Very poor Category Excellent Normal Mean Good Total Poor Sig Sig Sig Sig Not |t| 4.4 10 8 8 28 30 14 6.5 45 42 15 29.373 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 0 3 5 0 1.Views on Public Relation Mechanism and Efforts .164 2.499 3.7 0 0 12 0 4 0 0 3 100 100 100 100 100 100 100 100 100 2.23 and 5.7 0 13.01 1.55 2.18 IDEAINDIA.Consumers No Response Very poor Category Excellent Normal Mean Good Total Poor Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 0 0 0 10 0 4 0 0 1. Table 5.2 4.2 30 17 12 21 22 0 0 0 0 0 100 100 100 100 100 1.811 6.24.

IDEAINDIA.COM – Electricity Industry © M. one can reach a strong conclusion about the poor performance of the public relation mechanism of the Kerala State Electricity Board that it needs thorough revamping.IDEAINDIA. Sarngadharan 2009 121 The employees and experts also found the present public relations mechanism to be either poor or very poor. The statistical test also confirms that similarity in the views of technical employees and experts are significant except experts.COM – Electricity Industry in the Public Sector in India . Here. Those who found it to be excellent or good were negligible in number.

Specialisation may be inducted specifically through recruitment of specialists. and the practice of posting the right person for the right job are found to be lacking. Departmentation is the grouping of homogeneous activities into one organisational unit on the basis of special and contiguous nature of activities. Specialisation in specific fields is the only solution. Specialisation improves efficiency and productivity to a great extent. Functional departmentation is considered to be more effective because it is logical. Sarngadharan 2009 122 Chapter 6 FUNCTIONAL SPECIALISATION AND TECHNOLOGY USED With the organisations growing in size. delegation.COM – Electricity Industry in the Public Sector in India . circle. It involves horizontalisation of activities in an enterprise. each basic or major function is organised as a separate department. It facilitates unity of direction. a major function may be subdivided into secondary functions. However. Electrical engineering industry and the connected technology is growing so vast that one person cannot have a sufficiently deep knowledge in all the fields. natural. Departmentation is normally done on functional basis.IDEAINDIA. Specialisation occurs even automatically through increased experience. It has become one of the primary tasks in designing the organisational structure. Specialisation can be brought out effectively only if departmentation is done carefully with very good functional segmentation. departmentation as well as decentralization of authority has become prevalent in the business world. and based on activities. The most important feature of departmentation is specialisation. The Kerala State Electricity Board has enough functionally segregated units for each of the areas. exposure and concentration. etc. time proven. suitable facilities for improving specialized knowledge. As the personnel can concentrate on a very small area or element of the production process. there is a IDEAINDIA. functional specialisation is necessary to meet the complexities of modern electricity industry. Anyhow. they can attain a high level of specialisation. This is an age of specialisation. divisions and sections. However. specific training and education. coordination and better control. If necessary. Other forms used are product departmentation and territorial departmentation. This is particularly true for a highly technical field like that of electricity.COM – Electricity Industry © M. namely. In functional departmentation.

61 3. Some of them found it to be normal.829 1.4 3. In the Kerala State Electricity Board. Sarngadharan 2009 123 criticism against over-specialisation that it kills the enthusiasm and motivation and increases boredom in the working environment.26 4. it is doubtful whether sufficient specialisation exists in the Kerala State Electricity Board.2 0 8.6 38.1 and 6. there is territorial departmentation also. Table 6.4 3.3 3 10 16 16 24 2. But in the absence of effective training mechanism and nonavailability of facility to work in one function for a long time.COM – Electricity Industry © M. Views on Functional Specialisation .740 2.07 3.7 39 34 30 22 26 17.2.3 12 18 18 24 16 35.COM – Electricity Industry in the Public Sector in India .196 sig Not Sig Not Not Sig Sig Sig Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 16. IDEAINDIA.70 The majority of the consumers viewed the functional specialisation in the organisation be either good or excellent.4 15 3 0 18 0 4 0 0 7.8 80 33 23.73 4.80 3. In order to evaluate this aspect the respondents of the survey were made to record their comments.1.741 0. The functions relevant in functional departmentation are very complex in nature.511 2.00 3.260 4.Consumers No response Very poor Category Excellent Normal Mean Good Total Poor |t| 0. The responses are tabulated and incorporated in Tables 6.4 0 5.26 3. which necessitates a high level of specialisation.365 3.864 0.7 43 38 18 24 22 20 0 25.31 3. departmentation is mainly functional.IDEAINDIA. though in the sub-level.2 100 100 100 100 100 100 100 100 100 3.6 20 20. Only a negligible portion of them regarded it as either poor or very poor.3 0 0 0 14 8 24.

Z test also confirmed the similarity in opinion of the two groups of respondents. Sarngadharan 2009 124 Table 6. Though mechanization and automation was started decades ago.34 1.Employees and Experts No Response Very poor Category Excellent Normal Mean Good Total Poor |t| Not Not Not Not Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 60 59 52 49 56 18. Dependence on Foreign Technology The developed countries and multinational corporations are leaving no stone unturned. On the other side. to face the global competition. It is true that one cannot keep the eyes shut towards these explosive growths. the present situation throws the developing countries into a dilemma.244 1.5 31 19 38 25 11.5 0 0 0 1 100 100 100 100 100 4. in a technical industry. Many international organisations and progressive groups see a heavy threat in these international trade agreements. Due to IDEAINDIA. the use of foreign technology is unavoidable in the modern context.208 Sig Sig Sig Not A good majority of the employees and experts sensed sufficient functional specialisation in the organisation. They fear the return of colonialism.36 4.IDEAINDIA.4 2.36 4. the recent leap through computer methods and information technology is really inspiring. The developing countries are creating a coercive atmosphere with international laws and agreements.5 2 5 0 4.26 4. in which many smaller countries may have to be slaves of bigger countries. The multidimensional analysis leads to the conclusion that the Kerala State Electricity Board is maintaining a sufficient level of functional specialisation. Dependence on foreign technology has become inevitable for developing countries.47 4. In fact.2 Views on Functional Specialisation .COM – Electricity Industry © M.157 0.COM – Electricity Industry in the Public Sector in India sig . the term ‘foreign technology’ becomes questionable as the barriers are thinning down to the concept of global village.5 8 11 13 11 7. to adopt state-of-the-art technology and the latest developments in order to reduce cost and improve quality.405 0. However. They found it to be excellent or good. The statistical test also confirms that similarities in the views of employees except experts are significant.

politically motivated propaganda is ruling the scene. Sarngadharan 2009 125 technological development. Hence. the policy makers and research organisations have to seriously consider this problem to find out a solution. Thus an assessment of the level of foreign presence in the technological picture of the Kerala State Electricity Board is relevant in the context. The adaptation of modern technological developments and innovations from developed countries is thus a double-edged sword. The foreign technology makes available the fruits of costly research and development at lower costs to the developing nations. there is the danger of exploitation by multinationals through high cost spares.COM – Electricity Industry in the Public Sector in India . On the other side. On the one side. The organisation used foreign technology to a good extent in the earlier years. and indigenous expertise. it accelerates the industrialization process by improving efficiency and reducing cost. a situation in which the developed countries would dictate terms to the industries of the developing countries in the future. Thus. At the same time. The extent of a safer level of foreign technology depends on many factors such as cost. Unfortunately.COM – Electricity Industry © M. availability of indigenous alternatives.3 and 6. An effort was made to evaluate the present situation by collecting the views of the respondents in this regard as given in Tables 6. There has been instances in which encroachment into the sovereignty has been alleged through conditions of close scrutiny and consultancies along with the technologies offered. an over-dependence on foreign technology may not be beneficial. The possibility of using indigenous technology is being explored to a greater extent now. the Board is making serious changes in the viewpoints. IDEAINDIA. The equipment so supplied has given satisfactory performance also.IDEAINDIA. maintenance contracts and consultancies. The government. what is required is a level of balanced amalgamation of foreign and indigenous technology. of late. Determination of this level is not easy. But. it leads to technological slavery. most of the hi-tech products have become cheaper at the international level. instead of any serious discussions.4. A right level of adopting foreign technology is extremely essential for such a technological industry.

0 14.19 3.02 8.0 0.0 100 4.348 0.78 10.4 40 24.0 16.0 100 3.0 100 3. The statistical test also confirms that similarity in the views of employees and experts IDEAINDIA.2 14 15 14 14 12 16 15.6 2.0 3.0 0.74 Not Sig Sig Sig The employees and experts gave clear cut responses to the query.0 12.2 14.25 3.11 0. A good majority of the employees and experts saw the dependence on foreign technology to be either very high or high.4 100 3.Employees and Experts Very High No Response Very Low Category Normal Mean Total High Low Technical Employees Administrative employees Other Employees Experts Total Source: Field Survey 48.047 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field survey 16.0 51.4 10 10 12 14 22 12 20 20 13 11 11 14 10 24 12 20 0 13 23. Some of them viewed it to be normal and a negligible number of them found it to be low or very low.21 2.6 40 14.316 1.0 14.0 100 4.900 0.0 16.16 21.5 53.0 20.4 3.3.6 9.COM – Electricity Industry in the Public Sector in India sig sig .70 3.0 12.166 0.436 2.638 0.0 20.Views on Dependence on Foreign Technology . Sarngadharan 2009 126 Table 6.999 0.0 11.0 18.7 18 20 18 14 18 17.0 21.793 5.3 24 20 22 0 12 2.18 2.4.IDEAINDIA.0 5.0 44.7 22 20 22 28 30 24.91 3.0 0.5 16.04 12.18 3.Consumers Very High No Response Very Low Category Normal Mean Total High Low |t| Not Not Not Not Sig Not Not Not |t| 0. Table 6.6 24.980 2.8 0 17.Views on Dependence on Foreign Technology .COM – Electricity Industry © M.20 3.148 Not Not Not Not Not Not Not Not The majority of the consumers felt the dependence on foreign technology to be either high or very high.2 12.2 0 17.300 0.0 15.

Table 6.7 42 40 30 16 20 15.714 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 38. They found the condition to be either good or excellent. Z test also confirms this finding.1 0 11.5.21 2.331 2.66 2. Sarngadharan 2009 127 except technical employees is significant.9 60 15.69 3. This question brought strong responses from the employees and experts while consumers made mixed response.90 3.IDEAINDIA.398 1. Only a negligible section of them had a different opinion.67 2.75 3.677 |t| 3.68 2.403 2.5 11 10 16 10 6 12 14 10 9.6 Views on Sufficiency of Essential Staff/ Workers .47 Sig Not Not Not The majority of employees and experts found the condition with regard to the shortage of essential staff to be either poor or very poor.Views on Sufficiency of Essential Staff/ Workers .40 3.200 4.3 0 16.8 100 100 100 100 100 2.7 16 18 16 24 22 11.826 1.601 1.1 40 17. a high level of dependence on foreign technology in the Kerala State Electricity Board is found to be the truth.39 2.766 1.Consumers Very poor No Response Category Excellent Normal Mean Good Total Poor |t| 2. The consumers may not have enough exposure to the state of affairs inside the Kerala State Electricity Board and they may not be in a position to give IDEAINDIA.610 1.46 Sig Sig Not Not Sig Not Sig Not More number of consumers found the essential staff to be sufficient in the Kerala State Electricity Board.6 62 55 51 55 57 19 8 9 8 12.4 11 9 2 8 4 6 0 0 7 100 100 100 100 100 100 100 100 100 3.6 0 32 16 18 18 16 16 22 13.18 2.5 0 3 0 0.6 10 8 14 20 22 18 28.8 16.157 0.6 0.Employees and Experts No Response Very High Very Low Category Normal Mean Total High Low Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 6 14 13 11 10 6.88 3.53 2.802 1.COM – Electricity Industry © M. Thus.2 8 7 8 10 18 12 31.COM – Electricity Industry in the Public Sector in India sig sig . Table 6.

This finding highlights the need for a detailed scientific study on this issue.COM – Electricity Industry in the Public Sector in India . The initial investment would be offensive for a cash-starving public sector organization.IDEAINDIA. transmission and distribution. innovations reducing damage to environment. Thus. appropriate vision. seem difficult. Sarngadharan 2009 128 an accurate answer to the question. computerization in all the areas. let alone replacement. live line maintenance and demand side management using remote control. Standardization leading to modular technology. At the same time. and thereby reducing the net capacity and enhancing the cost. The latest trend is more alarming that is that a newly introduced technology becomes obsolete in months. Continuing With Outdated Machines and Systems The development in Science and Technology is at its maximum pace and adoption of the new machines and systems based on this has been determining fate of any industrial or commercial venture. The Kerala State Electricity Board is in the process of renewals and renovations of older machines. a large number of them opined the situation to be normal. There is need to give more weight to the opinion from the latter group and confirm a shortage of staff in important areas. In organizations like the Kerala State Electricity Board. the pace of the process has been observed to be low.COM – Electricity Industry © M. In this context. who are mainly politicians. policy makers. However. such as huge investment in its introduction. are a few to quote as examples. remote metering and billing. The use of modern technology has two main commercial features. IDEAINDIA. time and money for proper upkeep. and drastic reduction in cost of production later. Older machines not only cause frequent breakdowns and costlier maintenance but also cause lesser efficiency. may not be easily willing to allow huge investments to generate surplus in future operations owing to problems confronted with resource crunch. possibility of out-dated technology in operation in the Kerala State Electricity Board cannot be ruled out. Moreover. This points out to better chances of the presence of outdated equipment in the systems of the Board. newer developments in information technology used or monitoring of systems and fault removal. the introduction of modern technology in public sector undertakings may have to face many hurdles. This is more true in respect of an organization engaged in electricity generation. The average life of running machinery is around 30 years. poor or very poor. in regard to sufficiency of essential staff. The first line of generators and line equipment were installed around 50 years ago. attitude.

Views on the Presence of Outdated Machines and Systems .20 3. a research-minded inquisition into the state of affairs is essential.7 3 0 18 0 4 0 0 7.3 3 10 16 0 0 0 0 4.7 43 38 18 44 34 33.2 3. Table 6. Table 6. For portions like dams.2 0 0 0 0 0 0 0 13 0 2.6 4. Here also.188 0.Views on the Presence of Outdated Machines and Systems .74 4. the question of evaluating the presence of out-dated machines and systems may not be so simple.00 3.5 32 15 31 22.26 4.7and6.6 100 100 100 100 100 4.96 Sig Sig Not Sig Not Not Not Not The majority of the consumers identified a high presence of outdated machines and systems in the present set up of the Kerala State Electricity Board.299 2.898 3.916 1.7 39 34 30 32 26 31. The general belief in this regard may not be found true on a close analysis.54 Sig Sig Not Not IDEAINDIA.38 4.Employees and Experts No Response Very High Very Low Category Normal Mean Total High Low Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 78 52 56 59 64.32 4.121 0.3 0 0 0 0 0 0 0 1 14.61 4.136 0.Consumers ResponseNo Very high Very Low Category Normal Mean Total High Low |t| 2.3 0 30 38.973 0. deterioration may be insignificant. The question on the presence of outdated machines was launched by keeping these facts in mind.73 4.6 17.98 3.2 3.843 0.6 0 22. and structures which are properly maintained.49 4.801 2. Thus.8.COM – Electricity Industry in the Public Sector in India sig sig .095 |t| 3.3 12 18 18 24 36 35.4 23. Sarngadharan 2009 129 Still. A very large section of them regarded it to be either high or very high.00 3.1 100 35.98 4.2 100 100 100 100 100 100 100 100 100 3.620 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 16.5 12 9 10 8 0 4 7 0 2.457 1.COM – Electricity Industry © M. The results of the survey are tabulated in Tables 6.7. there are parts of the system in which deterioration consequent on ageing would be negligible.8.IDEAINDIA.

This has made it difficult to identify quality products. use of foreign materials is inevitable. maintenance contracts and IDEAINDIA. This leads to the conclusion that the presence of outdated machines is of a high order. The statistical test also reveals that the similarity in the views of other employees and experts did not vary significantly. In an enterprise. necessitating urgent steps for renovation and modernization to cope with the increasing demands of the modern world. where the technology has to closely follow the global growth. and they try to dump them in this subcontinent. Naturally. The globalisation policies of the government of India virtually opened up the Indian market to the whole world. Quality of Foreign Supplies Goods brought from outside were considered to be of high quality till recent times in India.COM – Electricity Industry in the Public Sector in India . Complete avoidance of foreign technology means running away from the present explosive growth of technology. there is the danger of exploitation by multinationals through high cost spares. This has necessitated drastic cost reduction. globally. At the same time. The recent technological developments worldwide have created heavy competition. Sarngadharan 2009 130 A large number of the employees and experts identified the machines and systems as outdated. This is done with the aim of capturing and maintaining their share in the foreign markets. Many new entrants to the modern industrial world have rationalized the production concepts. Z test confirmed the similarity in opinion of the two groups of respondents.COM – Electricity Industry © M. This has resulted in flooding of the Indian market with foreign goods and technology of all qualities and prices. it can affect the level of quality. low quality items. They found the presence of outdated machines and systems to be high or very high. The use of foreign technology can thus be beneficial in certain applications. Costly global research and development can thus be utilized for domestic growth also. Switzerland. and Canada excelled in the world market. most of the hitech products have become cheaper at the international level. The Kerala State Electricity Board was utilising the foreign expertise to a great extent. There are many foreign countries producing very cheap.IDEAINDIA. Due to technological development. like the Kerala State Electricity Board. Countries like Japan. All the countries are doing their export from top quality products of the country. Certain countries with cheap labour and other inputs have presented an all-new picture of industrial production. Only a negligible number found a low degree of the presence of outdated machines.

508 2.13 2.2 8 6 12 16 10 18 11. Foreign spares and materials are usually pressed through the funding contracts by the respective nations. IDEAINDIA.148 0. The results of the enquiry are shown in tables 6.1 0 10.COM – Electricity Industry © M.78 2.9 80 17.42 3.9and 6.3 0 11.680 1.3 9 14 18 12 16 13. Sarngadharan 2009 131 consultancies.32 2.9.4 0 28 100 100 100 100 100 100 100 100 100 2. The Board uses foreign funding in many of its investments.2 20. an over-dependence on foreign technology may not be beneficial. serious questions arise about the quality of exported goods used. Some of them found it to be normal and only a negligible number of them viewed it to be either good or excellent.79 2.2 40 48 6 32 0 24 4.9 0 16.4 12 12 22 10 32 12 28.IDEAINDIA.8 12 11 28 10 28 16 28. Experience in using these materials can bring-out more reliable data in this aspect.310 0.76 Not Not Not Sig Not Not Not Not The majority of the consumers viewed the quality of foreign supplies to be either poor or very poor. There can be the danger of dumping of cheaper versions of quality products.7 14 18 14 18 14 13.768 1.66 3. Hence.Consumers No Response Very poor Category Excellent Normal Mean Good Total Poor |t| 0. The question on quality of foreign supplies was asked with such an aim.20 2. Because of this situation coupled with lack of facilities to assure the quality.49 2.921 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 7.Views on Quality of Foreign Suppliers .10 Table 6.3 20 16.COM – Electricity Industry in the Public Sector in India sig .121 0.412 1.

Employees and Experts Very poor No Response Category Excellent Normal Mean Good Total Poor |t| 1. The statistical test also confirms that similarity in the views of technical employees and experts do not vary significantly. Most of the employees and experts had a poor opinion about the quality of foreign products.4 11 12 12 14 12 11 13 11 16 12.4 42. This has naturally necessitated drastic efforts in cost reduction.Views on Quality of Foreign Supplies .418 0.75 2.8 2 100 2.63 2. All industrial enterprises.10.72 2.COM – Electricity Industry in the Public Sector in India sig . Thus the quality of materials of foreign supplies needs to be concluded as inferior. The consumers also didn’t record any considerably different opinion. Only a negligible section of them found it otherwise. Sarngadharan 2009 132 Table 6. 16. the opinions of the employees and experts need to be given more weightage.079 Technical Employees 12.5 100 12 7 100 13 3 100 14 0 100 2. Considering the exposure to the state of affairs and the knowledge and competency to judge the quality of materials.5 Administrative employees 14 Other Employees 13 Experts 15 Total Source : Field Survey 13.61 Not Not Not Not The employees and experts were more or less unanimous and had a firm opinion in providing responses to this question.IDEAINDIA. In Indian context.819 0. which can IDEAINDIA. Quality of Indigenous Supplies Ensuring the quality of raw material is an essential prerequisite for producing quality products.COM – Electricity Industry © M.5 0.2 22. Z test in respect of the opinion of the two groups also confirms this finding. this requires special care since there are unreliable suppliers even among the well known suppliers.48 2.5 42 48 41 43. irrespective of their size should have an effective mechanism for ensuring quality of raw materials and other inputs procured for production process.134 1. They regarded it as either poor or very poor. The recent technological developments have created heavy competition.

The controversy over the purchase of electronic meters in the Kerala State Electricity Board is a pointer. in the Kerala State Electricity Board can be evaluated by finding out the quality of the present suppliers as the major portion of its purchases is from indigenous suppliers. and setting up at least minimum necessary testing mechanisms. The results obtained from the questionnaire are presented in Tables 6. and blacklisting of suppliers with a bad history. This question gives an important data about the performance of the Kerala State Electricity Board.12. all the suppliers will have to be given chances to compete for supplies to public sector organizations.COM – Electricity Industry © M. Still. around thirty per cent meters were defective. IDEAINDIA. shortlisting through prequalification. there is every chance of materials of poor quality creeping into the inventory. shortlist the suppliers by various methods. The effectiveness of mechanisms. It is reported that in certain batches. Sarngadharan 2009 133 eventually eat into the quality of products. in spite of I S I certification. the firm will have to resort to other accepted procedures. In the case of public sector undertakings. corruption in the purchase department can also be a major reason for poor quality purchases. This includes registration of reliable suppliers. purchasing from previously known suppliers. are among these methods. if any.COM – Electricity Industry in the Public Sector in India . relying on reputed firms. based on provable reasons. Though private institutions can have their own methods to screen out unknown or nonreliable suppliers from the list of prospective suppliers. There are instances of I S I certification failing to ensure the quality required for specific uses. insisting on certification from institutions like I S I. prequalification by studying the suppliers’ history. Still. can overcome many of the above difficulties. In such situations. the public sector organizations can. maintaining sufficient care in preparing specification for purchases. and insisting on certification from the standard institutions. insisting on reliable certificates. Registration of suppliers. If the purchasing firm cannot afford to have mechanisms for ensuring the quality of their procurements.11and 6.IDEAINDIA. public sector organizations have certain limitations in doing so. Through the principle of equal chances to all. as ensured in the Constitution of India. Still the rulesinsisting that purchases have to be made through tender and that the lowest tender has to be accepted for ordering materials compel the public sector organizations to purchase the cheapest available article or material.

They regarded it to be either poor or very poor.90 In the second group also.90 2.6 100 100 100 100 100 2.356 1.94 The majority of the consumers were not satisfied with the quality of indigenous suppliers.022 0.035 1.119 sig Not Not Not Not Not Sig Not Not Sig Not Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 6.2 0 24 100 100 100 100 100 100 100 100 100 2.5 17 15 15 14.7 10 16 18 12 16 11.8 35 50 6 20 0 12 2.15 2.921 1.4 20 15.04 2. Sarngadharan 2009 134 Table 6.Views on Quality of Indigenous Supplies .12.8 11.36 3. Table 6.8 22.3 12 24 10 28 12 24.80 2.Views on Quality of Indigenous Supplies .1 0 11.2 1.4 80 21.COM – Electricity Industry in the Public Sector in India Mean Good Total Poor . Z test shows significant variation in the views of the two groups.Consumers ResponseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 1.241 |t| 2.62 3. the majority opinion was against the indigenous firms.2 8 7 14 18 14 28 33. Some of them found it to be normal and a negligible section of them felt it to be excellent or good.Employees and Experts No Response Category Very poor Excellent Normal Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 14 12 15 15 14 13.483 0.185 1.2 28 11 18 18 22 24 24. It is also interesting to note that a good number of them evaded the question.77 3.035 1.03 3.3 10 22 16 24 8 4.08 3.5 0 5 7 11 1 5 0 13.COM – Electricity Industry © M.23 2.6 11.5 24 20 31 26 22.215 0.11.IDEAINDIA.751 2.81 2.4 0 12.4 27.5 35 38 34 30. A large number of the employees and experts were of the view that the quality of their supply was either poor or very poor.3 0 14. IDEAINDIA.444 1.69 3.

COM – Electricity Industry in the Public Sector in India . Technology is growing at an incredible speed globally.COM – Electricity Industry © M. transmission and distribution. availability and transportation costs of the fuels. The comparative prices of different fuels do not maintain a constant pattern. and communication. Technology and Selection of Fuels As was mentioned earlier. leading to considerable reduction in the cost of production. In all the spheres of the electrical engineering industry. IDEAINDIA. a few years ahead. it calls for an increased capital investment. Changes in transportation costs also make the picture unsteady. The modern trend is the concept of global village in industry. The comparatively higher time of completion of generation projects makes things more complicated. But its effectiveness can be evaluated only through the assessment of the present situations. This task is done through the relevant part of the questionnaire. This expertise might be available with the highly experienced technocrats of an age-old public sector undertaking like the Kerala State Electricity Board. it can be concluded that the quality of materials supplied by the indigenous manufacturers was not up to the level as expected by the stakeholders. In the generation side. no industrial concern can survive in the modern age of severe competition with out opening its doors to the continuing tremendous growth of technology. Not only the developed countries and multinational corporations but also the developing countries across the continents are struggling continuously to update the technological innovations and developments in order to improve quality and to reduce cost. The use of modern technology helps in drastic reduction in manpower requirement and wastage of time and materials.IDEAINDIA. On the other hand. The latest picture is that of a newly introduced technology becoming obsolete in months. selection of fuel has a strong say in the cost of production. The same is the case with availability of fuels. technology. science. This calls for expertise in predicting the conditions such as costs. modern technology is moving forward at an unimaginable speed. namely. and to face the ever strong international competition. generation. Sarngadharan 2009 135 Considering the swing of the views of the two groups against quality of supplies from indigenous manufacturers.

111 |t| 2.18 2.3 0 8.7 4 10 6 4 10 11.14 2.5 42 45 51 47 32. showing their little exposure to this aspect.4 40 20 23.4 60 25 18 12 30 20 34 22 6.42 2.5 25 22 12 18 48.2 100 100 100 100 100 1.Views on Technology and Selection of Fuels .8 0 0 1 0 0.34 1.2 5.3 3 8 8 6 8 33.40 2. Sarngadharan 2009 136 Table 6.870 1.IDEAINDIA.5 22 19 33 27.316 2.3 23 26 24 32 24 24.896 0.2 16 19 22 18 24 24 24.92 2. Thus.369 0.41 2.197 1.55 3.COM – Electricity Industry © M.Consumers ResponseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 1.1 0 6.Employees and Experts No Response Very poor Category Excellent Normal Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 2 4 5 2 3 1. Some of them found it to be normal and only a negligible section of them viewed it to be either good or excellent.7 0 19 33 39 4 24 0 12 0 0 22 100 100 100 100 100 100 100 100 100 2. The statistical test also confirms that similarity in the views of employees is significant. A good number of the consumers didn’t give their opinion.07 A good number of the employees and experts were of the view that the technology and selection of fuels were either poor or very poor.34 2.14.937 sig Not Not Not Not Not Not Sig Not Sig Sig Sig Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 4.050 0. .29 2. the technology and IDEAINDIA.13.89 2.5 7 8 2 4 15. Only a negligible number of them found it to be normal or good. Table 6.40 2.481 4.035 0.324 0.288 2.COM – Electricity Industry in the Public Sector in India Mean Good Total Poor .Views on Technology and Selection of Fuels .46 A large number of the consumers viewed the technology and selection of fuels to be either poor or very poor.

IDEAINDIA. A monopolistic firm has the privilege of utilizing the whole demand. When the product is an essential commodity. The chance of production capacity going beyond the demand is remote in industries like electricity. However. the above freedom becomes more extensive. in these aspects is the inherent limitations of a public sector undertaking. which has an important role in the economic activities. shortage of transmission and distribution equipment. like insufficiency of transmission lines. The shortage at a particular place might be due to a multitude of factors. non-availability of land for installation of equipment and construction of lines. especially in the situations prevailing in the State of Kerala. IDEAINDIA. if any. insufficiency of distribution lines. Sarngadharan 2009 137 selection of fuels can be deemed to be poor or not copping with the present-day demands. resistance by the public and landowners to such construction. the role of its production capacity gains more importance. So the firm has absolute freedom in production.COM – Electricity Industry © M. if a company with a monopoly of an essential item fails to meet the demands of the public. Z test confirmed the similarity in opinion of the two groups of respondents. If there is such an insufficiency. it would be considered a serious drawback. Sufficiency of Generating Capacity Electricity industry is considered to be the mother of all the industries. the public belief that there is a shortage in capacity cannot be taken for granted. inability of households or a group of households to afford the cost of lines and/or wiring of houses. provided it has sufficient production capacity without any problem in promotion of sales. production capacity is an important indicator of successful performance and sustainability. insufficiency of production capacity becomes a failure of criminal nature. spreading of unscientific belief against electrical equipment and lines by groups with or without vested interest. When a firm attains monopoly in the industry. Since the consumer is not given the freedom of choice to buy from other producers. sales and overall performance has the freedom also in pricing and distribution. The only limit. he becomes a helpless victim of the situation. When the product is an essential commodity like electricity. it has to be seen as a failure of the planning and operation in the past years irrespective of the reasons cited y the officials. On the other hand.COM – Electricity Industry in the Public Sector in India . For any industry. and un-affordable electricity charges.

34 2.240 0.379 0.Employees and Experts RespondedNot very poor Category Excellent Normal Mean Good Total Poor Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 6 9 7 14 8.39 Sig Not Not Sig IDEAINDIA.51 Sig Not Not Not Not Not Not Not The majority of the consumers found the generation capacity of the K S E B to be grossly inadequate.8 10 25 22 28 22 28 35.128 1.309 2.5 0 6 0 2.199 0.79 1.27 2.1 0 25. The persons closely dealing with the system and the public at the receiving end can give the more accurate comment and hence this question was put forth before the respondents.4 6 8 8 16 8.137 1.COM – Electricity Industry in the Public Sector in India sig sig .Consumers Very poor No Response Category Excellent Normal Mean Good Total Poor |t| 2.6 60 18.15 and 6.16 .155 |t| 2.3 29 34 20 34 20 31.COM – Electricity Industry © M.7 0 8.3 8 12 12 12 12 11.1 0 12 23. Sarngadharan 2009 138 Hence.52 2.8 15.2 100 100 100 100 100 2.72 2.6 40 21. Only a negligible section of them found it otherwise.IDEAINDIA.8 7 16 12 8 10 57.60 2.Views on Sufficiency of Generating Capacity . They found it to be either poor or very poor.6 19.15 Views on Sufficiency of Generating Capacity .16 2. Table 6.53 2.379 0.216 0.996 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 8 9 12 8 12 8 6.5 60 51 52 56 21 7 16 10 15 2. Table 6. The results are shown in Tables 6.44 2.3 15 16 18 16 18 15.2 24 14 4 14 4 14 0 0 14 100 100 100 100 100 100 100 100 100 2.128 0.44 2.53 2. the shortage of capacity of production or more precisely installed capacity has to be confirmed through close observation and scientific probe.35 2.77 2.16.

This parameter is equivalent to the capacity of the distribution network in comparison to the production capacity of industries. it may not be so with transmission capacity. The higher the quantity of power to be transmitted. Mohanan. IDEAINDIA. unexpected insufficiency must have been faced by the Kerala State Electricity Board.stations. Evidently. Transmission is the process of taking the bulk power generated at the power stations. as is evident from the reports of the media on insufficient voltage and load shedding on account of insufficient transmission capacity. The transmission is made at voltages 400KV. The capacity of these elements of the transmission system is decided by predicting or forecasting of the load growth for a number of years. A good majority of them found the condition to be either poor or very poor. For changing voltages the sub-stations are set up in all the lines of the abovementioned voltages. and 66KV. Hence. Even when generation capacity can be made sufficient. Transmission capacity means the power handling capacity of the lines. 220KV. the sub stations and the transformers. The statistical test also confirms that similarity in the views of technical employees and experts are significant. The transmission system consists of high voltage transmission lines and sub. Sufficiency of Transmission Capacity The sufficiency of generation capacity has already been dealt with earlier in this study rreport. It is felt that this aspect has to be critically examined. the standard of living of the mass. normally situated at remote hilly areas. where the major consumption occurs. Member (Transmission) stated that the current major thrust of the activity of the Kerala State Electricity Board was in strengthening the transmission network. the switching systems. Hence the generating capacity can be assumed to be insufficient to meet the present-day demand. N.COM – Electricity Industry in the Public Sector in India . 110KV. Z test confirmed the similarity in opinion of the two groups of respondents.IDEAINDIA. These corrective measures can be successful only if they are designed scientifically with a reliable prediction. the higher will be the voltage of transmission. The Kerala State Electricity Board has identified these shortcomings and started works to improve the transmission capacity through major projects in transmission.COM – Electricity Industry © M. due to drastic growth of science and technology and thereby. The voltage depends on the bulk of power to be transmitted. Sarngadharan 2009 139 The employees and experts viewed strongly for gross insufficiency of generating capacity. many of the predictions in the earlier years have gone wrong. P. to the centres of inhabitation like cities and towns.

05 8 0.6 6 3.717 0.26 7 2. Views on Sufficiency of Transmission Capacity .18 show the data so obtained.Employees and Experts No Response 0 0 0 0 0 Very High Very Low Category Normal Total 100 100 100 100 100 High Low 43.66 4 2.4 2.5 35 29 38 35.35 4 2.516 1.671 1. 2 23.5 1 2.5 7 8 4 6 7 8 10 5 7.5 9 9 8 7.05 IDEAINDIA. 2 60 28.3 13 12 18 4 10 4.17.5 41 44 45 43. 7 16 12 6 0 10 0 0 12.6 1 The majority of the consumers found the transmission capacity of the K S E B to be inadequate.IDEAINDIA.4 2. Total 2 Source : Field Survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. 7 22 20 22 22 24 17. 2 21 12 18 14 30 12 27 0 19 20.7 11 10 18 10 12 8.04 7 0.COM – Electricity Industry in the Public Sector in India .COM – Electricity Industry © M.4 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 5.173 Not Not Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 9.24 1.2 2 2.4 8.4 6. Table 6.9 0 10.18.8 37. 2 0 10.Views on Sufficiency of Transmission Capacity .2 4 2.82 4 1. Sarngadharan 2009 140 The current state of affairs is analysed herein the light of the results of the survey.36 8 Mean sig Not Not Not Sig Sig Not Sig Not |t| 0.8 5 2. There were a few of them who admitted their ignorance on this aspect.71 7 0.0 4 2.Consumers ResponseNo Very High Very Low Category Normal Mean Total High Low |t| 0. Tables 6. 6 16.92 2.7 3 2.00 2.17 and 6.11 2. Some of them found it to be normal and a still smaller number of them found it to be either high or very high. 8 40 20. 3 26 28 22 34 32 42. Table 6.

Certain environmental factors like saline water on sea shores also cause chemical decomposition of certain materials.. Z test confirmed the similarity in opinion of the two groups of respondents.COM – Electricity Industry © M. maintenance has to be a good continuous process to keep the system in an orderly condition. switching of the lines for maintenance becomes practically difficult. and decaying. Many of the lines are fully loaded or even overloaded. and connections get deteriorated with the passage of time. Maintenance of Transmission System Maintenance means keeping up a system in its full working condition. Thus. rusting. Unlike generating stations. Such decay and deterioration of components will have to be set right by proper maintenance. The materials get eroded due to chemical processes like anodic losses. and 66KV. Heating of parts will make certain materials brittle. 110KV. and liable to have loss of temper. one can reach the conclusion that there is severe shortage of transmission capacity in the K S E B. A more detailed discussion on transmission systems is made in the early part of this report. depending on the bulk of power to be transmitted. cleaning tightening and renewing of joints Even the stationary parts in electrical system are subject to vibration and hence face deterioration. Sarngadharan 2009 141 A good majority of the employees and experts rated the transmission capacity of the K S E B to be either low or very low. 220KV.IDEAINDIA. joints. which speeds up the deterioration process. The transmission system consists of the electrical network necessary to transmit the bulk of power from the generating station to the load centre. insulators. Only a negligible section of them found it to be normal or high. Owing to lack of flexibility and alternate routes for transmission. in the light of the strong opinion of the respondents especially the employees and experts. Many of the lines and sub-stations are outdated. causing heating of the line and systems. IDEAINDIA. The statistical test also confirms that similarity in the views of employees and experts is significant.COM – Electricity Industry in the Public Sector in India . This is done by replacing worn out parts. the transmission systems are in service round the clock throughout the year. keeping various parameters within the safer limit. From the analysis of the above data. renewing machines. The conductors. It includes high voltage transmission lines and sub-stations of voltages 400KV. as well as stationary parts subjected to wear and tear. Even deposit of dust and other particles can reduce the insulation value of many of the components and cause instability of operation.

there can be shortage of maintenance which subsequently leads to breakdown and interruptions in the electric supply.5 8 2. Table 6. Under this condition.COM – Electricity Industry © M..19.3 4 8 10 4 4 4.COM – Electricity Industry in the Public Sector in India .1 7 The majority of the consumers viewed the maintenance of transmission system in the K S E B to be either poor or very poor.21 2 0.7 14 18 18 16 16 15.Consumers ResponseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 1. 3 80 41 32. 2 0 26 8 19 0 4 0 6 0 0 7.4 0 5.0 7 2. Table 6.44 IDEAINDIA.20. Views on Maintenance of Transmission System .70 4 2. This will cause shortage of necessary spares and work force.33 2.05 7 Mean sig Not Not Not Sig Not Not Not Not |t| 0.5 19 22 32.10 5 0.5 41 40 Technical Employees Administrative employees Other Employees 7.2 0 2.6 20 15 36 32 48 40 48 46 53.5 9 8 11 7 8 20.2 8 2. Analysis of the reason for breakdown would be necessary to diagnose the shortage of maintenance. This question aims at evaluating the present level of maintenance.08 6 1.3 3 4 12 6 6 4.4 5.Employees and Experts No Response 0 0 3 Very poor Category Excellent Normal Good Total 100 100 100 Poor 28. Only a negligible segment of them had a different view. 2 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.36 2. Sarngadharan 2009 142 Stringent economic measures in public sector undertakings like the Kerala State Electricity Board will result in reduction in staff and purchases. 7 28 22 16 26 22 22.0 5 2. Views on Maintenance of Transmission System .4 0 5.1 4 2.471 Not Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 5.674 0.IDEAINDIA.1 6 2.777 1.5 24 19 2.4 12.02 4 0.1 9 2.12 1 0.63 4 0.

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Experts Total Source : Field Survey

2 6.8

3 8

15 19.4

43 36.2

37 29

0 0.6

100 100

1.90 2.27

3.179

Sig

A large portion of the employees and experts were of the view that the maintenance of the transmission system was not satisfactory. The statistical tests also confirm that similarity in the views of employees is significant. results.. Location of Sub Stations Like any other industrial concern the Kerala State Electricity Board also faces the managerial problem of plant location, in the case of generating stations and sub stations. It is an important managerial decision to be taken after consideration of a large number of factors as in the case of other industries. Plant location is the decision of selecting the geographical point at which the plant is to be erected, with the advantages of easiest access, economy in inward and outward transportations, least damage to the environment and minimum adverse interference from the environment, economy in land acquisition and construction costs, acceptance by the local public, availability of the infrastructural factors, easy availability of labour both in construction and in operation, and freedom from deteriorating chemical environment. Optimality in costs, both of erection and operation, is the key factor in plant location. Production, distribution and maintenance costs are to be minimised. There are no hard and fast rules with regard to location of plant. In practice, a large number of factors have to be considered while choosing a suitable location. These factors differ from location to location, and from time to time. That is why different economists have taken into consideration different factors to formulate their theories of location to explain the mechanism of location. The study of these factors helps selection of the most suitable locations for new plants. The normal factors considered while locating the ordinary industrial plants are availability of raw materials, labour supply, proximity to the market, transport and communication facilities, power and fuels, climatic consideration, external factors of environment, personal factors, strategic considerations, and cost of land and constructions In electrical sub-stations also, most of the factors are relevant but with necessary modifications
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Thus, the existence of serious shortfalls in the

maintenance of the transmission system of the K S E B can be confirmed from the survey

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to suit the peculiarities of the special product, electricity. The factors relevant here are availability and proximity of transmission and distribution lines (input and output lines), proximity of load centres (it is the market here), facilities like transportation, accommodation and recreation of staff, easier availability of cheaper land, in addition to the other normal factors. The K S E B being a public sector undertaking, many extraneous factors like political considerations can creep into the location decision. In this context, the optimality of location may not be possible always. Enquiries into the location decision were made to study this aspect. Table 6.21. Views on Location of Substations - Consumers ResponseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 0.122 2.025 0.243 1.134 0.252 2.034 0.229 0.207 |t| sig Not Sig Not Not Not Sig Not Not sig

Domestic 5.3 Commercial 4 Public lighting 8 Agriculture 0 Public Water Works 6 Industrial LT 8 Industrial HT 4.4 Others 0 Total 5 Source : Field Survey

5.3 3 4 14 6 4 4.4 0 5.4

12.7 9 18 16 18 32 15.6 20 15.6

16 11 18 14 36 16 33.3 80 19.2

21.3 28 24 12 24 12 17.8 0 20.8

39 45 28 44 10 28 24 0 34

100 100 100 100 100 100 100 100 100

2.30 1.98 2.36 2.57 2.27 2.72 2.26 2.20 2.31

The majority of the consumers, who provided answers to this question, viewed the location decision of substations to be either poor or very poor. An appreciably larger segment of the consumers opted not to answer this question. .

Table 6.22. Views on Location of Substation - Employees and Experts No Response Very poor Category Excellent Normal Mean Good Total Poor

Technical Employees 12.5 19.5 Administrative employees 10 16 Other Employees 12 17

26 24 28

31.5 10.5 35 15 25 15

0 0 3

100 2.92 1.998 Sig 100 2.71 0.297 Not 100 2.86 0.875 Not

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Experts Total Source : Field Survey

8 11

7 28 24 33 0 100 2.33 3.390 Sig 15.8 26.4 29.4 16.8 0.6 100 2.75

A good number of the employees and experts who constituted the majority felt that the substations were not located properly. Some of them found the location decision to be normal . The statistical test also confirms that similarity in the views of technical employees and experts are significant. Hence, the location of substations can be said to be not done properly in the electrical network of the Kerala State Electricity Board. Overloading of Transmission System Any system in an industrial or production process is designed to handle a particular load or capacity. As cost of the system increases with the capacity, it is essential from the economic point of view to have the minimum capacity to meet the needs. Here, the needs referred to above should be supplemented by a future projection to be considered. The cost of present construction, the cost required for necessary addition and the time by which the expansion will be necessitated have to be predicted in order to decide the capacity required. If the efforts to optimize the capacity lead to in-sufficient capacity in any point of time for a normal industry, it causes only deficient supply to meet the demand, which is not a very serious condition, and sometimes causes increase of the price. But, in the case of electricity, it leads to the very serious condition of total failure or breakdown of the system or remedies like load shedding, which means deprival of an essential commodity to the society by the monopolistic supplier. Accurate prediction of the future demand is a very complex question in the case of electricity. It occasionally fails due to various reasons like sudden growth and introduction of modern amenities. This eventually ends up in overloading of the system. Overloading causes heating of the electrical system which eats into life of the system. If overloading exceeds certain limits, the system fails, leading to breakdown which means total blackout to consumers. This happens quite often even in developed countries now a- days. Hence, detection of overloading and taking remedial measures are of utmost importance in the electrical supply industry. In order to avoid overloading, the system should have spare capacity and flexibility to meet eventualities. The higher the spare capacity, the higher will be the flexibility. A higher flexibility allows uninterrupted power supply even when part of
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the electrical network fails. In the Kerala State Electricity Board this sort of flexibility seems to be at the minimum level, as presumed from the higher incidence of interruptions. This means a situation in which the system is either overloaded or loaded to the brink of its capacity. Hence, a question on overloading of transmission lines was posed before the respondents of the survey. The results are tabulated in Tables 6.23 and 6.24

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Table 6.23. Views on Over Loading in Transmission System - Consumers ResponseNo Very High Very Low Category Normal Mean Total High Low |t| 0.446 1.084 0.423 1.28 0.881 1.313 0.153 0.127 sig Not Not Not Not Not Not Not Not
|t| 2.067 0.404 0.842 2.488

Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey

4.7 5 8 2 4 6 6.7 0 5

5.3 3 6 14 8 4 4.4 0 5.8

13 9 16 12 16 30 13 40 15

16 14 20 14 36 16 33.3 60 20

21 22 22 12 28 14 16 0 20

39.3 47 28 46 8 30 26.7 0 34.8

100 100 100 100 100 100 100 100 100

2.27 2.15 2.42 2.63 2.17 2.6 2.36 2.4 2.33

The majority of the consumers were of the view that overloading was low or very low.

Table 6.24. Views on Over Loading in Transmission System - Employees and Experts Very Very Not Category High High Normal Low Low Responded Total Mean Technical Employees 37.5 36 13.5 7 6 0 100 3.92 Administrative employees 32 30 14 8 7 9 100 3.79 Other Employees 29 32 16 6 12 5 100 3.63 Experts 25 27 25 12 11 0 100 3.43 Total 32.2 32.2 16.4 8 8.4 2.8 100 3.74 Source : Field Survey

sig Sig Not Not Sig

A good majority of the employees and experts identified heavy or very heavy overloading of the transmission system. Only a negligible section of them thought otherwise. Hence, serious overloading of the transmission system in the Kerala State Electricity Board can be identified as a major problem. The consumers, employees and experts who responded to the survey gave valuable comments on the organisational set up and capacity of the firm to cater to the modern needs of the society. This leads to some important conclusions on the present state of affairs. The size of the Kerala State Electricity Board was found to be too high for manageability. The composition of the top management is excellent but there is extraneous consideration in the selection. Too frequent changes affect their performance. The government’s close control
IDEAINDIA.COM – Electricity Industry in the Public Sector in India

The management exhibits excellent professionalism but has to induct more transparency in decisions.COM – Electricity Industry © M.IDEAINDIA. Though there is sufficient functional specialisation. and lack of commercial sense of operation hinders the financial performance of the Board. The forgoing analysis on the organisational pattern of Kerala State Electricity Board leads to the conclusions that the control mechanism of the State government contributes favorably to the operations of Kerala State Electricity Board. Sarngadharan 2009 148 over the functioning cannot be well appreciated. professionalism inducted in the top management is in favour of the performance of the organization. whether indigenous or foreign both generation and transmission capacities are insufficient. IDEAINDIA. Spares are available. but are of a poor quality. The selection of technology and fuels looks poor. The generation system has a considerable amount of outdated machines and is over-dependent on foreign technology. a commercial sense in operation is lacking. Public relations and staff pattern are areas requiring improvement.COM – Electricity Industry in the Public Sector in India . The transmission system is seriously overloaded and poorly maintained.

organisational environment. These variables include practices in revenue collection. collection is normally made through cash counters maintained at the distribution section offices. and financial viability of distribution sections. The cashiers receive the money after checking the genuineness of the amounts in the invoice against the office records.COM – Electricity Industry © M. soundness of billing practices. system for attending consumer complaints. Kerala State Electricity Board. Practices in Revenue Collection A commercial organisation cannot survive without sound and effective practices for collection of the revenue. If prompt in-flow of revenue is not ensured.IDEAINDIA. it was felt appropriate to ascertain the performance on the management of revenue by collecting the views of consumers. organisational culture. In the Kerala State Electricity Board. DD and money order also. If the payments due are allowed to be accumulated. overloading of transformers and distribution lines. training facilities for behavioural practices. although engaged in the production and distribution of electricity in the State as a public utility service entity. Payments of the bills are allowed by cheque. Such being the case. There are a larger number of counters depending on the total number of consumers under each section. soundness of accounting practices. which eventually causes collapse of the organization on account of increased outstanding debts and even huge bad debts. availability of proper technical training.COM – Electricity Industry in the Public Sector in India . attitude of staff to public. system for routing of distribution lines. they may become too big for the consumer to pay. effectiveness of accounting practices. cash flow management fails and it affects liquidity adversely in meeting the day-to-day expenses. The data collected in this regard are tabulated and analysed below. employees and experts on selected variables. Sarngadharan 2009 149 Chapter 7 PERFORMANCE IN MANAGING REVENUE The success of any organisation engaged in economic activities depends upon its performance in managing revenue. Another mode of collection is through the miscellaneous collection centres of the Information IDEAINDIA. cannot be an exception to this general rule.

but not facilities for standing in queues without disturbance from the sun and rain through out.85 2.72 2.71 Most of the consumers viewed the practices in revenue collection to be either poor or very poor.2 16 19 12 12 20 20 17.61 2.1. With regard to the convenience and amenities to the consumers.7 0 17. Facility for sitting in a queue.67 2.4 40 19. In all the cases. Table 7. IDEAINDIA. It works from 8 a.1 0 10 26. Some of them found them to be normal. so as to enable the consumers to remit the money in any section.4 10 9 10 12 10 10 11.60 2.IDEAINDIA.3 17 22 16 24 24 24. it is normally argued that they are insufficient. through a similar procedure. as in the railway reservation counters. The timings are also not convenient to the consumers who are employees.203 0.9 0 9. has not been provided here.69 2.666 0.m.924 0.COM – Electricity Industry © M.Views on Practices in Revenue Collection .4 15. known as FRIENDS.1 60 27.249 0. When the consumer makes the defaulted payment subsequently.4 100 100 100 100 100 100 100 100 100 2.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 0. there are long queues.421 0. Computerized networking has not been arranged.6 24 17 22 22 6 12 6.043 0.207 sig Not Not Not Not Not Not Not Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 8 10 12 10 10 10 8. for disconnection of electric supply to the consumers.m.64 2. on all weekdays including Sundays. The opinions of the respondents were sought to evaluate the merits of the practice presently followed in the Kerala State Electricity Board in revenue collection. The cash counters do not work on holidays. the reconnection is effected temporarily.90 2. Sarngadharan 2009 150 Technology Department of the Government of Kerala. the lists of defaulters are transferred to the Assistant Engineers. Quite often.540 0.7 28 22 28 30 24 31. to 7 p. If default continues for more than six months.COM – Electricity Industry in the Public Sector in India . the electric connection is cut off permanently.8 0 16.

the absence of very strong opinion on either side.Views on Practices in Revenue Collection .39 3 4. Here.Employees and experts Very poor responseNo Category Excellent Normal Mean Good Total Poor Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 13. Sarngadharan 2009 151 Table 7. there arises urgent need for revamping the system so as to make it more clients friendly. to be excellent or good. 5 46 14 12 30. It contains the quantity and details of the commodity. Considering the highly diverse opinions by the different categories.5 3 23 17 12 0 0 1 0 0. acceptable modes of payment and the consequences of non- IDEAINDIA. Soundness of Billing Practices Billing or invoicing the purchasers is one of the important operations of the sales process. the opinions of the employees and experts were found to be different from the observations of the consumers. it can be concluded that the practices in revenue collection in the Kerala State Electricity Board do not have any serious flaws. except consumer-friendliness.IDEAINDIA. the due date. It is the procedure of making the documentary demand to the purchaser for the price of the commodity sold to him. rate and amount due.6 3 2.8 3 3. 2 8. 5 8 27 23 16. Of course.1 8 2. Views of the consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the view is highly significant. 5 18 11 14 14 40. 6 26 25 24 34 27 11.6 8 2.07 8 4.COM – Electricity Industry in the Public Sector in India Sig |t| . Some of them found them to be normal and more or less an equal proportion of them felt them to be either poor or very poor. or the strong support by the ministerial employees.COM – Electricity Industry © M.56 9 2.2.3 9 3.2 10 0 10 0 10 0 10 0 10 0 3.91 6 Sig Sig Sig Sig The majority of the employees and experts rated the practices.

convenience to the organisation and its ability to ensure prompt payment. give him all relevant details. The respondents’ views on this aspect were collected for analysis. For High Tension consumers. the invoicing for consumers of low tension supply is done by the section offices. duty. the acceptable modes of payments. Sarngadharan 2009 152 payment. the reading taken from the energy meters installed in the consumer’s premises is taken by the meter reader and he provides the reading to the billing office. The billing clerk prepares the bill.COM – Electricity Industry © M. in order to avoid disconnection. The second method is called spot billing. There are two methods of billing from the distribution section offices. IDEAINDIA. the energy charges calculated at the prescribed rate. and after a checking by the billing superintendent. the due date of payment without fine. the invoicing is done from a central office. meter rent. the legal requirements.IDEAINDIA. The invoicing is done as per clause 24(1) of the Indian Electricity Act 2003. in which the meter reader himself prepares the bill on the spot of taking the meter reading and serves it to the consumer then and there.COM – Electricity Industry in the Public Sector in India . The invoice contains the name and consumer number. A good invoice shall be simple and understandable to the consumer. and the post number from which the consumer is given connection. The process of billing has been computerized in selected sections and computer-generated bills contain more details like the average consumption for the previous months. fine and interest for past belated payments. In one method. The billing practices followed have to be evaluated with regard to the convenience of the consumer. name of the person preparing the invoice. other dues like fixed charges. and motivate him for prompt payment. The readings taken for the consumers throughout the state are transmitted to this office situated at Thiruvananthapuram. the invoice is served to the consumer through messengers. which gives the electricity supplier the powers to charge and enforce the payments. details about arrears if any. and the date on which the payment has to be made with penalty. This method is used for the LT industrial consumers. the initial and final reading of the energy meters installed in the consumers’ premises. and information on facility for advance payment. based on which the invoice-cumdisconnection notice is served. In the Kerala State Electricity Board. and the invoice prepared at the office is sent to the each consumer by post. details regarding the fine and interest that would be charged if payment is not made before the last date prescribed. It also contains information such as reference to the clause of the Indian Electricity Act.

Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 0. 5 46 11 10 26 25 24 32 8 1 23 18 0 0 6 0 IDEAINDIA.8 9 2.2 24 17 26 26 10 12 6.5 20 11 14 39. 2 0 17.6 2 2.78 2 0. Many of the respondents stated their ignorance on this aspect.4 1 3.7 19 12 12 20 20 17. 1 100 27 14 15 18 16 24 24 22.IDEAINDIA.46 3 0. 4 14.7 3 2. 1 0 10 10 11 12 12 10 10 11.COM – Electricity Industry © M. 6 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. Table 7.53 5 sig Not Not Not Not Not Not Not Not Sig Sig Sig Sig sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field Survey 10.Views on Soundness in Billing Practices .3. 7 28 22 24 26 24 31.46 0 4.7 7 The majority of the consumers found the billing practices of the K S E B to be far from satisfactory. 1 0 10.41 0 |t| 2.7 4 3.8 0 16. that is.61 9 0.0 0 2.6 1 2. either poor or very poor.7 6 Good Total 10 0 10 0 10 0 10 0 Poor 12 8 25 26 Technical Employees Administrative employees Other Employees Experts 14.15 9 0.4.COM – Electricity Industry in the Public Sector in India . Sarngadharan 2009 153 Table 7.7 0 18.8 4 2.8 6 2.59 3 0.7 6 2.81 8 0. 6 26.24 7 0.6 0 2. 7 10 10 10 10 10 11.73 0 3.Employees and experts responseNo Very poor Category Excellent Normal Mean 3.64 2 4.Views on Soundness in Billing Practices .

Judgment is required for selecting and applying those which are appropriate to the circumstance of the enterprise. the opinions of the employees and experts were found to be different from the opinions of the consumers. bases. There are many different accounting policies even in relation to the same subject.6 1.COM – Electricity Industry © M. that is. ‘Accounting polices encompass many principles. 6 16. it is fair to conclude that the billing practices in the Kerala State Electricity Board are more or less satisfactory. conventions. Consideration shall be given to the relevant factors by the management in the selection and application of the appropriate accounting policies and practices. 2 26. 6 11. they need a critical examination with regard to its consumer friendliness Soundness of Accounting Practices Proper accounting policies are one of the major prerequisites of successful financial management. Here. However. Hence.8 29.COM – Electricity Industry in the Public Sector in India . To quote the International Accounting Standards Committee. Sarngadharan 2009 154 Total Source : Field Survey 14.1 9 Views of the majority of employees and experts were opposite to what was stated by the consumers. They rated the billing practices to be excellent or good. being a public utility. rules and procedures adopted by management in preparing and presenting financial statements’.4). It may also be noted that the published accounts of electricity companies are to be drawn up in accordance with the requirements of the Companies’ Act 1956 read with the Indian Electricity Act 1910 and IDEAINDIA. the Indian Electricity Act 1910 and Electricity Supply Act 1948. The statistical test also confirms that similarity in the views of employees and experts is significant (Table 7. is kept in the State ownership for control by the government. This is a variable requiring more weight to the views of employees rather than of consumers.IDEAINDIA. The business of electricity supply. Accounting policies represent choices among the different accounting methods that can be used in recording financial transactions and preparing financial statements.2 10 0 3. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the view is highly significant. Accounting policies are the specific accounting principles and the methods of applying those principles that are considered by a business concern to be the most appropriate for ascertaining working results and financial position. The business of electricity is subject to two enactments.

30 6 1.77 2 1.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 0.8 9 2.9 8 2. pleading their ignorance of the subject matter. 2 40 16.5 3 2. This question aims at evaluating the situation through assessment by the respondents.09 1 0. This annexure is based on Double Accounting System.6 0 2. the legal requirement necessitates the State Electricity Boards to make a specified surplus. 7 60 27. 7 14 12 12 10 12 8. A sound accounting practice here means one capable of fulfilling the above requirements.9 0 11.5 and 7. The results of the survey are shown in Tables 7. A large number of consumers opted out of the question.2 23. 7 0 10.6 8 2. 6 12 12 18 16 24 24 22. 4 28 32 24 24 26 24 26. Sarngadharan 2009 155 Electricity Supply Act 1948.57 1 0.6. that is. 6 14 15 12 12 22 18 17. the amount of which is changed from time to time through orders or legislations.COM – Electricity Industry © M.Views on Soundness of Accounting Practices .5 7 2. 8 0 18. It helps effective financial management of the organisation to achieve the specified financial objectives. the accounting system shall be capable of helping the Kerala State Electricity Board for its commercial operations.25 9 0.40 5 sig Not Not Not Not Not Not Not Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 12 13 12 10 8 10 6.IDEAINDIA. Table 7.5. The accounts are prepared in the prescribed format as set in annexure V to the Indian Electricity Rules 1956.86 8 1.9 3 2.8 0 15. Moreover. In addition to complying with the legal requirements.8 3 Majority of the consumers who responded to this query viewed the accounting practices of the K S E B to be bad.9 2 2. IDEAINDIA. 4 Total 11 Source : Field Survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.COM – Electricity Industry in the Public Sector in India . either poor or very poor.46 9 0. 3 14 22 26 10 12 17.

it was attempted to analyse the collection and follow-up of unpaid bills only.40 9 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 16 20 14 12 15. Sarngadharan 2009 156 Table 7. In the Kerala State Electricity Board the collection of bills is done at the specified collection centres only.Views on Soundness of Accounting Practices . The revenue collection process involves pricing. the exposure of the consumers would naturally be limited on the aspect.2 1 Sig Sig Sig Sig The majority of the employees and experts felt the accounting practices to be excellent or good. Its revenue includes the price of electricity IDEAINDIA. Hence. 6 8 4 23 24 13.6 9 2. invoicing.6 6 3. 6 41 45 12 12 30. 4 9 8 20 22 13. simply. as other attributes are analysed elsewhere. 4 0 0 4 0 0. it is the price paid for it.77 8 4. 2 26 23 27 30 26.82 2 3. As the question was about accounting practices. The statistical test confirms significant similarity in the views of employees and experts.COM – Electricity Industry in the Public Sector in India sig .03 2 3. the opinions of the employees and experts were found to be contradictory to the observations of the consumers Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the view is highly significant. Here. it can be concluded that the accounting practices in the Kerala State Electricity Board are fair. Revenue here means the money the customers pay in exchange of the product.6.Employees and Experts responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 3. accepting the comments of the employees and experts Effectiveness of Revenue Collection Revenue is the backbone of any commercial operation.8 10 0 10 0 10 0 10 0 10 0 3.4 8 3.IDEAINDIA.7 3 2. Some of them found them to be normal. Or.COM – Electricity Industry © M. collection and steps to realize unpaid bills. Here.

and permanent removal of the connection afterwards. it should have certain characteristics. Options to the customers.IDEAINDIA.COM – Electricity Industry in the Public Sector in India sig . and sale proceeds of materials and scraps. convenient payment methods like on-line payments. Systems to check the effectiveness as well as to eliminate fraudulent practices should be in operation.COM – Electricity Industry © M. Sarngadharan 2009 157 sold and other miscellaneous receipts. as well as the very existence of the Kerala State Electricity Board. this question was included in the survey for exploring the responses of the stakeholders.7 and 7. named ‘FRIENDS’. the accounting and supervisory staff. Revenue recovery with the help of government would be resorted to afterwards. It should be simple for both the staff and customers. Though many departments have introduced collection through banks. and use of electronic cards will enhance the quality of collection mechanism. disconnection of the service after that period. Suitable feedback mechanism to detect defects and flaws and to devise modifications in the present systems should be put into operation. For a collection mechanism as well as procedure to be effective. The effectiveness of a collection system can be measured by the promptness of collection or the reduction of defaulters. The timings shall be convenient to the customers and acceptable to the staff. The method followed in the Kerala State Electricity Board is that of imposing a penal interest and a fine for the first few days. depends on the effectiveness of revenue collection. The cashiers.8. As the financial viability. Views on Effectiveness of Revenue Collection . such as charges for services. The responses gathered in this regard are given in Tables 7. The system should also have the mechanisms to follow up the default and to ensure the payment by the defaulters. the Kerala State Electricity Board is yet to start it. and through miscellaneous collection centres of the Information Technology Department of the Government of Kerala.7. collection centres. The revenue is collected at office counters. and the field staff to disconnect and reconnect the supply form the parts of the revenue collection mechanism in the Kerala State Electricity Board.Consumers No response Category Excellent Normal Mean Good Total Very poor Poor |t| IDEAINDIA. Table 7.

29 2. 4 Total 9. Some of them found it to be normal.476 Sig 2.71 A large number of the consumers rated the effectiveness of revenue collection in the K S E B to be either poor or very poor.7 0 22. 3 22 20 22 18 22 20 40 21.537 Not 2.90 1.145 Not 2.121 Sig 2. 1 60 20. 3 13 10 8 4 4 6.404 Not 2. 9 0 7.7 0 23.COM – Electricity Industry © M. IDEAINDIA.18 2. 8 12 14 24 20 36 24 31.884 Sig 2.8 Source: Field Survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 3.7 0 18.IDEAINDIA.30 2. Sarngadharan 2009 158 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 13.69 0. 6 23. 3 24 20 22 10 10 6.40 0. 2 14 23 26 24 32 28 26.64 0.12 3.2 14 4 0 4 0 12 8.COM – Electricity Industry in the Public Sector in India .061 Sig 2.352 Not 2.

80 0 5.2 7 Sig Sig Sig Sig A good number of the employees and experts found it to be sufficiently effective. The idea behind keeping this industry in the public sector is to provid maximum service to the public at large. 4 6 5 19 24 12 0 0 3 0 0. The opinion of the different segments cannot be neglected as they are formed from two different angles. which demands transferring electricity industry to the private sector.4 42.IDEAINDIA. globally.6 1 2.11 0 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 17. a new way of thinking is getting strengthened in many circles. Sarngadharan 2009 159 Table 7. The statistical test points out that similarity in the views of employees and experts are significant.6 4 3.57 4 2.COM – Electricity Industry © M.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 3.5 18 12 12 15.9 2 2. The enactment of Indian Electricity Act 2003 and the subsequent restructuring efforts point to this direction. 6 10 0 10 0 10 0 10 0 10 0 3. as the consumers are found not satisfied with the system.8) The two groups are thus giving contradictory opinions.COM – Electricity Industry in the Public Sector in India sig . But it requires extensive study to identify flaws. (Table 7. 5 44 24 12 33 26 24 24 28 25.8. Though the Government of Kerala IDEAINDIA.5 8 3. Currently. 6 8 9 18 24 13. As the majority of the administrative employees as well as technical employees did not see any problems. Views of the consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the views is highly significant. Attitude of Staff to Public Electricity industry has been governed by the state. it is but quite natural to conclude that there are no serious drawbacks in the system.Views on Effectiveness of Revenue Collection .81 3 2.

the Kerala State Electricity Board management shall make a conscious effort for shaping the attitude of the staff. motivation. IDEAINDIA. its evaluation shall be made from different dimensions. Since the attitude of the staff to the public is a parameter in the dealings between staff and the public. as per its declared mission. Rather than leaving this aspect to natural formation. being a public utility service serving a large number of consumers.IDEAINDIA. and attitude of society to the staff. was made through obtaining the respective responses. the attitude of the staff to public is a sensitive element in the successful operation of this public sector undertaking. morale. Sarngadharan 2009 160 and the Government of India are in the process of considering this argument. attitude of the management. In Kerala. should have a standard and policy for the staff to deal with the public.10. environment. including the consumers and the staff. The attitude of the staff shall be moulded to the required manner. If the organisation has to become consumer-friendly.COM – Electricity Industry in the Public Sector in India . causing a vicious circle damaging the whole scenario. It has a strong bearing with the parameters like dedication. it points to the shortcomings in the behavioural training.COM – Electricity Industry © M.9 and 7. Thus. the state government and the major political parties are in favour of retaining the State Electricity Board as a public sector undertaking. that is the consumers and the staff. organisational culture. The Board. the experts. The attitude to public is the visible sign of the mental attitude of the staff towards the organisation and the society. the results of which are shown in Tables 7. much has to be done in this regard. and from a third angle. If there is any flaw in the attitude. A careful evaluation of this attribute from both the ends. the final decision lies in the hands of the public. Any problem in any of the parameters can initiate chain deterioration.

24 2.84 8 2. A good majority of them found it to be either poor or very poor.22 8 1.48 2.33 It is interesting to note that the number of consumers who found the attitude of the staff to the public as excellent was zero. 4 22 19 14 20 18 14 11.10.25 2.17 9 1. Some of them however. 7 26 28 24 30 34 33.Views on the Attitude of the Staff to the Public .58 3. 5 31 35 46 38 40 8 19 14 4 9 7 Total 10 0 10 0 10 0 Poor 3.31 3. 3 40 28.1 0 18 0 0 0 0 0 0 0 0 0 Total 0 Source : Field Survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.07 9 0.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 1.9. The statistical test also reveals that the similarity in the views of various categories of consumers do not vary significantly.16 3 Mean |t| 2. 2 41.Views on the Attitude of the Staff to the Public .20 2. found it to be normal.23 6 1. Table 7.Employees and experts responseNo 0 0 0 Very poor Category Excellent Normal Good Technical Employees Administrative employees Other Employees 4. Sarngadharan 2009 161 Table 7.70 7 0. 8 20 42.25 2.34 2.15 IDEAINDIA. 4 26. from a total of 500 of them.IDEAINDIA. 5 3 4 37.13 2 sig Not Not Not Not Not Not Not Not Sig Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 0 0 0 0 0 0 0 0 10 9 10 10 12 14 17.COM – Electricity Industry © M. 8 40 11.78 5 0.36 2.13 5 0. 3 46 48 46 40 38 37.88 9 0.00 3.COM – Electricity Industry in the Public Sector in India .

refers to attending mainly complaints regarding interruption of power supply. There can be other complaints also. Attending consumer complaints. Sarngadharan 2009 162 Experts Total Source : Field Survey 0 3. The statistical test also reveals that the similarity in the views of various categories of employees and experts except technical employees do not vary significantly.05 3. 8 11 12 8 6. 6 49 43. the maintenance of uninterrupted power supply attains utmost importance. and documenting the complete process for analysis and future guidance. Because of the complexities of the multi-voltage electricity distribution system. the consumers’ views need an added weight as it is a first hand evaluation of the staff behaviour. Considering the necessity of electricity in-day-to-day life as well as its importance in the growth of economy. arranging the necessary transportation. Attending consumer complaints can be considered to be involving only works in IDEAINDIA. planning and supplying necessary work force. and complaints about hindrances from the electrical system. metering complaints. ensuring safety to the staff and public. here. inventory control.COM – Electricity Industry in the Public Sector in India . simpler arrangements prevalent in earlier days cannot work satisfactorily now.IDEAINDIA. 2 32 34.23 4 Not The highest segment of the employees and experts rated it to be normal. Here.16 1.4 0 0 10 0 10 0 3. monitoring the progress and completion of work and arranging corrective measures in the case of deviation from planned progress. System for Attending Consumer Complaints The Kerala State Electricity Board is basically a utility service serving one of the important needs of the society. This leads to the conclusion that the attitude of the staff in the K S E B is not acceptable to the public. The second highest group found it to be excellent or good. analyzing. The consumers thus differed with the employees and the experts in their views. like billing complaints. arranging the rectification work with proper supervision. localizing and prioritizing them.COM – Electricity Industry © M. An ideal system for attending consumer complaints comprises a mechanism to receive and register the complaints. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the views is highly significant.

A modern arrangement with communication and transportation facilities. There exists a general notion that the system for attending consumer complaints in the Kerala State Electricity Board is not effective.12. is being tried by the Kerala State Electricity Board on an experimental basis.IDEAINDIA. Table 7.205 1.COM – Electricity Industry © M.205 0. One major drawback of the system is the absence of a communication mechanism through which the personnel who have gone to the field can be informed of subsequent complaint. called section offices. The data collected in this regard are tabulated and presented in Tables 7. The system already prevalent in the Kerala State Electricity Board involves providing a complaint register in the basic unit offices in the distribution sector.3 2 0 4 4 8 8.9 5.4 5.333 sig Not Sig Not Not Not Not Sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT 6 3 0 0 0 0 4.16 2.3 4 35 18 36 16 28 24 40 28 36 26.11 and 7.61 1.821 1. The system known as Trouble Call Management System is.72 2. The person responsible for attending the complaint notes down the complaint directly from the complaint register goes to the field and rectifies the complaint. It was attempted in the present study to verify whether there was any truth in this general notion.COM – Electricity Industry in the Public Sector in India . The complaints are serially numbered and are assigned token numbers. Sarngadharan 2009 163 distribution systems.00 2.11.38 IDEAINDIA. in the experimental stage and has been implemented in limited areas only.Views on System for Attending Consumer Complaints . as works in generation and transmission are initiated not in response to consumer complaints. along with a control room functioning round the clock and fault rectification teams.149 2.951 3.804 1. however. The process of complaint registering and rectification is overseen by supervisory personnel.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 0. to facilitate monitoring of the rectification work. Complaints received over telephone lines are also registered by a member of the staff who is designated for the duty.3 39.7 40 44 56 46 52 32 28 20 0 0 0 0 0 0 0 100 100 100 100 100 100 100 1.72 1.90 1.

COM – Electricity Industry © M.4 20 80 13.89 0.IDEAINDIA. The majority of them viewed this as either poor or very poor.11). Sarngadharan 2009 164 Others Total Source : Field Survey 0 2.8 0 4.6 37.708 Not The consumers recorded their very strong dissatisfaction with the system for attending complaints. The statistical test also reveals that the similarity in the views of various categories of consumers except commercial and industrial HT does not vary significantly (Table5.2 0 42 0 0 100 100 2. Only a negligible section of them had a different opinion. IDEAINDIA.20 1.COM – Electricity Industry in the Public Sector in India .

Some of them found it to be normal. Sarngadharan 2009 165 Table 7.Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 4. the consumers’ views deserve more consideration since they are at the receiving end. Availability of Proper Technical Training The Kerala State Electricity Board is a highly technical organisation.5 13 13 16 10. IDEAINDIA. Apart from this.COM – Electricity Industry © M. the electrical network has become vast and complex.7 8 3. The design. 2 32.61 9 0. 5 26 24 10 25 25 26 25 34 27 6 15 14 30 14.IDEAINDIA.3 2 2. J. With the rapid growth of consumers across of the state.3 6 Sig Not Not Sig The majority of the employees and experts regarded the system to be excellent or good.35 2 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 31 20 24 10 23. 2 5. Here. commissioning and maintenance of the modern complex system. call for extensive technical training to the personnel working on the system (Gerald.2 5 3. the most modern control and protective techniques are vigorously inducted in to the Kerala’s power system. it may be concluded that the present system for attending consumers’ complaints need thorough modification to suit the requirements of the consumers.86 6 0. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the view is highly significant.COM – Electricity Industry in the Public Sector in India sig .31 5 5.6 8 3. The statistical test also confirms that similarity in the views of technical employees and experts are significant. Here it is observed that the two groups have varied views. 6 0 0 0 0 0 10 0 10 0 10 0 10 0 10 0 3. construction. Hence. 1985).12.Views on System for Attending Consumer Complaints . Cohen. The use of much modern electronic household equipment is reported to affect the quality of the power system.

for both participants and the organisations. Organisations strategy and employees needs should be addressed simultaneously.15 IDEAINDIA. It prepares the employees for advancement of career. implementing it. designing and developing instruction. do or advance the job and thereby contribute to the overall development of the workers’ (Davis. The extent of the present level of technical training was evaluated here. 7 18 0 6 0 4 10 0 10 0 10 0 10 0 10 0 10 2. knowledge and skill. Laura L Bierema opines that ‘Training becomes more effective when it is explicitly linked to organisational strategy and is targeted at problems that can be resolved by training’ (Laura. The training process involves analyzing the needs.18 3. monitoring and improving the process. & Davis.Consumers No response Category Excellent Normal Mean Good Total Very poor Poor |t| 3. selecting solutions. Technical training is necessitated because of induction of newer machines. R. 7 13 30 24 28 30 23. Bierema.26 3 2. organisational development.3 10 18 22 20 24 14. It provides performance enhancement to the organisation as well as to the individual. deriving instructional outcomes. Successful training initiatives depend on taking a systematic approach to deliver instructions that are effective. The results of the survey are depicted in Tables 5. expertise.57 3.13 4 2.52 2. Sarngadharan 2009 166 Training is any formal activity to improve current employee’s job performance.IDEAINDIA.30 3. and instructional systems development. equipment.10 5 1. Table 7. 3 29 16 16 18 18 22 19 14 14 10 10 20. 2000).Views on Availability of Proper Technical Training . 1998). J. L. It involves individual development.46 8 1. B.13 and 5. on both professional and personal levels. Davis and Davis define training as ‘a process.15 3. through which skills are developed.COM – Electricity Industry in the Public Sector in India . information is provided and attitudes are matured to help the organisation to help the workers to qualify for a job.24 7 1.13. A. not a programme to be completed.14.26 sig Sig Sig Not Not Sig Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT 10 11 22 18 24 14 9.COM – Electricity Industry © M. procedures in erection and maintenance and newer concepts. career development.

COM – Electricity Industry © M. The statistical test confirms that similarity in the views of technical employees and experts are significant.82 9 0.7 9 2. 2 8 15 11 32 14. Only a very small section of them found it to be good or excellent. Views of the consumers and experts and employees were found divergent and when subjected to Z test depicts that the dissimilarity in the views is highly significant.27 2. Table 7. The slight swing of the experts towards the consumer side is also needs IDEAINDIA. 2 8. A still bigger number of them found it to be normal.17 4 Not Not A few of the consumers found the availability of technical training to be excellent. It is worth mentioning that a large number of the consumers didn’t respond to the question. it would not be wrong to neglect the contradictory remark from the consumer segment. good or at least normal.90 0 1.Views on Availability of Proper Technical Training .51 8 0.0 5 2. 5 28 45 9 35. 4 0 15.IDEAINDIA.81 2 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 7 12 10 0 7. 4 22.9 0 16 0 0 10. 8 0 24. 3 80 22 15. 4 33. Here. 6 47. 6 20 21.03 1 1.6 6 3. Sarngadharan 2009 167 Industrial HT Others 17.37 1 3. considering the poor access of the outside people to the state of affairs with regard to subjects like technical training.COM – Electricity Industry in the Public Sector in India sig .3 0 2.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 4.14. 5 16 10 9 16 0 0 0 0 0 10 0 10 0 10 0 10 0 10 0 2.80 2. 8 Total 15 Source : Field Survey 0 10 0 10 0 10 0 3. 8 15 29 24 50 26.6 2 Sig Not Not Sig The majority of the employees and experts saw the technical training in the organization to be poor or very poor.

There is no guarantee that this personal objective gives him any desirable output or advancement. This objective is best achieved when employees have to learn a skill task or procedure such as how to apply a total quality tool or test (Ellen.organisational and organisational – consumer domains. environment. Such training is essential to create a suitable organisational culture. but also of managing and dealing effectively with the whole matrix of the society. methods and techniques. The Kerala State Electricity Board personnel have not only the complex task of installing. formal education.COM – Electricity Industry in the Public Sector in India . 2000). family environment and work environment. IDEAINDIA. Earnst Kossek Richard. such as intra -organisational. There are some mechanisms existing within the Kerala State Electricity Board and the organisation is utilising the training efforts of certain external agencies like the Institute of Management in Government.COM – Electricity Industry © M. The natural model of behaviour so shaped may not be in the direction of the organisational strategy and objectives. In order to have expected outcome from an organisation employing human resources. Sarngadharan 2009 168 special attention. The behaviour of a human being is programmed and moulded from the early days of his life.IDEAINDIA. commissioning and maintaining modern systems and machinery. The management has to intervene and to provide orientation to ensure proper behavioural practices. and atmosphere within the organisation. peer mix. Training Facilities for Behavioural Practices Behavioural training aims at the development of competence in the actual performance of procedures. environment. the behavioural practices cannot be left to natural shaping and orientation. National Power Training Institute. It can be concluded that the technical training in the Kerala State Electricity Board is not sufficient to cope with the changes in technology. This calls for well-designed and structured training for giving the personnel not only the proper orientation but also the skill and ability to maintain a standard well-trimmed behavioural practice in conformity with the organisational objectives.perceived individual objectives. It is oriented to match his self. inter . A proper behavioural practice has to be ensured in the workplace as well as in the consumer relations. and Administrative Staff College of India for this purpose. N. It calls for a very extensive and comprehensive training for the employees in behavioural practices in different situations. operations.

COM – Electricity Industry © M. The results of the questionnaire survey are given below in Tables 7. the task of providing sufficient training may not be fully achieved.IDEAINDIA.16 IDEAINDIA. The amount of training which is provided is evaluated from the answers given by the respondents. Sarngadharan 2009 169 With the limited human resource management efforts of a public sector undertaking like the Kerala State Electricity Board.COM – Electricity Industry in the Public Sector in India .15 and 7.

13 9 4.Consumers No response very poor Category Excellent Normal Mean Good Total Poor |t| 3.81 1 0.3 11 18 22 24 20 26.COM – Electricity Industry in the Public Sector in India Mean Good Total Poor . 3 80 22.59 3 1.S.8 8 The customers were asked to specify as to how they felt the behavioral practices of the personnel of K. 5 47. 2 20.8 0 2. The highest number of consumers who responded to this question felt the aspect to be either poor or very poor.0 0 3.2 2 3.4 5 2.16. A large number of consumers remarked that they have nothing to offer in this regard. Table 7.80 6 1.4 9.95 5 0.66 8 0.54 1 1.Views on Availability of Training in Behavioural Practices . Sarngadharan 2009 170 Table 7. 7 19 0 6 0 12 0 0 11.3 8 3.25 5 |t| sig Sig Not Not Not Sig Not Not Not Sig Sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 8 11 22 18 24 10 15. 7 0 15.2 7 2. Almost an equal number viewed the attribute to be excellent or good.23 IDEAINDIA.COM – Electricity Industry © M. 8 15.E. 8 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.B. 7 28 12 16 14 16 17.Employees and experts responseNo Very poor Category Excellent Normal Technical Employees 5 8 15.6 0 13. 5 24 0 10 0 2.0 6 3. 6 22 18 14 18 10 12 6.15.IDEAINDIA.94 4 2.Views on Availability of Training in Behavioural Practices .6 2 3. 3 13 34 20 28 30 33. 2 24. 8 20 20.7 0 16.

namely. internal factors are referred to as organisational factors.55 1. demographic factors. 6 31 24 50 27.98 2. the organisational environment. The internal environment. the only alternative before them is to adapt the organisation to suit the external environment. Views of consumers and experts and employees when subjected to Z test reveals that the similarity of both the groups is significant Thus. structural IDEAINDIA. Organisational Environment Apart from factors like motivation. The external factors.71 4 0. Only a negligible number found them to be excellent or good.60 2. Sarngadharan 2009 171 Administrative employees Other Employees Experts Total Source : Field Survey 9 7 0 5.74 2. 2 16 12 29 14. dedication.IDEAINDIA. physical facilities. like the marketing mix. includes its personnel.COM – Electricity Industry in the Public Sector in India . socio-cultural factors. that is. skill and ability. the organisational environment is also one of the decisive factors in the performance of employees. government and legal factors. priorities. and geophysical factors. The statistical test also confirms that similarity in the views of technical employees and experts are significant. 8 0 1 0 0. Since the organisation has to function and survive in these environments.COM – Electricity Industry © M. it may be observed from the results that the methodology of the K S E B for imparting training in behavioural practices is not effective and needs reorientation and restructuring. not controllable by the management. Some of them found them to be normal. which the management cannot change. The internal environment can also be modified through specific and concrete interventions to face the realities and challenges outside. 2 10 0 10 0 10 0 10 0 2. business policy and the organisational functional means.91 5 Not Not Sig Most of the employees and experts identified flaws in the training efforts of the Kerala State Electricity Board. The main difference between internal and external factors is that the former category is controllable and the latter category is uncontrollable. the internal factors and external factors. include the economic factors. 2 28 46 11 36 16 10 10 16. the business domain of the company. business philosophy. Of the environmental factors affecting the business decisions and operations.39 1 3.

77 8 2.19 6 0. financial factors. 1 80 24 28 12 16 8 16 13. The organisational structure. 7 19 10 6 4 12 6. Table 7.IDEAINDIA. and extent of professionalism in management have a strong role in the performance of the organization.7 14 22 18 28 10 15.00 1 1. 6 0 8.Views on Organisational Environment . share holders.8 IDEAINDIA. Sarngadharan 2009 172 design.1 1 3. Hence. along with the support given in the opposite direction. and career development.0 0 3. Physical assets and facilities. technological advances and capabilities.25 3 0.COM – Electricity Industry © M. Even active personnel can become lazy in a negative environment and vice versa. the mode and level of performance he is expected to present in the organisation. Characteristics of human resources like skill.18 contain the tabulated results. 9 0 15. commitment.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 4. morale.7 10 18 18 24 20 28. inter-personal relationship.4 0 20. that is the top management to the staff.17. The environmental factors inside the organisation have an important role in the performance of the organisation. board of directors and lower level of workers.COM – Electricity Industry in the Public Sector in India . and company image among the consumers are also important environmental factors. compensation packets. 3 11 30 28 28 30 31. The environmental factors prompt an employee through implied suggestions.5 8 3.7 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 2.4 0 2.3 8 3. The organisational factors like amount of support the top management enjoys from other sectors namely.84 7 3. and attitud have also a nominal say among the organisational factors affecting the performance.6 8 3. internal assessment and rewards.4 5 2. composition of board of directors.23 sig Sig Not Sig Not Sig Not Sig Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 8.33 8 0.17and 7. an assessment of the organisational environment was tried through the questionnaire and Tables7.28 9 2. interweave each other to form the internal environmental platform. quality.7 18 8 14 8 12 4. internal research and development system. 3 20 22.

4 15 13. A negligible number opted out from answering the question.COM – Electricity Industry in the Public Sector in India . 8 0 10 0 0 2.COM – Electricity Industry © M. IDEAINDIA.9 4 9 More consumers saw it as either poor or very poor than those who saw it as good or excellent.IDEAINDIA. 2 22 19. Sarngadharan 2009 173 Total 15 Source : Field Survey 15.

While speaking about culture. Sarngadharan 2009 174 Table 7. the differing ways of doing things. the culture of an organisation is its dominant pattern of shared beliefs and values. C. 4 10 27 18 60 25 53. it should be noted that it cannot be precisely defined as it is something that is not perceived. 6 10 0 10 0 10 0 10 0 10 0 2. 5 10 7 0 5. but something felt.COM – Electricity Industry © M. of individual freedom of kinds of personality’ (Handy. Organisational Culture It is not possible to underestimate the influence of the organisational culture in any consideration of how organisations work. The statistical test also confirms that similarity in the views of employees and experts are significant. 5 29 48 15 39.IDEAINDIA.COM – Electricity Industry in the Public Sector in India Sig |t| .358 0. 1997). Views of consumers and experts and employees when subjected to Z test bring about the fact that the similarity of both the groups is significant.80 2. Handy points out that ‘anyone who has spent time with any variety of organisations will have been struck by the differing atmospheres.71 2.368 2.18.53 2. Only a negligible number found it to be excellent or good. The different categories were found to agree in their opinions.Views on Organisational Environment . In essence. 8 25 18 12 10 18 0 0 3 0 0. Some of them found it to be normal.633 3. This is an important matter which should be assigned priority in initiating corrective measures. The important point about culture is that while there may be striking differences between IDEAINDIA.13 2.Employees and experts No response Very poor Category Excellent Normal Mean Good Total Poor Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 4.46 4.196 Sig Sig Not Sig Most of the employees and experts found the organisational environment to be either poor or very poor. the differing level of energy. 2 7 16 12 15 11.

and policy statement are among the various sources for identifying organisational culture.30 2 0. The purpose and goals initially trigger the organisation’s culture that the founders or their successors want to see.7 2 3.4 9 2.4 9 2. The factors affecting the organisational culture.30 5 2. communication channels.20 Table 7. Gareth. A. include purpose and goals. external environment. role culture. namely.31 2 sig Sig Not Not Not Sig Not Sig Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 8 14 18 18 24 12 15. 6 0 8. power culture.4 0 26 24 16 22 16 14 17. Hence it was tried through the survey. task culture and personal culture. To evaluate the organisational culture should be an important effort in the present research study. 7 0 14 11 30 24 24 26 26.Views on Organisational Culture . The dominant culture that develops in an organisation is primarily the product of the aims and methods of its founders. or of their successors in senior management.96 1 1. corporate aims. The extent to which it is achieved depends on other factors. The managers should identify or recognize the organisational culture.COM – Electricity Industry in the Public Sector in India .IDEAINDIA. It will be latent in every aspect of the organisation. as enlisted by Cole. Sarngadharan 2009 175 organisations.0 5 3. there is a shared understanding within them. combined with their interaction with a variety of internal and external factors. shared understandings and shared sense making’ (Morgan.2 6 3. 7 80 24 23 12 14 8 16 8. Morgan describes ‘culture as shared meaning.19and 7.COM – Electricity Industry © M.71 8 1. 8 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. use of technology.82 1 1. The results are tabulated in Tables7. rules and procedures. 1986).Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 3.33 4 0.7 10 18 14 24 20 26. decision making mechanisms.28 0 3. The organisation’s mission statement. G. organisation structures and organisation policies.3 18 6 8 4 12 4.19. employee skills and attitudes.8 0 IDEAINDIA.6 7 3.3 6 3.9 20 19. Handy identifies some key aspects of culture.

IDEAINDIA.COM – Electricity Industry in the Public Sector in India . 8 12.9 8 This was another question in which many consumer respondents pleaded ignorance.IDEAINDIA.COM – Electricity Industry © M. A large number of respondents who provided answers to this were of the view that the organisational culture of the K S E B as either poor or very poor. 6 20 17. Some of them found it to be normal.8 21 10 0 2. Not a negligible number rated it to be either good or excellent. Sarngadharan 2009 176 Total 14 Source : Field Survey 14.

System for Routing of Distribution Lines Transporting a product from the point of production to the point of consumption is one of the major tasks to be attended by any industrial organisation. 8 10 28 18 60 25.42 8 2. The statistical test also confirms that similarity in the views of employees and experts is significant.13 8 0.6 9 2.COM – Electricity Industry © M.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 4. The production may be in a number of centres at different geographical locations and the same is the case with location and concentration of consumers.20. should not be denied the availability of the product if the firm has sufficient capacity. 5 29 48 13 39. IDEAINDIA.8 4 2.Views on Organisational Culture .IDEAINDIA. 5 9 7 0 5 7 16 12 17 11. 4 25 18 12 10 18 0 0 3 0 0.4 6 Most of The employees and experts also rated the organisational culture of the K S E B to be either poor or very poor. 2 53. Modern mathematical and analytical techniques in operation research help the modern managers to tackle this problem through a technique of solutions of what are called transportation problem. Allocating the demands to the different supply centres and arranging most economical transportation are the two major management functions. A consumer in need of the product and comes in the area of operation of the organisation. Sarngadharan 2009 177 Table 7.5 3 2. 6 10 0 10 0 10 0 10 0 10 0 2. and allocation problem.59 7 3.COM – Electricity Industry in the Public Sector in India . The main features of this system are reduced cost and promptness.1 3 2. Views of consumers and experts and employees when subjected to Z test depict that the similarity of both the groups is significant.53 7 sig Sig Sig Not Sig Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 4. This leads to the conclusion that the organisational culture in the Kerala State Electricity Board is not conducive to satisfactory functioning of the organization.

26 2. thorough analysis and corrective measures in later stage are essential.535 Not 0. 7 18 24 28 24 28 26. very sophisticated equipment and expert senior officials work round the clock in order to look after allocation.21.20 0. As this is done normally at the cost of the prospective consumers.16 2.233 Not IDEAINDIA.4 6 5 12 6 8 6 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. may not be feasible at the initial stage.7 37 26 34 20 16 24. construction of a line. planned to serve the future consumers. A permanent mechanism with sufficient staff and time only can perform this.22.725 Not 0. Table 7. One can doubt whether this is done properly since the overloading of systems.3 3 0 0 4 4 0 5 8 4 4 8 8. within certain technical constraints. so that these technical constraints are addressed properly. of course. Though optimizing and standardizing the lines can be done through proper planning at the construction stage. But.633 Not 1.940 Not 0.43 2. 7 34. the staff and the end users can give a picture of the system through their perspectives.IDEAINDIA.154 Not 1. The results are tabulated in Tables 7.COM – Electricity Industry in the Public Sector in India . and low voltage problems are indicative of some flaws in the system. of weaknesses in the system at a later stage.00 2. The experts.02 2.21 and 7.18 2. 7 32 30 28 40 38 40 30. Sarngadharan 2009 178 Electricity is considered to be an essential commodity in these aspects of allocation and transportation as the most economic transportation happens automatically. The capability of the present system to do this is doubtful. when it comes to the distribution network.9 16. In the state level and in the regional level. Hence this question was put forth to the respondents. the lines are constructed for serving each of the new applicants for electric supply.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT 6. has to be done.COM – Electricity Industry © M. This requires a system for monitoring the parameters at the grassroots level. The construction of the lines has to be done.030 Not 0. Diagnosing through analysis of the system parameters.Views on the System for Routing Distribution Lines .7 5. to meet the demands of the prospective consumers.

Sarngadharan 2009 179 Others 0 0 60 22 Total 3.4 0 6 10 0 10 0 2.8 Source : Field Survey 40 34. IDEAINDIA. Some of them found it to be normal. 4 0 28.COM – Electricity Industry © M.4 5.COM – Electricity Industry in the Public Sector in India .16 0.938 Not The majority of the consumers observed the system for routing distribution lines to be either poor or very poor.IDEAINDIA.60 2.

Overloading of Transformers and Distribution Lines Electricity is an essential commodity. even when there is sufficient IDEAINDIA. At the same time. It can very well happen that.288 3. Sarngadharan 2009 180 Table 7. 6 10 0 10 0 10 0 10 0 10 0 3. The Kerala State Electricity Board. Technical Employees 5 Administrative employees 21 Other Employees Experts Total Source : Field Survey 36 24 24 10 26 25 26 22 34 26. to take the generated power to the consumers’ households.57 2. considering their little exposure to the area ad thereby.73 5. 2 25 12 20.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor Sig Sig Sig |t| 22. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the view is highly significant. The statistical test shows that similarity in the views of technical employees and experts is significant. The technical employees strongly approved the present system. has the responsibility of ensuring this.653 Not 2.22.COM – Electricity Industry in the Public Sector in India .IDEAINDIA. 4 7.38 The majority of the employees and experts found the system to be excellent or good. 4 9 15 12 27 14. 4 0 9 12 0 4. little knowledge and competence to make a rational view. Analysis of the data leads to the conclusions that although the system is technically sound it has not succeeded in taking the consumers into confidence. the demand for which grows very fast. This necessitates that the organisation should have not only the production capacity but also the necessary transmission and distribution lines.COM – Electricity Industry © M. The opinions of technical employees need a special weight than those of the consumers. This demand has to be met promptly and successfully by the sole monopolistic supplier.584 Not 3. being a public sector undertaking.59 1.Views on the System for Routing Distribution Lines .45 0. The two groups had divergent views in this aspect. their chances of indirect sensing of the soundness of the system were given due consideration and hence they were also asked to comment up on this. 5 5 5 17 8.249 3.

the lines and equipment of the Kerala State Electricity Board are insufficient to carry the power to the consumers’ locations. IDEAINDIA. transformers and the distribution lines can become insufficient to meet the explosive growth of demand. the possibility of overloading of distribution lines and transformers cannot be ignored. not only by inclusion of more consumers to the system but also by increasing the demand of existing consumers. But. These secondary load increases may go unnoticed by Kerala State Electricity Board if strong monitoring mechanism is not in operation. Overloading of distribution lines and transformers has very serious effects on the reliability of the system.COM – Electricity Industry © M. Hence. transmission lines. for the low voltage distribution system. looking for the presence of overloading of the distribution system is essential in a study of the performance of the Kerala State Electricity Board. The substations. overheating of transformers causing loss of insulation. consumers and experts. All these aspects point to the possibilities of overloading of the electrical network. The introduction of electronic gadgets is supposed to increase the loading which may not be sensed by ordinary meters.24. either in the stations owned by the Kerala State Electricity Board or in the outside agencies including outside states. and unstable power supply are among the major detrimental effects of overloading. Tripping of circuit breakers. there is no such mechanism. Sarngadharan 2009 181 production capacity.IDEAINDIA. Demand has been increasing day by day. burning of connections. as a result of increased use of modern power-intensive household equipment. This question was put before the staff.COM – Electricity Industry in the Public Sector in India .23 and 7. to make them think about the issue and to express their observations. Hence. blowing off of fuses. jumpers and bridging. The responses so obtained are tabulated in Tables 7. The high voltage systems do have better monitoring equipment and personnel to watch the condition round the clock.

IDEAINDIA.18 8 0.32 3.40 2. 3 10 12 12 18 14 17. 5 23 28 27 26. Some of them found it to be normal and a larger number of them identified overloading.7 0 18.2 5 4 12 11 7. 5 30 33 22 36 25 16 25 18. 2 20 22.83 3. 6 47.24.3 9 3. 8 13.211 Not 0. 7 0 15 11.Consumers No response Very High Very Low Category Normal Mean Total High Low Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source: Field Survey 12 11 12 10 24 22 26.92 2.6 8 2. 6 15. 3 19 24 28 6 18 6.250 Not 1. 3 21 20 20 16 16 17.COM – Electricity Industry © M. 2 26. 4 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.569 Not 1. 3 19 10 12 14 8 8.722 Not 1.50 7 2.901 Not 0.38 3.47 9 Sig Not Not Sig IDEAINDIA. .9 0 13 21.23 3.635 Not 2. 8 20 17.Employees and experts responseNo Very High Very Low Category Normal Mean Total High Low Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 27.95 2.67 2.23.COM – Electricity Industry in the Public Sector in India Sig |t| Sig |t| .8 7 3.Views on Overloading of Transformers and Distribution Lines .8 6 8 6 15 8. Sarngadharan 2009 182 Table 7. 8 60 13.688 Not The majority of the consumers did not sense overloading of the transformers and distribution lines.12 7 0. Table 7.216 Sig 0.4 0 10 5 0 3 100 100 100 100 100 3.99 0.Views on Overloading of Transformers and Distribution Lines .6 7 3. 7 20 22 18 22 22 22.6 2 3.

Billing. it would be interesting and necessary to have a close look at the basic commercial unit or the sales outlet of the public sector undertaking under study. The distribution section constructs and maintains the distribution network and transformers. distribution of invoices. 2001). collection of bill amounts and accounting are also done. Thus the consumers’ views differ from those of the experts and employees. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the views is highly significant. Some of them found it to be normal and only a negligible proportion of them found it to be either poor or very poor. Financial Viability of Distribution Sections A basic requirement of a commercial organisation or an industrial undertaking to justify its existence is its ability to generate the finance required at least to run and maintain itself. The staff for this and the personnel for the supervision. which have to support themselves financially. By financial viability. though orders of segregation were made years ago (Radhakrishnan. The statistical test also confirms that similarity in the views of technical employees and experts is significant. A comparison of an arrived price of electricity taken from the transmission system and cost of the establishments described above provide the answer to the IDEAINDIA. Sarngadharan 2009 183 The employees and experts diagnosed heavy overloading and rated it to be either high or very high.COM – Electricity Industry © M. K. The distribution section offices receive the power from the transmission system. This confirms the presence of overloading in the transformers and distribution lines of the Kerala State Electricity Board. what is meant is this capability.COM – Electricity Industry in the Public Sector in India . In practice a business organisation can exist only if it can generate the necessary surplus to ensure its growth and a fair return on investment. let alone any surplus. In an analysis of the financial performance of the Kerala State Electricity Board. both on technical and administrative sides. the distribution section office. This has not been fully implemented so far. The new accounting system being implemented in the Kerala State Electricity Board aims at seeing generation. One can go to the conclusion based on the responses of the employees and experts. and give energy to the consumers.IDEAINDIA. It has to maintain the office and staff to work for the running of the system. are also maintained. transmission and distribution as separate entities. Technicality of the question and access to information by both the groups also prompt to arrive at such a finding.

Views on Financial Viability of Distribution Sections .25. their answer to the query can give a more or less accurate approximation. it is a useful exercise to form a picture of what the persons involved think of it. Hence. 9 0 7 14.Employees and experts IDEAINDIA.COM – Electricity Industry © M.12 0.002 Not 2.415 Not 2. 4 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. 7 21 22 28 26 30 24.40 0. 8 33.533 Not 2.14 0.924 Not 2. 3 32 36 32 48 40 42.COM – Electricity Industry in the Public Sector in India .10 0. 2 60 36.26 Table 7.2 6 5 0 6 0 0 0 0 3. 2 6 5 10 10 4 10 8.11 0. Though certain efforts are made in this direction.511 Not 2. 4 33.685 Not 2.396 Not 2. Table 7. The results of the responses from the stakeholders to the query on this matter are given in Tables 7. unfortunately the arrangements for this sort of accounting have not been made functional in the Kerala State Electricity Board. Sarngadharan 2009 184 question of the financial viability of distribution sections.26.46 1. But.479 Not 2.IDEAINDIA.Views on Financial Viability of Distribution Sections .25 and 7. 7 4 0 0 0 4 0 0 3. This figure could have been easily available from the accounts of the Kerala State Electricity Board. it is done with so much approximation.18 0.4 0 28. The correct amount of energy given to a distribution section cannot be ascertained accurately on account of the absence of sufficient measurement mechanism.18 A good majority of the consumers felt the financial viability of the electrical sections to be either poor or very poor. The people being close observers of the facts.3 33 32 24 22 16 24.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 6.26 0. 4 40 21.

The statistical test shows that similarity in the views of employees except other employees and experts does not vary significantly.49 9 0. was very small. under the existing set up.53 0 Not Not Sig Not The number of employees and experts. Sarngadharan 2009 185 responseNo Very poor Category Excellent Normal Mean Good Total Poor Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 0 0 5 0 1 7.0 4 2. 4 42. 8 12. 5 12 14 16 13. Views of consumers and experts and employees when subjected to Z test indicate that the similarity in the views is highly significant.44 5 2.IDEAINDIA.9 0 2. The majority of them found it to be either poor or very poor.9 5 2. 5 10 9 5 7.2 3 1.5 28 26 31 32 0 9 10 0 3. the conclusion is that the financial viability of the electrical sections of the Kerala State Electricity Board is far from satisfactory. 5 41 36 48 42 37.8 10 0 10 0 10 0 10 0 10 0 1.COM – Electricity Industry in the Public Sector in India Sig |t| . IDEAINDIA.0 0 1. Thus. who felt the financial viability of electrical sections to be satisfactory.34 7 0.COM – Electricity Industry © M.

COM – Electricity Industry © M. Sarngadharan 2009 186 IDEAINDIA.IDEAINDIA.COM – Electricity Industry in the Public Sector in India .

and inspection. saying that electricity industry is providing service to the society.COM – Electricity Industry © M. because of its peculiar nature cannot have a system of close supervision. The management shall give him an environment encouraging dedication. The dedication of an individual depends also on his personal characteristics and environment. Trustworthiness and truthfulness are important features of dedication. More over. Self-motivation and commitment alone can ensure efficient performance in such situations. should feel that the management is trustworthy. Dedication of the working personnel prompts them to work with sincerity even outside the eyes of the monitoring supervisors. Dedicated workers help the management and a satisfied IDEAINDIA. to the society or to both.COM – Electricity Industry in the Public Sector in India . to achieve this. invoice serving. But. the actions of the management and administrators of the organisation have to exhibit certain similar qualities. In such a situation. Sarngadharan 2009 187 Chapter 8 DEDICATION AND COMMITMENT OF THE PERSONNEL Electricity industry is being brought out from the hands of governments globally. The workers. it is the prime obligation of the government to ensure the supply of basic necessities to the public at large. to be trustworthy. Quite often. meter reading. Dedication of workers in a public sector undertaking like the Kerala State Electricity Board can work wonders in its performance. but many progressive societies object to this. Dedication comes from the feeling of owning the organisation. The quality that prompts personnel to work with devotion for the betterment of the organisation can be termed as dedication. it is quite natural that dedication of the personnel in the electricity industry becomes vital from the point of view of social development. a single person has to work in isolation in consumer service. both the elements need to amalgamate ideally. Dedication can be either to the organisation. They work not for any demonstration before the supervisor but to satisfy their consciousness. They should feel that their dedication would not be exploited. which is a public sector undertaking. It gives rise to loyalty and faithfulness. This is a valid argument on the ground that the private initiative would be mainly aiming at profit rather than providing service to the mass. In the Kerala State Electricity Board.IDEAINDIA. The working is not confined to a factory or a yard. Electricity industry.

18 0 2.7 28 32 30 14 8 6.50 4 0.27 8 2. this question was included in the survey.1 4 2.IDEAINDIA.0 0 2.1 8 2. 7 38 34 36 40 30 24.COM – Electricity Industry in the Public Sector in India .Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 1. 7 6 8 10 12 16 15.23 8 0.41 2 0.51 4 2.Views on Dedication of Workers . Sarngadharan 2009 188 management is.88 0 4.6 7 2.6 0 2. it would create a vicious circle damaging the whole organisation.5 3 4 5 Poor 6 9 7 14 Technical Employees Administrative employees Other Employees Experts 41.6 0 0 0 0 0 0 0 0 0 Total 8.Employees and experts responseNo Category Excellent Normal Mean 4. an effort to measure the dedication of workers would not be out of place in the context. Thus.9 7 4.1 3 3. 6 32 21 22 24 26 32 35.6 Source : Field Survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. 5 15 13 24 0 0 0 0 IDEAINDIA.2 6 2.COM – Electricity Industry © M.. 4 20 33.9 8 3.1. 5 34 35 45 12. 6 20 10. Hence.Views on Dedication of Workers . 2 16. in turn.0 2 3.5 5 A good majority of the consumers rated the dedication of workers of the Kerala State Electricity Board to be either poor or very poor.32 4 0. Table 8.45 |t| sig Not Sig Sig Sig Not Sig Sig Not Sig Not Not Sig Sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 10 7 4 0 8 14 17. Many of them approved it as normal. ready to help back.4 Good Total 10 0 10 0 10 0 10 Very poor 2. But.1 0 3.85 3 2. 5 39 41 12 37. 8 0 10.7 0 19.2.57 6 3. Table 8.26 2 2. 6 60 28 30. if either of the things goes the other way.

Understanding human motivation is a complex matter. a person’s motives may be clear to him. the individual concerned may be totally unaware of his motives. but quite puzzling to others. They succeeded in their effort to an extent. Cole defines motivation as the process. In other situations. both instinctive and rational. the end users .do not have the feeling that they are benefitted out of the dedication of employees and hence not satisfied.COM – Electricity Industry © M. 4 8. This response takes the form of IDEAINDIA. as is clear from their opinion. Motivation in simple terms is the process that inspires the people at work to contribute the best of their capability for attaining the organizational goals and objectives (Tulsian & Pandey.4 0 0 10 0 5 3. such as hunger (physical) or the desire for a company (social). But unfortunately enough. to be good or excellent. by which people see to satisfy the basic drives. A. 4 3. When the experts were taken separately.the customers. 8 15. whereas others may see them quite clearly. the conclusion is that the workers had the desire to be dedicated.9 3 7 A good number of the employees and experts felt the dedication of workers of the Kerala State Electricity Board. In some situations. especially where stress is involved. gives rise to a response. The statistical test confirms that similarity in the views of technical employees and experts is significant (Table 8. This is because the efforts to understand others are coloured by own attitudes towards them and the assumptions one makes about his behaviour. to impress up on the experts. It is important for those in managerial and supervisory positions to be aware of these issues. Views of consumers and experts and employees indicate that the dissimilarity in the views is highly significant. G. 1995). Sarngadharan 2009 189 Total Source : Field Survey 35 37. Here.IDEAINDIA. it is noted that they also opined heavily in favour of the dedication of workers. Motivation to the committed Personnel Motivation has an important place in the modern behavioural management.2) As expected. both the individual and those affected by his behaviour understand what is driving him. and to take account of their own prejudices in this area of their work. this question evoked mixed responses from the various groups of respondents. perceive needs and personal goals which trigger common behaviour (Cole.COM – Electricity Industry in the Public Sector in India . Sometimes. The most simplified model of motivation suggests that a stimulus. 2003).

09 2 0.42 2. Because of the probable foul play of vested interests.75 7 1.Views on Motivation to committed Personnel . Because of the inspiration of an encouraging end result. Whether motivation is present or not is a problem to be analysed after collecting the opinions of the respondents Table 8.7 9 10 10 8 16 15.55 2. which is either satisfactory or unsatisfactory. sincerity of a good number of employees is possible.9 0 16.3 19 18 22 18 8 8.IDEAINDIA.76 3. sincere personnel may not get a befitting encouragement. 8 17. 7 34 40 38 44 38 40 20 35. where close supervision is difficult. Otherwise.28 0 1.COM – Electricity Industry in the Public Sector in India .31 7 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total 8 7 4 6 4 10 8. satisfaction is achieved.54 IDEAINDIA.4 9. Then. it has to flow down through the different levels of management right to the bottommost level. In a public sector undertaking like the Kerala State Electricity Board. Certain environment has quite a big demoralizing effect on the sincere personnel. 6 40 10. 8 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. 4 30.90 3 1. 7 40 26.82 2.3.40 2. Motivating those people towards the betterment and achievement of goals acquires prime importance in the management of the staff and workers of the Kerala State Electricity Board.36 2. The absence of proper motivation is a fatal defect of any organisation and more serious to public sector organizations like the Kerala State Electricity Board.20 2. motivation becomes an all important element in behavioural management.51 0 0. 9 0 7 8.Consumers No response Very poor Category Excellent Normal Mean Good Total Poor Sig Not Not Not Not Not Not Not Not |t| 0.15 7 1. the betterment of a public sector organization. Where the behaviour is appropriate. Sarngadharan 2009 190 some kind of behaviour which leads to an outcome. 6 26 26 28 24 26 28 26.48 2. Motivations to sincere personnel have to come from the top management. it leads to frustration. 3 5 0 0 0 0 0 0 3.77 7 0. that is.COM – Electricity Industry © M.

The statistical test also confirms that similarity in the views of experts is significant.14 0. If this is done.01 0. This requires posting of almost thrice the present number of workers in all the sectors. this is not only unfavourable but also against the principle of service to the society. 5 32 35 30 34. On the other hand.47 3. 4 10. The historic struggle at Chicago. workers have to be engaged daily in three shifts.COM – Electricity Industry in the Public Sector in India . thus. to be either poor or very poor.11 The employees and experts regarded it. Table 8. failure to provide round the clock service cannot be IDEAINDIA.97 1.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor Sig |t| Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 4 6 5 12 6.131 Sig 2. was for limiting daily working hours to eight. 4 0 0 0 0 0 10 0 10 0 10 0 10 0 10 0 1. 2 42 41 44 30 39. much costly. 8 37. 5 14 11 15 12.4. Only a negligible number of them thought otherwise. which is adored by the labour organisations globally. in turn. The implementation of this principle in utilities like electricity industry is. This has been implemented in almost all labour intensive sectors.245 Not 2. This finding demands urgent corrective measures. Views of consumers and experts and employees when subjected to Z test reveal that the similarity of both the groups is significant. This will. The conclusion.COM – Electricity Industry © M. Sarngadharan 2009 191 Source : Field Survey A large section of the consumers viewed the motivation to sincere personnel in the Kerala State Electricity Board to be either poor or very poor. Excessive Working Hours without Monetary Compensation Eight hours’ job for workers is an internationally accepted norm.IDEAINDIA. is that motivation to sincere personnel is not sufficient in the Kerala State Electricity Board.892 Not 2. increase the cost of production / operation which eventually ends in increased tariff.Views on Motivation to committed Personnel . however. 2 6 7 5 13 7.756 Not 2. From the management’s point of view.

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tolerated in an essential service like electricity. Electricity faults have to be attended very promptly not only to maintain the power supply as essential service but also to avert dangers. An alternative to services in three shifts, resorted to by organisations like the Kerala State Electricity Board, is to allot a duty time above eight hours in certain sectors where shift duty is not implemented. From the workers’ point of view, duty above eight hours is objectionable. It deprives the workers of rest, life with family, recreation, and social intercourse. It seriously affects their health, vigour and ability to work for long years. Boredom and fatigue will be the result. The labour laws and international practices provide for overtime allowance to the work beyond eight hours. Normally, this is paid at double the rate for normal hours. In the Kerala State Electricity Board, no overtime allowance is paid now. Instead, a fixed compensatory allowance is paid for persons engaged for more than eight hours, irrespective of the actual number of hours of work. Limiting work to eight hours by posting shift duty or payment of full rate of overtime allowance shall be instrumental in enhancing the tariff and this will be objected to by the society. But, the effort for cost reduction by engaging the workers for unlimited hours by paying a compensatory allowance much less than the overtime allowance will invite objection from the employees. Hence, the way out for the management is to strike a proper balance in this aspect. How much it is acceptable to the staff and the consumers is a crucial question, whose answer is to be precisely found out by the management. An attempt in this direction was made in this study. Tables 8.5 and 8.6 provide the findings of the survey.

Table 8.5 .Views on Excessive Working Hours without Monetary Compensation - Consumers

responseNo

Very poor

Category

Excellent

Normal

Mean

Good

Total

Poor

|t| 1.45 8 0.94 1 0.92 9 0.69 9 0.65

Domestic Commercial Public lighting Agriculture Public Water

3. 3 4 6 6 8

4. 7 4 10 10 10

30 29 42 36 38

18. 7 19 32 20 28

13.3 12 4 10 10

30 32 6 18 6

10 0 10 0 10 0 10 0 10

2.5 1 2.5 4 2.8 1 2.7 8 2.7

Not Not Not Not Not

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sig

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Works Industrial LT Industrial HT Others Total Source : Field Survey 8 8. 9 0 5. 4 12 8. 9 0 7. 2 24 24. 4 80 31. 8 18 22. 2 20 21. 4 14 11.1 0 11.2 24 24. 4 0 23

0 10 0 10 0 10 0 10 0

7 2.7 6 2.7 6 2.8 0 2.6 6

4 0.57 2 0.54 9 0.28 5

Not Not Not

A large number of the consumers recorded their ignorance about the aspect, which is indicative of their limited access to the required data. Still more of them opined that the system for monitoring compensation for excessive working hours was either poor or very poor, than those who opined it to be excellent or good.
Table 8.6.Views on Excessive Working Hours without Monetary Compensation - Employees and experts

Very poor

response No

Category

Excellent

Normal

Mean

Good

Total

Poor

|t| 5.47 3 2.59 8 3.55 7 8.74 2

Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey

0 5 0 0 1

4.5 12 5 47 14. 6

27. 5 37 25 41 31. 6

42. 5 43 49 7 36. 8

25.5 3 21 4 15.8

0 0 0 1 0. 2

10 0 10 0 10 0 10 0 10 0

2.1 1 2.7 3 2.1 4 3.3 2 2.4 8

Sig Sig Sig Sig

A large section of the respondents from the group of employees and experts rated the system to be either poor or very poor. Only a very small number rated it to be excellent or good. The statistical test also confirms that similarity in the views of employees and experts is significant (Table 8.6) From the large number of consumers who opted out of the question and those who made a probably passive rating of it as normal, the poor access of consumers is well proved. Hence the inadequacy of monetary compensation can well be sensed from the survey. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the views is highly significant However, any revision of the same should be approached
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cautiously because of the swing of the experts’ opinion in the other direction. The whole picture calls for a scientific evaluation. Protection to Staff for Enforcing Rules and Regulations The Kerala State Electricity Board’s product, electricity, has certain peculiarities with regard to measurement, consumption, security and safety. The measurement of electricity is done at the consumers’ premises without supervision from the supplier. As such, the electricity supply is susceptible to theft and tampering of meters. Secondly, defaulters in payment of charges of electricity will continue to get electricity automatically through the existing lines and systems even after the default unless the line of supply is cut. Thirdly, electricity is a dangerous product, if certain rules of safety are not strictly followed. For each of these aspects certain rules are to be enforced. In order to avoid theft and tampering, the consumer has to allow the supplier to properly seal the meter. The supplier shall be allowed to inspect the meter at any time of consumption. If any tampering or breaking of seal is detected, the supplier shall be empowered to penalize or punish the consumers. These steps would cause confrontation between the consumer and the staff of the supplier. When the consumer defaults the timely payment the supplier is empowered to cut the supply line. As this is to be done at the consumers’ premises, there would be a tendency for the consumer to resist these steps. He may either physically resist the disconnection or he may try to wreak vengeance on the staff by making baseless allegations. The safety rules are made to avoid dangers on account of electricity flow such as electric shock to men and animals and fire accidents. For this, rules for proper earthing, proper insulation, and use of good quality equipment are to be enforced. As these rules increase the cost of installation, the ordinary consumer may not like these rules; but the supplier has a responsibility to avoid electrical accidents and therefore he has to enforce the rules. Thus, enforcing the rules would be normally against the will of the consumer and hence there is the chance that the consumer may oppose the action of the staff, which may even lead to assaults. The employee can successfully enforce the rules only if he is given sufficient physical protection. As the electricity employee has to work and travel alone in the field that also during odd hours, providing sufficient protection to him is highly important. The question of sufficiency of protection was put forth before the respondents. The results are tabulated and given in Tables 8.7 and 8.8.
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Table 8.7 Views on Protection to Staff to Enforce Rules - Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 0.18 1 0.47 1 0.57 6 0.58 6 1.35 8 0.02 7 0.59 8 1.34 4 |t| 4.36 2 0.90 8 0.81 1 6.06 8 sig Not Not Not Not Not Not Not Not Sig Not Not Sig sig

Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others

23. 3 20 24 22 28 24 20 0

18. 7 21 26 24 28 26 24. 4 0 22. 4

28 18 40 26 24 34 37. 8 80 28. 6

13. 3 9 6 14 8 8 11. 1 20 10. 6

3.3 9 4 8 4 8 6.7 0 5.8

13. 3 23 0 6 8 0 0 0 10

Total 23 Source : Field Survey

10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0

3.5 2 3.4 4 3.6 0 3.4 0 3.7 4 3.5 0 3.4 0 2.8 0 3.5 0

Many consumers felt the protection to the staff to enforce rules to be satisfactory, that is, they thought it to be either good or excellent. Some of them rated it to be normal. Table 8.8. Views on Protection to Staff to Enforce Rules - Employees and experts RespondedNot Category Excellent Normal

Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey

5 8 6 0 4. 8

4. 5 9 5 21 8. 8

9 25 18 60 24. 2

55. 5 39 54 18 44. 4

26 19 16 1 17.6

0 0 1 0 0. 2

10 0 10 0 10 0 10 0 10 0

2.0 7 2.4 8 2.3 0 3.0 1 2.3 9

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Mean

Good

Total

Very poor

Poor

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A major section of the employees and experts rated the protection to staff to enforce law, to be either poor or very poor. The statistical test also confirms that similarity in the views of technical employees and experts is significant. Views of consumers and experts and employees were seen divergent and when subjected to Z test indicate that the dissimilarity in the views is highly significant. Evidently, the opinion of the employees and experts is to be taken as more reliable, as consumers may not be fully aware of the problems faced by the employees. The swing of the consumers towards the positive side can be neglected while reaching a conclusion. Thus, it can be concluded that the employees of the Kerala State Electricity Board have not been provided with adequate protection for enforcing rules.

Service Conditions at Difficult Places Offices and work places of the Kerala State Electricity Board are situated at diverse locations throughout the state. They include places of varied conditions, from posh cities to the most remote forest and hilly areas. Normally, the staff and officers are longing to work at easier locations than in the hilly forest places. Thus, it is difficult a task for the management to pursue the personnel to work in unattractive places. In order to make the difficult places more attractive, the service conditions at these places have to be made more appealing. For example, if the place is in a remote hilly area, the staff should be provided with cheap and proper accommodation facilities. There should also be recreational and health care facilities. The staff should be given convenient transportation facilities, if no public transport is available. There should be enough facilities for the family’s needs, such as, education facilities, and availability of household needs for food and clothing. On the other hand, if the locations like towns and cities have better service conditions than the difficult ones, they provide negative motivations to the staff working in the difficult situations. If the necessary facilities cannot be provided at the difficult places, it can be compensated through extra monetary benefits, though money can not be considered a perfect motivation. Sufficient compensation can improve the situation to a larger extent. Service incentives to encourage service at difficult places include the pay packet, compensatory allowances, and preference for future postings in better places, promotions and award of grades. The Board gives compensatory allowances like project allowance, and isolation allowance for working in remote places. Whether these encouragements and perks
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Employees and experts responseNo Very poor Category Excellent Normal The majority felt the service conditions at difficult places to be either poor or very poor.7 9 4 2 4 12 8.COM – Electricity Industry © M. 3 22 50 44 52 36 42. 3 11 6 14 14 12 17. 3 21 20 22 18 10 8.10 contains the views of the employees and experts on this aspect.019 Sig 3.80 0.76 1. Table 8.24 1. 4 23.54 2. 8 20 15 16.219 0.COM – employees in Other Employees 0 10 22 44 Experts 0 24 29 24 Total 2 13 20 40 Source : Field Survey 30 24 23 23 26 0 0 1 0 0 100 100 100 100 100 2.9 depicts the views of the consumers and Table 8. Views on Service Conditions at Difficult Places . 3 5 8 10 4 4 8. Table 8.26 2. 2 80 33 21.904 Mean Good Total Poor .19 2. A good number of the consumers expressed their ignorance of the aspect.13 2. 8 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. The numbers who felt. and either excellent or good.9 0 19 19.03 0.675 Not 3.491 2.8 16 32 12 8 8 26 13.10. Sarngadharan 2009 197 are adequate to provide motivation for working in difficult places is a question to be answered by the people actually put in the situations.257 Not 2.463 Sig 3.9 0 9.71 2. Views on Service Conditions at Difficult Places .90 0.9. This variable was subjected to further probe in this backdrop.049 Not 2. were found to be more or less equal.22 2. 9 0 5.25 1.IDEAINDIA. Table 8.908 Not 3.644 Not 2. A Technical Employees 4 9 13 45 Administrative Electricity Industry 0 the Public Sector in India 11 24 41 IDEAINDIA.295 Not 2. 3 0 17.Consumers responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| sig Not Not Not Sig Sig |t| Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total 3.04 0. the conditions to be either poor or very poor.94 Source : Field Survey Most of the consumers were of the view that the service conditions at difficult places are normal in the Kerala State Electricity Board.553 0.

ranging from tight to loose control. responsibility. The opinion on the aspect recorded by the consumers was not seen to be very strong. accountability and power. is considered to be the better of the two because it provides psychological satisfaction to the subordinates. There will be a wide variety of options in this process to the managers. Giving directions during the operations may not be possible. what is expressed are the duties in terms of functions. Discussions about delegation and empowerment are centred round issues of authority.COM – Electricity Industry © M. The responsibility to perform specific duties and the corresponding authority to commit resources is to be defused throughout the organisation by means of formal orders and allocations of roles within the organisation structure. responsibilities and authority should be put in black and white without IDEAINDIA. On the other hand. then what is expressed are his duties in terms of results. their opinion need not be given much importance. Clarity in the Nature of Duties and Responsibilities One of the central issues of organisation design is the question of how to create the best balance between control from the centre and delegation at various levels of the system. In the process of delegating tasks with their commensurate authority. Expressing duty in terms of goals. All these discussions are centred round entrusting of specific duties to every member of the organisation. when it is stated that the Assistant Engineer’s duty is to ensure a certain figure of reliability index or any other approved measure of reliability of the lines. When it is observed that an Assistant Engineer’s duty is to maintain the distribution lines. The accountability. Operations in an industry. Views of the consumers and experts and employees were found to differ and when subjected to Z test confirm that the dissimilarity in the views is highly significant. taking into account the strong views of the employees and experts the service conditions can be concluded to be poor. Thus. like the Kerala State Electricity Board. Sarngadharan 2009 198 views of employees does not vary significantly. Considering their little access to the question. are carried out over a vast area so that close supervision of the functioning of the whole work force is difficult or even impossible. while delegating.COM – Electricity Industry in the Public Sector in India .IDEAINDIA. Duties may be expressed either in terms of functions or in terms of goals. The duties of personnel are clear to them only when they know what activities they must undertake and what missions he must fulfill. This calls for clearcut definitions and descriptions of duties and functions of each category of staff and workers. It may be added that the discrepancy requires corrective steps. it is important to ensure that the amount of authority is defined or prescribed in an unequivocal way.

4 24.08 8 2.COM – Electricity Industry © M.8 9 3.3 16 16 10 18 16 15. Table 8.8 3 2. the next higher was the group of those seeing it as normal.13 1 Mean Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 7. 6 16 12 16 14 4 12 8.3 8 2.8 7 2. 5 15 10 12 15 27 40 25 30.IDEAINDIA.9 0 12.43 0 0.01 4 0.Employees and experts responseNo Very poor Category Excellent Normal Good Total Poor sig 3.13 Sig Sig Sig |t| Technical Employees Administrative 4.99 2 0.11 shows the response from the consumers and Table 8.9 5 2.12 depicts those from the employees and experts. Hence the extent of clarity in defining the nature of duties and responsibilities in the Kerala State Electricity Board is worth serious examination in the present research work. 3 7 16 14 18 14 8.1 8 2.Views on Clarity in Nature of Duties and Responsibilities . 9 0 9.80 7 2.Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 2.6 19.5 21 0 0 10 0 10 2. Table 8.COM – Electricity Industry in the Public Sector in India .23 1 0. Table 8.11. 8 80 29.12.50 6 0.6 1 2.8 0 2. The number declaring their ignorance was also nominal. Sarngadharan 2009 199 any ambiguity.9 6 2.9 0 13. 3 24 4 12 0 6 8. 2 23. 6 0 13.36 3 0. 7 25 28 30 52 16 37. Hence a feedback on this question was attempted in the survey.8 7 Sig Not Not Not Sig Not Not Not Consumers viewing clarity in duties and responsibilities to be either poor or very poor formed the biggest group. 3 16 20 20 8 36 20 20 20.Views on Clarity in Nature of Duties and Responsibilities .7 IDEAINDIA. 6 Total 11 Source: Field survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.

2 3 1 0.8 9 2. 8 0 10 0 10 0 10 0 5 2. and metal age Man has been successful from very ancient times in developing tools to make his physical labours easy.COM – Electricity Industry in the Public Sector in India . hanging in a sling from the mid span of a long line. thick forest.4 9 2. This is evident from the fact that the various stages of evolution of the modern human culture were marked by ages named after the tools used in those ages.IDEAINDIA. Views of consumers and experts and employees when subjected to Z test reveal that the similarity of both the groups is significant. The working of the Kerala State Electricity Board includes many specialized and precise operations in complex conditions and situations. for example.29 3 Not Sig The employees and experts strongly felt the inadequacy of clarity regarding duties and functions.02 6 3. inside the dark spaces inside a huge generator. This indicates flaws in the present system. Sarngadharan 2009 200 employees Other Employees Experts Total Source: Field survey 5 0 5. The location of work. the necessity of appropriate tools need not be overemphasized. or in the oxygen-deficient pockets of an underground power station. Technological advancement mainly means development of tools to ease the physical exertion needed for performing the various production tasks. the mode of working or the work itself may offer difficulties and complexities. The evolution and growth of human culture itself dwelt on a framework of tools development. The work location may be steep hills. 2 23 11 23. It is interesting to note that the consumers also recorded their opinion against the present state of affairs. IDEAINDIA. with their limited knowledge in the subject matter.5 0 4 0. Availability of Appropriate Tools For any job of a technical nature. The invention of the wheel and subsequent inventions of machinery are nothing but a development of tools. The work may have to be performed on the top of the post. stone age. 8 27 24 31. Normal. marshy lands or water. The statistical test also confirms that similarity in the views of employees and experts are significant. 8 14 35 16.COM – Electricity Industry © M. general purpose tools may not be able to give the sufficient facility and ease to perform the specific duties in the difficult situations as mentioned above. 2 28 29 22.

3 16 16 10 18 16 15.8 7 IDEAINDIA.COM – Electricity Industry in the Public Sector in India .6 19. 7 25 28 30 52 16 37.6 1 2. 8 80 29.COM – Electricity Industry © M. as is done now in most cases. labour-intensive and costly.8 7 2. 3 16 20 20 8 36 20 20 20.8 3 2. along with the standard tools. Sarngadharan 2009 201 Specific tools have to be designed and made available for specific jobs under special conditions of location.IDEAINDIA. 6 Total 11 Source: Field survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.13 1 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 7. is very difficult.23 1 0. difficulties and complexities.8 9 3.13.8 0 2. There have been complaints over the media that even the most modern mobile repair vans have not been supplied.9 5 2. This question was asked to the staff. enquiries into the availability of necessary tools in the field became relevant. consumers and experts under the survey. A quick survey of the situations in the field raises the doubt whether the available standard tools been supplied or made available to the workers. Table 8. Special equipment like folding ladder with a van and long-handled sickle with facilities for mechanical operations from the remote end can ease the job very much and reduce the recurring cost. now the Kerala State Electricity Board is finding it difficult to get contractors to do the job at standard rates.9 6 2. 4 24. mode.50 6 0. 6 0 13. using ladder and a heavy knife. 3 24 4 12 0 6 8. For example. Views on Availability of Appropriate Tools .9 0 12. Thus.3 8 2. 3 7 16 14 18 14 8. 6 16 12 16 14 4 12 8.36 3 0.99 2 0. 2 23.01 4 0.9 0 13. let us take the case of removing tree branches touching the electric lines.Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor Sig Sig Not Not Not Sig Not Not Not |t| 2. Similar efforts can be made for research and development of appropriate tools for each kind of job. In fact. 9 0 9. The normal working.08 8 2.43 0 0.

64 5 2. has thus reached a satisfactory stage.COM – Electricity Industry in the Public Sector in India . which has electrified all the rural and urban areas. Availability of Transportation Facilities Kerala is the only state in India. the consumers didn’t record a distinct and clear opinion.2 0 2. the state stands far behind this expansion. Sarngadharan 2009 202 Regarding the availability of appropriate tools for the employees to use.33 5 5. at least in the case of electrical network.92 1 sig Sig Not Sig Sig Technical Employees Administrative employees Other Employees Experts Total Source: Field survey 4. which started in the initial years of the twentieth century. regarding the transportation facilities.73 7 1.14. 8 41 25 45 8 32 29. (Table 8.5 21 23 7 22 0 0 7 1 1. Kerala has grown to meet the expectations of the consumers.Views on Availability Of appropriate tools . The history of electricity in the state. Views of consumers and experts and employees when subjected to Z test reveal that the similarity of both the groups is significant. But. 6 10 0 10 0 10 0 10 0 10 0 2.IDEAINDIA.COM – Electricity Industry © M. Thus. 6 14 27 12 42 21. The majority opined the availability to be either poor or very poor.Employees and experts responseNo Category Excellent Normal Mean Good Total Very poor Poor |t| 3. it can be concluded that the availability of proper tools to the employees is not up to mark in the Kerala State Electricity Board. Thus. Those who found it to be good or excellent were fewer in number than those who found it to be normal. Maintaining electrical network requires constant attention including inspection and timely repairs.2 3 3.5 1 The employees and experts made a strong opinion against the present condition regarding the availability of appropriate tools. 5 10 6 0 5 11 17 7 42 17. The area under one particular office has hundreds of kilometers of distribution and IDEAINDIA. The statistical test also confirms that similarity in the views of employees and experts except administrative employees is significant.7 0 2.13) Table 8.2 0 2.

The public transport system may not reach all the locations. Delay in attending preventive as well as breakdown maintenances can be minimised. The tables 8. which is very serious during these days when the threat of irresistible. Sarngadharan 2009 203 transmission lines.86 IDEAINDIA.16 contain the views in this regard. Absence of transportation can cause increased duration of interruption. and reduces the fatigue to the system as well as the personnel. If proper transport facilities can be provided. Table 8. Depending on the rank of the staff or officer. Availability of proper transport facilities is extremely essential for maintaining the system.15.051 Sig Not Not Not sig Domestic Commercial Public lighting Agriculture 6 7 16 14 8 15 18 10 32 25 38 28 26 16 14 22 18.IDEAINDIA.COM – Electricity Industry in the Public Sector in India .COM – Electricity Industry © M. 7 15 8 14 9. though the two categories view the issue from different perspectives. This reduces interruptions.Consumers responseNo Category Excellent Very poor Normal Mean Good Total Poor |t| 3. increases the image and goodwill of the organisation. costly litigations. Hence. the Board encourages certain categories of field staff to maintain their own vehicles. Moreover.975 0. there can be considerable reduction of staff by improving the productivity. which leads to increased consumer complaints. and considerable damage to the goodwill.21 2. the viewpoints of the respondents were collected and analysed for reaching a conclusion on this aspect.15 and 8.679 1. through the promptness of attending the complaints and breakdowns. enhances the revenue through increased sales. This calls for an extensive travel by the staff to reach every point of the line for timely inspection and maintenance. allowances are paid for maintaining cars or two wheelers.466 0. The availability of proper transportation is well felt by the staff as well as consumers.Views on Availability of Transportation Facilities . Hence.78 3. the cost of transportation spent by the Kerala State Electricity Board is to be taken as not only a maintenance cost but also an investment in the process of building up goodwill.52 2.3 22 6 12 10 0 10 0 10 0 10 2. Hence the Kerala State Electricity Board has provided certain transportation facilities attached to the offices.

80 2.138 Sig Not Not Not The highest number of the consumers found the availability of transportation facilities to be normal. Sarngadharan 2009 204 Public Water Works Industrial LT Industrial HT Others 18 14 11.00 2. 4 41 42 45 8 35. Table 8. Views on Availability of Transportation Facilities . A more or less an equal number of them recorded their poor opinion about this aspect.COM – Electricity Industry © M. 2 0 6 8. 8 20 18.40 3.87 3.9 0 10. Views of consumers and experts and employees were found divergent and when subjected to Z test indicate that the dissimilarities in the view is highly significant Thus.04 3.16.83 1 5.2 0 0 7 1 1. 3 0 13 50 36 40 80 34. 1 20 16 13.160 0.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 4. 4 29 3 23 7 18. Total 4 Source : Field Survey 0 10 0 10 0 10 0 10 0 10 0 3.690 0. 2 14 26 12 41 21.21 2.92 2. 8 4 12 8. 2 8 16 17.67 5 Technical Employees Administrative employees Other Employees Experts Total Source: Field survey 4.22 2. the inadequacy of the present transportation facilities can well be concluded from the analysis of the above IDEAINDIA. The number of employees and experts who viewed it to be normal was slightly smaller than that of those who found it either excellent or good.COM – Electricity Industry in the Public Sector in India sig . 6 10 0 10 0 10 0 10 0 10 0 2. 2 11. 5 18 7 43 18. 4 0 10.IDEAINDIA.23 3.986 0. 5 11 6 0 5.14 5 2.28 6 3.56 Sig Sig Sig Sig The opinion of the majority of the employees and experts was that the transportation facility available to the Kerala State Electricity Board personnel was either poor or very poor. The statistical test also confirms that similarity in the views of employees and experts is significant.9 0 13.

it can be upward or downward or horizontal in direction.COM – Electricity Industry © M. namely. Availability of Communication Facilities Communication is the lifeblood of the modern business. This means that communication should flow freely upward and downward. a climate of trust and confidence. the communication channels and the symbols. Sarngadharan 2009 205 data. the subject. progress of operations and data. directions. information on the state of affairs. receiver and subject. objectivity. that is. clear and direct flow without any obstructions. one of the important requirements of a successful industrial/ business operation with the recent explosive advancement in communication. The availability of proper communication mechanism and methods is. supervisors and equals in the organisation. continuity. with the subordinates. hostility and conflict.planning. Informal and oral communication is unavoidable to establish responsibility and line of control. The state of affairs calls for a scientific probe into this aspect. The management of effective communication involves observing and ensuring propriety and specificity of all the five elements in the communication. The feedback is an equally important element in communication. and it can be oral or written. A breakdown of communication results in misunderstandings. the opinion of experts to the contrary needs special attention. freedom of movement. the sender. it assumes particular importance in directing. Communication may be formal or informal. The objectives of an ideal information system are achieving a perfect identity of mind between all the persons involved in the line of operation of a particular objective. This means that the channel and symbol should be suitable for the sender. organizing. The essential of elements of a good communication system are the capability of expressing the needs and character of the organisation. the process and means of communication are of prime importance in the successful conduct of the business. therefore. where the operations are widely scattered throughout the state. the receiver. In an organisation like the Kerala State Electricity Board. Communication involves transmission of information which includes ideas.COM – Electricity Industry in the Public Sector in India . At the same time. A leader can lead and a manager can direct effectively only by establishing perfect understanding vertically and horizontally.IDEAINDIA. identification by of each the members of communications as an integral part of his job. creation of unfavourable attitudes. directing and controlling. While this process pervades all managerial functions. This IDEAINDIA.

6 27.92 4 0.8 0 2.6 3 2.45 1 1. 9 0 7.2 33.7 5 8 6 8 12 11. Views on Availability of Communication Facilities . 3 26 32 28 22 16 20 20 25.05 0 0.9 0 2.6 8 Sig Not Not Not Not Not Not Not Most of the consumers felt the availability of communication facility in the Kerala State Electricity Board to be normal.9 8 2.4 5 2.35 3 1.76 5 0.17.25 1 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 4. Table 8.77 4 1.8 Source: Field survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2. Hence.Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 2.8 2 2. The evolution to the present level of adopting these advancements gives a measure of the Kerala State Electricity Board’s ability to adapt itself to the requirements of the modern world.1 0 6 8 10 8 12 16 13. 3 0 9. IDEAINDIA. the adequacies of communication facilities in the Electricity Board were enquired into. Sarngadharan 2009 206 means that the Kerala State Electricity Board cannot be an exception to this general phenomenon. 3 32 44 40 50 36 37.5 6 2.COM – Electricity Industry in the Public Sector in India sig .9 0 13.IDEAINDIA. 8 80 37.46 5 1.7 15 6 14 8 14 8.COM – Electricity Industry © M. 2 18.6 10 14 0 4 0 6 8.9 6 2. A good number of them found it to be poor. 6 Total 6.

77 0 0. However.IDEAINDIA. The poor dedication of the IDEAINDIA. The vital aspect of billing and revenue collection has many flaws.Employees and experts responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 3. it is clear that the general opinion highlights the inadequacy of the present communication facilities. The survey has revealed many weak points in the performance of the Kerala State Electricity Board. 2 10 0 10 0 10 0 10 0 10 0 2.9 3 2. 5 11 10 0 7. When the consumers and employees felt that the communication facilities were insufficient.7 4 3.18 Views on Availability of Communication Facilities . 4 26 27 22 41 28.5 3 2.8 3 Sig Not Not Sig The opinion of the majority of the employees and experts was that the communication facility available to the Kerala State Electricity Board personnel was either poor or very poor. 5 3 8 2 12 0 0 0 1 0.4 2 2. The distribution system comprising the lines and transformers is heavily overloaded.89 3 0. the keen eyes of the experts identified its adequacy. Sarngadharan 2009 207 Table 8.COM – Electricity Industry © M. The system for attending consumer complaints was also found to be defective.26 3 Technical Employees Administrative employees Other Employees Experts Total Source: Field survey 7. The poor financial viability of the section was also diagnosed in the study. 2 14 18 15 51 22. it is not felt so by the consumers. The same is the case with accounting practices. The statistical test also confirms that similarity in the views of technical employees and experts are significant. Though the employees find it to be satisfactory. The system for routing distribution lines was noted also to be poor. 4 29 41 45 5 29. Thus.79 8 5. the problem cannot be mere inadequacy but the failure of the employees to use the facilities when needed. Views of consumers and experts and employees were found to be contradictory. When they were subjected to Z test confirm that the dissimilarity in the view is highly significant Thus. This requires a further study in order to identify the possible reasons. 8 23.COM – Electricity Industry in the Public Sector in India sig . the opinion of experts to the contrary cannot be overlooked.

Motivation to sincere personnel is also practically nil.COM – Electricity Industry in the Public Sector in India . financial viability of the distribution system affects the progress of the Board. The employees are not provided with adequate protection to enforce rules. transportation facilities and communication systems are not up to mark. IDEAINDIA. Excessive working hours without monetary compensation is yet another factor affecting the morale of the staff. Tools. Sarngadharan 2009 208 workers and the indifferent attitude of the staff to the public make the situation more unfavourable. The forgoing analysis on the management of revenue brings about the conclusion that the Billing and accounting practices of the Board do not satisfy the consumers.IDEAINDIA. The organisational environment and cultural background were observed to be poor. Poor facilities for training in technical matters and behavioural practices were among the identified reasons. Service conditions at difficult places are not satisfactory. and inadequate measures for motivating the employees hinder the revenue management performance of the Board. There is no clarity in the allocation of the duties and functions of the employees.COM – Electricity Industry © M.

All these make the decision on tariff very complex and difficult. which cannot be absorbed by improving productivity. Fourthly.COM – Electricity Industry in the Public Sector in India . As there is considerable variation in the cost with time. First. it should be in conformity with the changing policies of the government. ability to generate sufficient revenue and/or profits. employees and experts can provide much insight into these attributes. are more or less inter-dependent also. and the prices of competitors. Labour cost increases from year to year. 2004) IDEAINDIA. Many costs can be offset by productivity savings. although engaged in public utility services. in this context. Secondly. operates on its own in a financially viable condition ensuring its sustainability on commercial lines. It has a strong bearing on the sustainability of the organisation. then price is definitely the next. Therefore. As such. In this situation price increases are inevitable (Cole. The price is decided mainly depending on the cost. G. the others all represent cost. material cost and fuel cost may be subject to less regular but sharper increases. Some of the factors are the cost of production.. its tariff structure requires special consideration for analysing the financial performances. interest rates may be extremely variable and hence cost of financing also fluctuates. Environmental factors form another related area.COM – Electricity Industry © M. that the consumers. The results of the queries on these attributes are analysed below. it should be able to strike a proper balance between two conflicting parameters – quality and affordability.A. for ordinary products.IDEAINDIA. Tariff for Domestic Consumers If product is the most important single element in the marketing mix. The prices have to be geared to a number of factors. the desired market share. the two attributes. frequent variations in prices will be inevitable. It was also observed. Moreover. tariff and environmental factors. the costs which are most crucial are those which represent sudden and massive increases. Thirdly. Sarngadharan 2009 209 Chapter 9 Tariff and Distribution Losses The Kerala State Electricity Board. it should ensure the sustainability and growth of industry and commerce in general and of itself in particular as an industry. Price is important because it is the only element of the mix that produces the revenue. it should have justification from both the commercial and social angles.

it is felt. The statistical test also reveals that the similarity in the views of various categories of consumers.1. Theoretically. Certain others support the concept.COM – Electricity Industry in the Public Sector in India . However. for product like electricity. The majority of the consumers were of the opinion that the tariff for domestic consumers was normal. since the Kerala State Electricity Board is a public sector undertaking. Though the cost of all the units generated and distributed is more or less the same. This method. The number of consumers. like domestic consumers and agricultural consumers. the perceptions of the various stakeholders about it also become important. domestic consumers use around 45% of the total electricity consumed in the state. Instead of striking a balance between the cost requirements of the Kerala State Electricity Board and the public opinion. except domestic and commercial. IDEAINDIA. For any tariff. the product under the present study. besides its financial justification. competitors do not come into the picture. taking supply of electricity as a social responsibility. It is against this backdrop that the opinions of the respondents were collected on the tariff for domestic consumers. The mechanism in the Kerala State Electricity Board for pricing. In Kerala. there is no restriction in pricing. Certain categories of consumers. since the Kerala State Electricity Board enjoys monopoly in the field.IDEAINDIA. However. public accountability is an important element requiring due consideration in pricing. the pricing decisions were mostly biased towards popularity rather than financial stability of the organisation. Domestic consumers are consumers using electricity only for household purpose. Sarngadharan 2009 210 In respect of electricity. feeling it to be either high or very high and the numbers of those feeling it to be low or very low were more or less equal. 20% of the total consumption for other purposes by the members of the household is allowed under domestic tariff. The final decision on pricing is normally done more or less arbitrarily by the government without due consideration to the financial aspects. is considered by some experts to be detrimental to the economic growth. known as cross subsidy. are offered much subsidised tariff and the consequent loss is offset through increased tariff for certain other categories of consumers. The results of the test are provided in table 9. the tariff offered to different categories of consumers varies widely. The actual practice experienced during the past decade was different. is not that sound.COM – Electricity Industry © M.

869 0.2 Source : Field Survey 28 11 10 16 18 12 11.18 2.92 3.20 3.90 3.47 2.65 2.843 sig Sig Sig Not Not Not Not Not Not Not Not Not Not sig Domestic 24 Commercial 11 Public lighting 10 Agriculture 12 Public Water Works 14 Industrial LT 6 Industrial HT 6.771 0.6 Source : Field Survey 4 4 8 10 6 49 55 49 65 53 27.7 Others 0 Total 14.IDEAINDIA. Thus.07 3.1 40 17.59 2.58 Good Total 100 100 100 100 100 Technical Employees 2. it can be concluded that the tariff for domestic consumers is at normal rates. IDEAINDIA.8 8 21 8 4 8 4 4.5 Administrative employees 3 Other Employees 5 Experts 0 Total 2.4 0 9.942 0. Those who opined it to be either high or very high were smaller in number than those who held that it was low or very low.159 0.5 25 23 15 23.75 2.6 20 25 50 44 48 52 69 40 37 20 32 22 24 12 26 8.5 13 15 10 14. Sarngadharan 2009 211 Table 9.COM – Electricity Industry © M.6 Poor 17. when subjected to Z test indicate that the similarity in the views is significant. Views on Tariff for Domestic Consumers .820 0.Views on Tariff for Domestic Consumers .283 |t| 1.05 The employees and experts were strongly of the opinion that the tariff was normal.Consumers responseNo Very poor Category Excellent Normal Mean Good Total Poor |t| 3.08 3.Employees and experts responseNo Very poor Category Excellent Normal Mean 2. The opinions of both the groups.067 0.074 0.667 4.2.016 0.4 0 0 0 0 0 0 0 0 0 100 100 100 100 100 100 100 100 100 3.6 0 0 0 0 0 The views of experts and employees were on the same line that the tariff for domestic consumers is normal.1.59 2.733 1.COM – Electricity Industry in the Public Sector in India .40 2. Table 9.9 20 21.

As such.COM – Electricity Industry © M. if any State Electricity Board has such a policy. At present. it can not be helpful to the public or the domestic consumers. Their number is above ten lakh and the consumption of this group is about 8 per cent of the total consumption in the state. They include shops.4 The consumers recorded the strong view that the tariff for commercial consumers was very high. Sarngadharan 2009 212 Tariff for Commercial Consumers Commercial consumers include the consumers using electricity for organisations for commercial purposes. The number of consumers who felt it to be low or very low was negligible. Hence. hotels. The opinions of the respondents were collected on the tariff for commercial consumers and the outcome is given in Tables 9. IDEAINDIA.COM – Electricity Industry in the Public Sector in India . they will transfer their burden to the end users of their products and services. it is observed that the public in general and many who are believed to know much about the electricity industry are not aware of the intricacies and consequential effects of this higher rate.3 and 9. and service establishments. the Kerala State Electricity Board views them as an affluent group. and they are made to suffer the after effects of cross subsidy. Thus.IDEAINDIA. they can afford to pay higher charges. In fact. They may even charge an extra margin on the actual cost incurred for electricity. However. A large number of the consumers found it to be high. The concept or logic for deciding higher tariff for commercial consumers is that they are among the richer category of the state. commercial consumers have to operate on commercial lines and their expenditure has to be charged against their income.

39 4.239 2.06 3.16 4. Thus.COM – Electricity Industry in the Public Sector in India sig . Sarngadharan 2009 213 Table 9.767 3.44 4.877 0. Views on Tariff for Commercial Consumers .76 3. Table 9. of whom the majority viewed it to be very high. The statistical test also confirms that similarity in the views of technical employees and experts do not vary significantly.04 4.476 2.7 0 0 0 0 0 8.2 2 0 0 0 0 0 4.7 40 31 28 10 24 32 28 32 27 60 25 4.7 36 36 32 32 30 26.3.8 26.6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100 100 100 100 100 4.Consumers No Response Very High Very Low Category Normal Mean Total High Low |t| 3.36 Views of the two groups of respondents when subjected to Z test indicate that the similarity in the views is highly significant.12 4.9 0 2.4 Views on Tariff for Commercial Consumers .COM – Electricity Industry © M.57 Sig Sig Sig Sig Sig Sig Not Not A good number of the employees and experts considered the tariff for commercial consumers to be either high or very high.320 |t| 0.032 0.254 3.468 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 38.28 4.40 3.95 4.885 1.355 0. IDEAINDIA.IDEAINDIA.7 54 40 36 40 38 33.899 0.906 7.3 0 40. one can reach the conclusion that the tariff for commercial consumers is on the higher side.4 0 1 0 0 0 0 0 0 0 0 0 100 100 100 100 100 100 100 100 100 3.Employees and experts No response Very High Very Low Category Normal Mean Total High Low sig Not Not Not Not Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 53 52 48 53 52 37 35 32 34 35 11 13 20 13 13.40 4.42 4.

the lights. Another important feature of public lighting is the default in payments of the energy charges by the civic bodies to the Kerala State Electricity Board. As the question of the propriety of tariff for public lighting can create a vide variety of opinions. supply of labour. The mechanism for settling the conflicts is that of joint inspections conducted by the civic bodies and the Kerala State Electricity Board. and number of lights actually burning. The number of consumers under this category is 1398. Different tariff structures are there in the Kerala State Electricity Board. Sarngadharan 2009 214 Tariff for Public Lighting This sector includes the consumers using electricity for lighting of public places such as roads and streets. such as Panchayats. But the civic bodies have not used this facility so far. the spares are to be supplied by the civic bodies and the maintenance works are carried out by the Kerala State Electricity Board.COM – Electricity Industry in the Public Sector in India . Then for maintenance. IDEAINDIA. now the Kerala State Electricity Board has introduced a scheme for metered supply for public lighting. this was also included in the survey to ascertain the different perceptions.COM – Electricity Industry © M.IDEAINDIA. The number of them considering it to be low or very low was very small and the number of those considering it to be either high or very high was still lower. As a solution for this discord. and the lines for it are installed fully at the cost of the civic bodies. Initially. A large number of the consumers rated the tariff for public lighting to be normal. A composite tariff is applied for it without actual metering of the electricity used for the lights. There is always conflict between the civic bodies and the Kerala State Electricity Board on the supply of spares. for public lighting. Municipalities and Municipal Corporations having constitutional backing. Public lighting in Kerala is owned by and maintained at the cost of local self governments.

54 2.3 23 16 0 16 20 17.5.41 2. Table 9.4 0 9.IDEAINDIA.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 3.COM – Electricity Industry in the Public Sector in India .6 45. Thus the tariff of the Kerala State Electricity Board for public lighting can be concluded to be within the normal range.38 2.6.45 Total 100 100 100 100 100 High Low 29 27 25 18 25 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 2.885 0.14 2.96 2.3 42 52 74 64 60 62.212 0. or very low only a negligible section of them considered it to be either high or very high.544 3.785 3.468 0.4 5.84 The majority of the employees and experts also felt the tariff for public lighting to be normal.48 3.8 100 100 100 100 100 100 100 100 100 2.5 2 3 0 2 4 4 5 0 3 43. Sarngadharan 2009 215 Table 9.6 6 4 20 12 10 8 6.Employees and Experts No response Very High Very Low Category Normal Mean 2.68 2.42 2.305 |t| 1.5 47 45 75 50.28 3.2 60 53.215 0.33 3.357 2.40 2.8 22 20 22 7 18 0 0 0 0 0 Views of consumers and experts and employees when subjected to Z test indicate that the similarity in the views is significant. Views on Tariff for Public Lighting .7 40 8.COM – Electricity Industry © M.4 17 18 0 0 0 4 4. Though a good number of them felt it to be low.543 sig Sig Sig Sig Sig Sig Not Not Not Not Not Not Sig sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 3.3 4 12 10 10 8 8.3 9 0 4 0 0 0 0 3.244 3.9 0 6.Views on Tariff for Public Lighting .964 1. IDEAINDIA.2 23.8 0 18.563 2.98 3.

The Electricity Act 2003 envisages removal of the entire cross subsidies in phased manner (Modi. silkworm breeding. Vijayam 2005). private livestock farms with more than four milky cattle.3 23 16 0 16 16 17.092 0.90 3.9 0 6.14 3.40 2.4 46.2 40 52. They include poultry farms.742 2. and private pig farms. government livestock farms.47 2.00 2. The opinions of the respondents of the survey on the level of the tariff for them also were collected and the results are given in Tables 9.82 Sig Sig Not Sig Sig Not Not Not IDEAINDIA.7 3 8 18 10 8 8.7 0 8.965 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 2.6 100 100 100 100 100 100 100 100 100 2.98 2.8.475 0.6 6 4 10 24 10 8 6.COM – Electricity Industry in the Public Sector in India sig .6 .COM – Electricity Industry © M.4 0 10 5.7 44 56 54 64 64 62. There are many State Electricity Boards offering electricity to agricultural consumers free of cost.486 3.63 3. and combination of livestock and dairy farms.54 2.IDEAINDIA. In fact the national policy on electricity is against giving free electricity to agricultural consumers.8 60 18. 16 18 10 0 0 4 4. Table 9. The Kerala State Electricity Board is offering them a tariff at a rate lower than that prescribed for domestic consumer.3 8 0 4 0 0 0 0 3.586 5. Only a portion of the respondents found it to be low or very low and a negligible section of them found it to be high or very high.332 1. Sarngadharan 2009 216 Tariff for Irrigation and Dewatering There is a concessional tariff allowed to consumers using electrical energy for agricultural purposes.7 and 9.313 1.7. all cultivations including lift irrigations and dewatering.6 23. The number of consumers who considered the tariff for irrigation and dewatering to be normal constituted the majority.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 3.Views on Tariff for Irrigation and Dewatering .

5 49 25 19 46 24 22 80 12 8 52.4 17.Employees and Experts No response Very High Very Low Category Normal Mean Total High Low |t| 1. The results on the survey on the opinion on the level of tariff for public waterworks is given in Tables 9.COM – Electricity Industry in the Public Sector in India sig .46 2. Table 9. But as it is going to affect a vital infrastructure at service to the public. these are run by government agencies.499 2.COM – Electricity Industry © M.43 2. Sarngadharan 2009 217 A good majority of the employees and experts rated the tariff for irrigation and dewatering in the Kerala State Electricity Board to be within the normal range. IDEAINDIA.508 0. This leads to the conclusion that the tariff for irrigation and dewatering in the Kerala State Electricity Board is normal. Tariff for Public Waterworks Public waterworks include various drinking water supply schemes.6 0 0 0 0 0 100 100 100 100 100 2. A special feature noted in waterworks owned by the government is its heavy default in payments.8 24. Normally.4 44.5 19. There has been an instance when the Kerala Water Authority abstained from payments for more than a year.47 Not Not Not Sig Views of the two groups of respondents when subjected to Z test indicate that the similarity in the views is significant.9 and 9.38 2. the tariff formulation system under the management of the government cannot ignore its importance.790 Technical Employees 2 Administrative employees 2 Other Employees 3 Experts 0 Total 1.8. It does not affect the public directly.IDEAINDIA.72 2.5 30.10 A good majority of the consumers observed the tariff for public water works to be normal.159 0. A new system of community public water supply schemes has now come up wherein the initial invest alone is met from government funds and the recurring expenses including the electricity charges are met by the beneficiaries.8 Source : Field Survey 3. Only a very small section of them considered it to be either low or very low and a negligible number of them considered it to be high or very high.5 5 5 0 3.Views on Tariff for Irrigation and Dewatering . Only a negligible group of them found it to be high or very high and a little higher number rated it to be low or very low.

7 0 7.978 2.12 3.82 2.COM – Electricity Industry © M.400 0.15 3.9.003 0.10).88 2.21 3.00 A large section of the employees and experts found the tariff for public water works to be normal.8 2.4 0 3.2 0 0.92 2.490 3. Table 9.30 3.3 3 8 10 10 8 8.4 4.4 67.5 15 11 12 15. The statistical test confirms that similarity in the views of employees and experts do not vary significantly (9.908 1.4 0 0 0 2 0 0 2.915 0.339 sig Not Sig Not Not Sig Not Not Not Not Not Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 3.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 1.Employees and Experts No response Very High Very Low Category Normal Mean 2.2 80 64.6 20 18.2 22 36 14 4 0 12 15.73 3.5 5 5 0 3.86 2.86 Total 100 100 100 100 100 High Low 19.Views on Tariff for Public Waterworks .7 4 10 8 10 10 6.896 0.6 5 0 5 0 3 Views of the two groups of respondents when subjected to Z test indicate that the similarity in the views is significant.8 Source : Field Survey 3.5 4 4 0 2. Sarngadharan 2009 218 Table 9.8 100 100 100 100 100 100 100 100 100 2.91 2.10.2 63.80 3.COM – Electricity Industry in the Public Sector in India .3 52 68 72 80 64 62.163 1.Views on Tariff for Public Waterworks .4 Technical Employees 2 Administrative employees 2 Other Employees 3 Experts 0 Total 1.IDEAINDIA.05 2.418 0.9 0 6 6. Only a very small number of them thought otherwise.7 5 0 4 0 6 4.613 |t| 0. IDEAINDIA.5 74 72 88 73.656 1. Thus the conclusion can be that the tariff for public water works in the Kerala State Electricity Board is normal.

saw mills. freezing plants. workshops using power only for production and / or repair.041 5.662 7.2 0 0. dairy farms.02 2.2 0 0 0 0 0 0 2. ice factories.IDEAINDIA.2 4. and allied works.8 100 100 100 100 100 100 100 100 100 3. computer consultancy services with SSI registration engaged in software services and DTP. software development for recording/ duplication. CD recording / duplication. book binding. software technology.COM – Electricity Industry in the Public Sector in India .11. garment making.COM – Electricity Industry © M. oil mills.6 20 11.804 0. cold storage. hatcheries. Table 9.622 3. SSI units engaged in computerized colour photo printing.154 1. rice mills. agricultural nurseries without sale. rubber smoke houses. flour mills.8 Source : Field Survey 9. sewage pumping. shrimp farms.25 3.283 sig Sig Sig Not Not Not Sig Sig Not Domestic 3.9 80 58. A good majority of the consumers considered the tariff for industrial LT consumers to be within the normal range. mushroom farms.2 14 18 14 4 0 0 15.46 4. bakeries with manufacturing.8 68.9 0 15.3 9 8 8 26 44 28. electric crematorium.7 5 0 4 0 6 4. the opinion of the remaining section slightly favoured the IDEAINDIA.27 A large number of the employees and experts also felt the tariff for the above category to be within the normal range.Views on Tariff for Industrial LT Consumers . prawn peeling units.06 3. Sarngadharan 2009 219 Tariff for Industrial LT Consumers LT industrial consumers include general purpose industrial consumers (single or three phase) namely grinding mills. pumping water for non-agricultural purposes. Only a small potion thought otherwise. audio-video cassette recording / duplication.319 1.80 3. manufacture of audio / video cassettes.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 3. printing press. and marble cutting. screen printing or glassware or ceramics.4 0 3.11 3. information technology. power laundries. milk chilling plants.93 2. diamond cutting.7 65 72 74 64 20 8.580 1. Here also. stone crushing.97 3.3 Commercial 3 Public lighting 6 Agriculture 10 Public Water Works 10 Industrial LT 30 Industrial HT 40 Others 0 Total 10.

Views on Tariff for Industrial LT Consumers .8 100 100 100 100 100 3.2 2. diary farms.96 3. The expression ‘high tension consumer’ means a consumer who is supplied with electrical energy at a voltage of either 22.5 4 3 0 2.23 3.22 Views of the first group. information technology.095 2.25 3. the high tension and extra-high tension consumers.COM – Electricity Industry © M. namely. HT industrial consumers are divided into non-powerintensive and power-intensive industries.4 0 0 4 0 0.IDEAINDIA. HT industrial consumers include printing press (including presses engaged in printing dailies). Table 9.000 volts under normal conditions. consumers and the other group employees and experts when subjected to Z test indicate that the similarity in the views of both the groups is not statistically significant.000 volts or 11. plantations.agricultural pumping.318 3. It leads to the conclusion that the industrial LT consumers are subjected only to a normal tariff. Tariff for Industrial HT and EHT Consumers This tariff is applicable to large industries and there are two categories of consumers under this. In both HT and EHT categories. software development.016 sig Not Not Sig Sig Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 13 12 15 0 10 16 21 22 12 17 59 49 51 72 58 10. Sarngadharan 2009 220 high/ very high range. granite crushing units. and all other non. EHT industrial consumers are also divided into non-power-intensive and power-intensive industries. industrial consumers. Corporations Municipalities. drinking water pumping for the public by the Kerala Water Authority.Employees and Experts No response Very High Very Low Category Normal Mean Total High Low |t| 0. Extra-high tension consumers include consumers using electrical energy at a voltage exceeding 33.COM – Electricity Industry in the Public Sector in India . Panchayats.43 2.5 14 5 16 11. industries which manufacture any one of the following products or using induction arc furnaces or industries engaged in one or more of the following processes are classified as IDEAINDIA.460 0. The statistical test also confirms that similarity in the views of other employees and experts are significant.000 volts.12.

796 1.8 8 9 18 6 18 18 28.COM – Electricity Industry in the Public Sector in India . Sodium metal. Ferro Chrome. Other consumers engaged in production process are grouped under non –power-intensive industries.162 sig Sig Not Not Not Not Not Sig Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 7.3 9 8 16 8 6 13.24 The employees and experts also felt it to be normal.06 3. The statistical test also reveals that the similarity in the views of various categories of employees and experts do not vary significantly.8 68 72 62 64 64 58 8.2 100 100 100 100 100 100 100 100 100 3. Ferro Manganese.402 5. The results of the test are provided in table 9.80 3. Chlorates / Per chlorates.34 3.30 3.13. A good majority of the consumers found the tariff for industrial HT and EHT consumers to be normal. Charge Chrome.3 20 9.14 . Sodium Chlorate. Steel melting industries engaged in electrochemical / electro thermal processes.2 7.532 1.9 80 61. Silicon Carbide.2 4.Views on Tariff for Industrial HT and EHT Consumers .8 4.13 and 9.COM – Electricity Industry © M.4 0 3.IDEAINDIA.14.4 0 1.147 0. Caustic soda. Ferro Alloys. The results are tabulated in Tables 9.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 2.91 2.3 7 12 10 10 14 40 0 11.7 0 0 0 0 0 4.090 1. IDEAINDIA. Potassium Chlorate.465 1.132 0. Table 9.10 3. An evaluation of this tariff was also obtained from the respondents of the survey. Ferro Silicon.7 3 0 4 0 4 4. The number of consumers who thought it to be low or very low was much less than those who thought it to be high or very high.14 3.9 0 12. Those who thought otherwise were small in number and the swing was towards the high/ very high side.42 3. Sarngadharan 2009 221 power-intensive industries: Calcium Carbide.

8 2.6 0 0 4 0 0.454 1.044 0. M/s Tata at Munnar and Techno-park at Thiruvananthapuram are examples.21 Not Not Not Not Views of the two groups of respondents when subjected to Z test indicate that the similarity in the views of both the groups is statistically significant.COM – Electricity Industry in the Public Sector in India sig . Under the new act any number of licensees are permitted in the same area and will be permitted to use lines belonging to other licensees on ‘open access’ basis on payment and conditions decided by the regulatory authorities.21 3.12 3.33 3. But the new Act would encourage them.15 and 9. Considering the views of the both groups the conclusion is that the tariff for the category is normal.035 Technical Employees 12 Administrative employees 11 Other Employees 10 Experts 0 Total 8. A small number of them found it to be high or very high and only a very smaller number found it to be low or very low. and then their number declined.18 3.Employees and Experts response No Very High Very Low Category Normal Mean Total High Low |t| 0. Tariff for Bulk Supply This tariff is applicable to supply of energy to licensees and sanction holders.14.8 Source : Field Survey 15 20 23 23 19 59. Such licensees were more in number in the earlier days. The results on survey on the level of tariff levied to the licensees are given in Tables 9. The Trissur Municipal Corporation.5 5 3 0 2. The results of the test are provided in table 9.Views on Tariff for Industrial HT and EHT Consumers .327 1. These consumers normally purchase power from the Kerala State Electricity Board for resale to other consumers. This tariff is known as ‘Grid Tariff. The statistical test also reveals that the similarity in the views of various categories of consumers do not vary significantly.COM – Electricity Industry © M. Sarngadharan 2009 222 Table 9.5 50 55 66 58 12 14 5 11 10.IDEAINDIA.8 100 100 100 100 100 3.15 IDEAINDIA.16 Most of the consumers rated the tariff to be normal.

638 1.3 9 16 8 18 18 15. The statistical test confirms that similarity in the views of employees and experts except administrative employees do not vary significantly (9.3 6 6 16 12 6 8.9 0 9.4 7.9 20 8.3 73 64 58 56 54 64.IDEAINDIA.Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 1.25 3.5 37 32 20 24.128 1.68 2.3 8 12 12 12 12 8.Views on Tariff for Bulk Supply .6 20 12.8 Views of consumers and experts and employees when subjected to Z test indicate that the similarity in the views is significant.8 100 100 100 100 100 100 100 100 100 3.8 Source : Field Survey 2 2 2 11 3.16.71 2. None of them found to be very low but a few thought it to be low.16) Table 9. Only a very small portion of them considered to be very high or very high.2 0 2.070 0.8 Technical Employees 2 Administrative employees 3 Other Employees 2 Experts 0 Total 1.15.4 4 1 2 2 2 6 2.82 Total 100 100 100 100 100 High Low 17.629 0.91 2.09 3.20 3.5 50 55 69 63. Sarngadharan 2009 223 Table 9.COM – Electricity Industry in the Public Sector in India .Views on Tariff for Bulk Supply .8 0 0 0 0 0 6 8 9 0 5.610 sig Not Not Not Not Not Not Not Not Not Sig Not Not sig Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 7.2 67.8 4.17 A good majority of employees and experts also rated the tariff for the category to be normal.473 |t| 1.13 3.454 2.418 0.004 1.4 60 64.26 3.7 3 0 4 0 4 0 0 2.Employees and Experts No response Very High Very Low Category Normal Mean 2.COM – Electricity Industry © M.88 2.8 72.728 0.30 3. Thus the tariff for bulk supply in Kerala State Electricity Board can also be concluded to be normal IDEAINDIA.204 0.00 3.215 0.4 9.18 3.

In Kerala. There is an argument that keeping its tariff low would help more traffic and thereby increased growth of industries. The statistical test also confirms that similarity in the views of technical employees and other employees are significant.273 sig Not Not Not Not Not Not Sig Not Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 0 0 0 0 0 0 0 0 0 3. if the power is so cheap.4 40 27. Table 9.864 4.433 0. the railway electrification is going on at an increased pace now. The Kerala State Electricity Board provides electricity to the railways at a special tariff arrived through mutual agreement.Views on Tariff for Railway Traction .Consumers No response Very High Very Low Category Normal Mean Total High Low |t| 1. Though almost an equal amount of consumers opted not to answer this question.COM – Electricity Industry © M. The largest number of consumers rated the tariff for railway traction to be low.4 0 32 100 100 100 100 100 100 100 100 100 2.50 2.IDEAINDIA.97 2.318 0.303 0. At the same time.3 3 4 4 8 4 4.218 0. Sarngadharan 2009 224 Tariff for Railway Traction The railways use electricity for traction use and they take a large quantity of electricity through a few substations specially made for the purpose.161 0.38 2.39 2.7 60 33.48 The majority of the employees and experts evaluated the tariff for the category to be low.7 33 30 34 42 38 6.4 0 4 23.8 36.47 2.40 2.114 1.17. A small number of them rated it to be normal though none of them rated it to be very high or very low. none of them found it to be very high.7 35 36 38 24 32 24.51 2.32 2.2 4 1 4 6 2 4 0 0 3 32. the railways may use Kerala’s cheaper power for use in other states also.18) IDEAINDIA. A unique feature is that the monopoly of the Kerala State Electricity Board cannot be applied to the railways since they can get supply from the neighboring states also.3 28 26 18 24 22 64. Even those who found it to be high were also negligible in number. (Table 9.COM – Electricity Industry in the Public Sector in India .

There are certain states in India where the agricultural consumers are provided with free electricity.8 48 37 32 29 54 0 0 0 0 0 7 10 9 0 6.01 2.10 2.971 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 0 0 0 0 0 2 2 2 5 2.659 1.COM – Electricity Industry © M. The decision on the quantum of subsidy so provided is made not on strict commercial basis.demand considerations are not seen seriously applied in the decision.Employees and Experts No response Very High Very Low Category Normal Mean Total High Low |t| 4.18.51 2.Views on Tariff for Railway Traction .09 2. The principles of costing and the supply .switching off of the motors even after use. Here the concessions are not unlimited and part of the subsidy is met by the government through the agricultural department.IDEAINDIA. use of very inefficient. This is done because of the feeling that the Kerala State Electricity Board being a public sector undertaking has the social responsibility of supplying this essential commodity to these categories of consumers at an affordable rate. the tariff offered by the Kerala State Electricity Board for railway traction can be concluded to be on the lower side. Sarngadharan 2009 225 Table 9. cheap and old motors.747 2. Subsidies in Tariff Subsidies in the energy charges have been allowed to certain categories of consumers by the Kerala State Electricity Board. Reports from such states highlight the misuse of energy like non . and use of electricity from agricultural connections for other purposes In Kerala.6 100 68 59 49 100 2. Mostly.COM – Electricity Industry in the Public Sector in India sig . political leadership or the government interferes in the tariff subsidy decisions. the amount of subsidy allowed is not as big as in other states.5 36.24 Sig Not Sig Not Views of consumers and experts and employees when subjected to Z test indicate that the similarity in the views is significant. Agricultural consumers are provided with the maximum subsidy. The connections to agricultural consumers are not even metered in some states.6 43 18.858 1. Thus.5 16 14. IDEAINDIA.

libraries. subject to certain conditions.19 IDEAINDIA. In this case also different rates are applicable to different consumption slabs.COM – Electricity Industry in the Public Sector in India . Above that. The subsidies affect the Kerala State Electricity Board through reduction in revenue.COM – Electricity Industry © M. consumers and experts. The opinion of the largest number of them was that it was unfavourable or highly unfavourable. Commercial consumers are the worst hit sufferers of this principle. 300. The new legislation about electricity – the Act of 2003 envisages step-by-step removal of all subsidies. and sports/arts club. 500 units and for use above 500 units. E 2000) The effect of these subsidies was analysed by collecting the viewpoints from of the staff.IDEAINDIA. Consumers using less than 20 units per month are given free electricity. The responses duly quantified are given in table 9. Certain other categories of consumers like offices of political parties approved by election commission. 150. Though the consumers are the beneficiaries of the subsidies in tariff. there are different slabs for use up to 40. 120. and even prevent them from using electricity (Balanandan. Only the lower consumption slabs enjoy considerable subsidy. are also allowed a subsidised tariff very near to the tariff for domestic consumers. Another question to be considered is whether the removal of all subsidies would make electricity unaffordable to certain sectors of consumers. charging other consumers more. depending upon the monthly consumption. they did not hesitate to record their opinion about subsidies. Sarngadharan 2009 226 Domestic consumers constitute another segment enjoying subsidy at varying rates. 200. Part of the loss of revenue through providing subsidy is tried to be offset through crosssubsidy principle that is. 80.

Consumers unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total |t| 0.COM – Electricity Industry © M.79 1.9 0 16 37 25 32 24 34 38 31 20 32 23 48 22 10 22 28 24 80 28 15 27 4 4 0 4 24 0 13 0 0 0 0 0 0 0 0 0 100 100 100 100 100 100 100 100 100 2.20.Employees and Experts unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 0 0 5 0 1 3 7 6 5 5 38 37 32 35 36 36 35 37 38 36 23 21 17 22 21 0 0 3 0 1 100 100 100 100 100 2.3 3.477 1.COM – Electricity Industry in the Public Sector in India sig sig .58 2.2 2.74 3. Views on Subsidies in Tariff .46 1. Views on Subsidies in Tariff .23 2. Sarngadharan 2009 227 Table 9. The majority of the employees and experts took the subsidies as either unfavourable or highly unfavourable.580 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 8 0 24 30 8 14 11 0 11 17 0 18 32 36 16 8.28 Not Not Not Not IDEAINDIA.36 3.798 1.23 2.672 0.30 2.900 0.253 3. Table 9.205 1.43 2.20) confirming its negative impact on financial performance.492 7.83 Not Sig Sig Sig Sig Not Not Not A small portion of them found it normal and a still smaller potion found it favourable.IDEAINDIA.98 3.441 2.204 |t| 0.159 5.19. The statistical test also reveals that the similarity in the views of employees and experts does not vary significantly (Table 9.08 2.

The Kerala State Electricity Board has a well established transfer policy. experience is the most vital qualification of the personnel (Sheikh. This will also help in providing repetitive and progressive levels of training in each of the areas. however. In certain areas like design. A. A very long retention in a particular area may. specialisation can be acquired only through long experience in a particular section or area. This can be achieved through careful selection of employees.IDEAINDIA. The question of frequent transfers is examined against this situation. In government and public sector organizations. 2003) The aforesaid situation reveals the necessity of retaining an employee. cause boredom. and construction of power houses and substations. This would help the employee to acquire functional skill and specialisation.M. In areas like erecting. Thus one can conclude that the subsidies in tariff are unfavourable to the organisation. This calls for an optimum duration for posting and employing in different areas. either technical or administrative. With the limited facilities and weak mechanism for training in the Kerala State Electricity Board. retaining a person for a long period of time is normally considered to be harmful because of the fear of developing vested interests. for a fairly reasonable period of time in a functional area. Sarngadharan 2009 228 Views of consumers and experts and employees when subjected to Z test indicate that the similarity in the views is significant. IDEAINDIA. it may take years to mould a competent specialist. and research. The modern industrial or business outlook of confidence in the appointed personnel has not crept into the public sector. Frequent Transfer of Employees With the emergence of many modern technological innovations electricity industry has become so complex that a considerable amount of specialisation would be necessary in almost all sectors of operation. This notion stems out from the belief that government employees are inherently corrupt.COM – Electricity Industry © M. Employees are normally transferred at a particular interval and there is no restriction for inter-function and inter-area transfers. The disadvantage of non-deeper experience in different sectors has to be weighed with the advantage of providing a comprehensive understanding of the whole organisation. allotment of suitable jobs and allowing them to work there for enough period of time to acquire sufficient expertise.COM – Electricity Industry in the Public Sector in India .

82 1.325 1.643 1.76 1.73 1.85 1.4 30 34 28 30 24 30 22 0 29 0 0 0 0 0 0 0 0 0 Total 100 100 100 100 100 100 100 100 100 1.4 8 8 14 18 18 22 22.Views on Frequent Transfer of Employees .00 1.928 0.2 0 13.22.79 1.2 58.Employees and Experts unfavourableHighly Highly favourable Unfavourable Favourable No response Category Normal Mean Technical Employees Administrative employees Other Employees Experts 0 0 0 0 0 0 0 0 7.7 54 52 46 48 44 55.643 0.00 2.Consumers unfavourableHighly Highly favourable Unfavourable Favourable No response Category Normal Mean |t| 1.98 2. Sarngadharan 2009 229 A large majority of the consumers found the frequent transfer of employees in the Kerala State Electricity Board to be unfavourable or highly unfavorable to the successful functioning of the organisation.272 0.6 100 53.72 Not Not Not Not IDEAINDIA.203 |t| 0.IDEAINDIA.459 0.408 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 0 0 0 0 0 0 0 0 0 3.781 0.00 2. The statistical test also reveals that the similarity in the views of various categories of employees and experts does not vary significantly.5 8 7 9 57.COM – Electricity Industry © M. Table 9.5 60 65 54 35 32 28 37 0 0 0 0 100 100 100 100 Total 1. Views on Frequent Transfer of Employees .COM – Electricity Industry in the Public Sector in India sig sig .93 Not Not Not Not Not Not Not Not Except for a negligible number of employees and experts who viewed the frequent transfer of employees in the Kerala State Electricity Board as normal all the others found it unfavourable or highly unfavourable.456 0.428 0.14 2.3 4 6 6 10 4 0 0 4. The number of consumers who viewed it as normal or favourable was negligible and none of them found it to be highly favourable.610 0.21.00 2. Table 9.

If the society has a strong feeling of collective ownership of the public property. willingness of the management to understand the problems of the employees. Attitude of Employees In public sector organizations.74 The views of consumers and experts and employees. behaviour to consumers and sincerity in working. the society develops a trend of selfish exploitation of the public property or money. IDEAINDIA.COM – Electricity Industry in the Public Sector in India . The general attitude of the society towards public property and assets is one of such important factors. S. fairness in disciplinary proceedings. This creates a vicious circle. The term ‘attitude’ is here used in a very generic sense. The attitude of the management has also an important role in moulding the attitude of the employees. and level of workers’ participation in management are among the elements in this regard. indicates that the similarity in the views is significant.COM – Electricity Industry © M. Sarngadharan 2009 230 Total Source : Field Survey 0 0 7. which in turn pollutes the attitude of the employers. The general belief that public sector organizations like the Kerala State Electricity Board are polluted with corruption creates an unhealthy attitude of the public towards the employees. amenities and conditions of working. and sense of owning the organisation. The attitude of the public towards the employees also affects the general attitude of the employees. The attitude of the employees towards the uplift of the organisation has effect on their motivation. The attitude of the employees is moulded by a large number of factors. This attribute was also evaluated from the comments of the respondents. on the other hand. unions’ political affiliations.8 58.S. the employees will also develop a corrupt mentality. when subjected to Z test.4 0 100 1. Hence it can be concluded that the frequent transfer of employees is not favourable to the proper functioning of the organisation. driving elements like the surplus motive and the desire for growth of the organisation expressed by the owner or the promoter are absent. The level of remuneration.8 33.IDEAINDIA. timely revisions on it. 2004) If. honesty. the employees who form part of the society will have also an attitude of collective ownership towards the particular public sector undertaking in which they are working (Khanka. equality in dealing with employees of various sectors.

525 Sig 1.COM – Electricity Industry in the Public Sector in India sig .791 Not 3. 9 100 25.IDEAINDIA.000 Not 1.36 2.Views on Attitude of Employees .48 2. None of them found it highly favourable.045 Not 0. Many of them found it normal but only a small section found it favourable.642 Not 1.98 2.Consumers unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Total Mean |t| Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others 0 0 0 0 0 0 0 0 8 8 18 10 16 20 26.133 Not On the other hand. Views on Attitude of Employees .70 2.72 2. Table 9.34 2. 4 0 42 25.COM – Electricity Industry © M. 8 43. Views of consumers and experts and employees when subjected to Z test. 7 0 12. 3 42 48 40 38 40 44.900 Not 1. indicates that the dissimilarity in the views is highly significant.551 Not 1. a good majority of the employees and experts viewed the attitude of employees as favourable or highly favourable. 3 22 20 24 24 32 28. Table 9.00 2.Employees and Experts IDEAINDIA.30 2. Sarngadharan 2009 231 A large number of consumers rated the attitude of employees to be unfavourable or highly unfavorable to the proper functioning of the Kerala State Electricity Board.23. The statistical test also confirms that similarity in the views of employees and experts are significant. 6 23 28 14 26 22 8 0 0 20 0 0 0 0 0 0 0 0 0 Total 0 Source : Field Survey 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.48 1.24.

Sarngadharan 2009 232 unfavourableHighly Highly favourable Unfavourable Favourable No response Category Normal Mean |t| 4. An easier and convenient solution found out by the management was to use contract workers in those positions.COM – Electricity Industry © M.IDEAINDIA. There is every possibility of employees’ responses to the question are likely to be biased. Performance of Contract Employees Populist decisions by the political leadership.095 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 49 46 52 0 39 38 40 32 12 32 7.2 5 6 5 25 9. higher purchase price for the suppliers and creation of unnecessary posts are among the various steps taken without financial discipline.889 2. necessary personnel are available at cheap rates. Thus. it is to be noted that the experts also more or less agreed to the views of consumers.5 8 9 49 16.COM – Electricity Industry in the Public Sector in India sig .59 3.26 4. The unbearable burden of over-staffing is one of results of such activities which became a major problem faced by public sector undertakings like the Kerala State Electricity Board.6 0 0 0 0 0 100 100 100 100 100 Total 4.2 1 0 2 14 3. it can be concluded that the present attitude of employees is not favourable to the organisation and this requires correction through scientific evaluation. Posting contract workers became advantageous to the organisations because it was much cheaper than regular appointments. Apart from IDEAINDIA. Lower tariff to please the public.29 4.403 2.27 2.94 Sig Sig Sig Sig Regarding an attribute like the attitude of the employees opinion of the consumers has to be given due weight because they are at the receiving end of the performance. which crippled the day-to-day movement of the organisation. have resulted in financial breakdown in most of the public sector organizations in the state. neglecting the financial considerations of organisations.979 12. Here. Organisations on the verge of financial breakdown stopped postings in the vacancies which brought the situations to the other extreme. Kerala being a state flooded with unemployed youth. Many essential positions remained vacant.

61 Not Not Sig Sig Not Not Sig Not IDEAINDIA.236 2.587 4.25 and 9.COM – Electricity Industry © M.932 1.2 12 20 4 24 10 14 27 0 15 0 0 0 0 0 0 0 0 0 100 100 100 100 100 100 100 100 100 2.Consumers unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total |t| 0.706 2. A few of them considered it to be normal whereas a still smaller number considered it. The results of the survey on this aspect are given in Tables 9. Sarngadharan 2009 233 the dangers in using inexperienced contract labourers. A very close analysis is called for to evaluate the effect.69 2.3 20 36.72 2.202 0.20 2.307 0.COM – Electricity Industry in the Public Sector in India sig .7 43 30 36 40 28 33.7 9 24 0 8 8 0 0 8.43 3. Table 9. who cannot be made accountable for the very costly equipment entrusted to them. the standard of the maintenance and upkeep of works done by them.28 2.1 60 29.22 3. whose appointments are effected only for a few months cannot be subjected to such a treatment.7 8 18 4 8 12 8.00 2.26 The majority of the consumers considered the presence of contract employees in the Kerala State Electricity Board to be unfavourable to the organisation. Views on Contract Employees.781 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total 8.64 2. The sense of responsibility of the contract workers. contract workers.25. and any losses due to their lack of experience and lower responsibility have not been made the subject of any serious studies. the accuracy of the billing and collection process and any lapse can be dealt with through disciplinary actions. the exploitation of the unemployed youth of the state so posted is to be viewed seriously.6 30 20 24 36 34 38 31. But. The regular workers can be made responsible for the upkeep of the costly equipment.6 36.4 12.IDEAINDIA.9 20 10.572 0.

77 2.41 2. Some of them found it to be normal. Most of them found it unfavourable or highly unfavourable to the smooth working of the Board.88.COM – Electricity Industry © M.163 2. which indicates that the dissimilarity in the views is significant. The statistical test also confirms that similarity in the views of other employees and experts is significant (Table 9.27) Views of consumers and experts and employees when subjected to Z test.Employees and Experts unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total |t| 0.56 2.762 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 5 5 5 11 6 4 9 4 12 7 38 37 26 35 35 36 35 37 27 34 19 14 25 15 18 0 0 3 0 1 100 100 100 100 100 2. ‘The works IDEAINDIA.770 2. Trade Unionism Trade union has become an indispensable element of the modern industrial and business world. Views on Contract Employees . Sarngadharan 2009 234 Table 9.26.48 Not Not Sig Sig The employees and experts also had a similar opinion. the calculated value is 1. It has been providing an organ through which the opinions and view-points of the workers can be made available to the management. it is a convenient interface between the management and the workforce.25 2. Thus. The Government of India has been committed in its labour policy to encourage trade unions in industry right from the earlier years of independence in India. The Second Five Year Plan observes: ‘A strong trade union movement is necessary both for safeguarding interest of labour and for raising the target of production’.IDEAINDIA.COM – Electricity Industry in the Public Sector in India sig . Thus it may be concluded that the presence of contract employees is another area requiring more detailed examination.991 0. The working of trade unionism has been well recognized by the Government of India.

it was alleged. Though in the initial years. B. Of late. Naturally. Kerala witnessed the failure of many strong labour agitations which caused the gradual deterioration of the strength of trade unions. the activities of trade unions have made a very strong impact in the firm’s functioning. At a certain stage. The Government of India expected that the trade unions ‘should be prepared for the discharge of the responsibilities which attach to the positions’. and its consequences for the structure and behaviour of unions In the Kerala State Electricity Board. a study of trade unions becomes a crucial topic in the industrial relation area. The attitude to trade unions should not be just a matter of toleration. Trade unions in the Kerala State Electricity Board were among the strongest trade unions in the state.R. effect of multiple unions. Certain agitations. Trade unions have been accepted as an essential part of the apparatus of the industrial and economic administration of the country. nature and pattern of relations between improvement of unions in politics and industrial relations. organisation and collective bargaining is to be accepted without reservations as the fundamental basis of mutual relationship. the weakening of IDEAINDIA. They should be welcomed and helped to function as part and parcel of the industrial system’.IDEAINDIA. inter-union and intra-union processes and their consequences. Sarngadharan 2009 235 right of association.COM – Electricity Industry © M. Various studies have been made to analyse the labour-management co-operation. they became so militant and arrogant that the financial wreck of the Kerala State Electricity Board was not considered by the trade unions with the responsibility that the Government of India envisaged in the references above. The black marks and shadows cast on the trade union movement of the state by those incidents have really caused a serious degradation in its credibility. organisation and process that includes their structure. The various reports of the government emphasized the need to enlist the support of trade union movement to improve worker-management relationship in the public sectors. the activities of the trade unions were carried on with a sense of responsibility. 1987). This statement from the First Five Year Plan document indicates the initial sincerity of the Government of India towards the trade union movements (Seth. the properties of the Kerala State Electricity Board worth lakh of rupees were damaged with the support of trade unions themselves have made those trade unions notorious in the view of the public. and beneficial to the organizations. Since the conflict or co-operation between worker and management is greatly influenced by the nature of the workers.COM – Electricity Industry in the Public Sector in India . conflicts in the context of developing economy.

3 60 42. different and the trade unions seem to recognize the realities and take a more responsible stand.675 2. the present context is so complex that a serious analysis becomes imperative.Consumers unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Total Mean |t| Domestic 3.500 0.16 2. the majority of the employees could not see any harm in the trade unionism. and only a negligible section of them found it favourable.40 2.36 2.09 2. IDEAINDIA. The different trade unions in different sectors are in various stages of deterioration or revival. So. Many industries and public sector organizations have resorted to autocratic style of management.4 Source : Field Survey 6 0 22 4 8 4 4.45 0. Sarngadharan 2009 236 trade unions also caused deprival of the benefits of the trade union movements to the industries of the state.27 3. The results of the test are provided in table 9. The number of those who took it as unfavourable or highly unfavourable was small. The statistical test also reveals that the similarity in the views of various categories of consumers except public lighting and industrial HT does not vary significantly.7 42 28 36 34 38 20 40 35.Views on Trade Unionism .594 0.27.27. .918 1. The recent trends are.64 2. the majority of consumers had the opinion that it was unfavourable or highly unfavourable to the performance of the organisation.4 0 6 36.3 43 30 36 40 48 53. Regarding the effect of trade unionism among the employees of the Kerala State Electricity Board.20 2.IDEAINDIA. The majority of them found it to be as normal.COM – Electricity Industry in the Public Sector in India sig .446 1.48 2.540 1.2 0 0. Table 9.944 5.2 100 100 100 100 100 100 100 100 100 2.115 Not Not Sig Not Not Not Sig Not Naturally.2 43.4 11 15 4 24 10 10 20 0 13 0 0 0 0 0 0 2. however. Though a good number of them considered it to be normal and only a negligible number of them viewed it as favourable. This question was included in the survey in an effort to evaluate the effect of the operation of trade unions in the management and performance of the organization.3 Commercial 0 Public lighting 16 Agriculture 0 Public Water Works 8 Industrial LT 0 Industrial HT 0 Others 0 Total 3.COM – Electricity Industry © M. with eventual failure.

a very vital and essential commodity for the society.Views on Trade Unionism . one can conclude that the employees are using trade unionism in the positive way. Sarngadharan 2009 237 The statistical test also confirms that similarity in the views of technical employees and experts is significant.058 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 7 9 5 0 6 8 7 5 5.Employees and Experts unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Total Mean |t| 3.6 6.942 0. for equitable development of the infrastructure and network in developed as well as IDEAINDIA. but they fail to convince the most important segment of the stakeholders.IDEAINDIA. it is seen that the employees were seeing it as normal whereas the consumers’ opinion swing towards the ‘unfavourable’ side. It calls for major changes in the activities of the trade unions to match the specific needs of the public utility organisation.998 4. 5 23 60. Privatisation Policies Whether electricity industry is to be retained in the public sector or left out to the private sector is a question under active consideration of the administrators. Table 9.521 0.93 2. It aims at commercilisation of the electricity sector.60 2.33 2. It was done aiming at government intervention and presence in the production and distribution of electricity.69 Sig Not Not Sig Thus. From the ongoing discussion. 2 0 0 0 0 0 100 114 104 74 100 2. 6 6 4 0 0 3.COM – Electricity Industry in the Public Sector in India sig . doing away with the reservation of the industry for the public sector It was the Indian Electricity Act 1948 that provided for the formation of the State Electricity Boards in the public sector. 2 15 62 61 46 24.4 66 31 30.28. The latest Act-The Indian Electricity Act 2003-basically alters the policy on electrical industry in the country.COM – Electricity Industry © M. the consumers. Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the views is significant.64 2.

Thus. The State Electricity Board grossly failed to meet the increasing demands. Inefficiency inherent to the public sector was also one of the reasons for the financial decline. IDEAINDIA. S. Considering the importance of the growth of the electricity industry in the economic development of the country. the circles advocating privatisation may try to offend the Kerala State Electricity Board through undue criticism. The ruling LDF and the UDF in opposition at present have made it clear that they are against privatisation of electricity industry in the state. privatisation efforts as envisaged in the Act were not fully accepted by all.IDEAINDIA.COM – Electricity Industry in the Public Sector in India . 2003) The result was the introduction of the new legislation . But. The level of commendable growth made in these years is described elsewhere. and the Kerala State Electricity Board was among the best in this area. The generation. transmission and distribution capacity showed inspiring growth. The financial position of the State Electricity Boards started deteriorating mainly because of their inability in fixing a rational tariff. Privatisation of the sector became legally possible. In the initial years the State Electricity Boards made wonders in achieving the aims behind its formation. and publicity against tariff rationalization. The efforts in reaching the backward and rural areas also succeeded to a great extent. the operation of the State Electricity Board did not reach the level to meet the expectations and requirements matching the growth in other sectors. It opened the electricity sector to everybody and even the licence system in the industry was almost done away with. Kerala achieved electrification of hundred percent villages much earlier. The privatisation moves or efforts have multi-pronged effects in the operation of the Kerala State Electricity Board. It may benecessitated for improving efficiency and the quality of operations. it was felt to be the duty of the government to ensure its utilisation under state control. But many industrialists and a section of the media are arguing for privatisation. the State Electricity Board partially succeeded in achieving the social objective of a balanced growth of this vital infrastructure. The globalisation trends also brought out opinions against keeping the private sector away from the vital industry (Shivamallu.The Indian Electricity Act 2003.COM – Electricity Industry © M. Sarngadharan 2009 238 backward areas including the rural sector. The financial wreck finally reached such a stage that expansion and growth became impossible for the cash-starving State Electricity Boards. But in Kerala. On the other hand.

Sarngadharan 2009 239 It against the backdrop of two entirely opposite arguments for and against privatization it was felt appropriate to assess the views of the respondents covered under the study on the effects of privatisation efforts. while some of them found it to be normal. A good majority of the consumers found the privatisation policies being adopted in the Kerala State Electricity Board to be either unfavourable or highly unfavourable to the organisation. IDEAINDIA. Tables 9.COM – Electricity Industry in the Public Sector in India . Those who found it to be favourable were negligible in number.29and 9.30 contain the results.COM – Electricity Industry © M.IDEAINDIA.

A large number of them found them to be either unfavourable or highly unfavourable.16 3. Sarngadharan 2009 240 Table.6 Others 0 Total 7.34 100 2.COM – Electricity Industry © M.8 20 9. The statistical test also reveals that the similarity in the views of various categories of employees and experts does not vary significantly.4 Total 100 2.2 38. Only a small number felt it to be normal and only a negligible section found it to be favourable.6 16 16 20 26 26 4 6.27 100 2.COM – Electricity Industry in the Public Sector in India sig .IDEAINDIA.57 Not Not Not Sig Sig Sig Sig Not The employees and experts were strong in disapproving the privatisation policies.23 100 2.6 8 9 11 5 8.5 0 3 0 3. Views on Privatisation Policies .6 Source : Field Survey 8 8 8 8 4 16 17.4 30 31 32 34 34 32 28.3 Commercial 7 Public lighting 8 Agriculture 0 Public Water Works 0 Industrial LT 18 Industrial HT 15.684 2.5 21 17 22 21.295 2.81 9 Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 7.1 60 35.9 20 31.14 3.8 47.60 2.913 0.31 Not Not Not Not IDEAINDIA.5 37 32 35 25.2 24.Employees and Experts Unfavourable Highly unfavourable Favourable Highly favourable No response Category Normal sig |t| 0.30.Consumers unfavourableHighly Highly favourable Unfavourable Favourable No response Category Normal Mean |t| 0. The results are provided in Table 9.67 1 0.29.069 Mean Domestic 7.418 0.26 3 1.52 2.511 0.52 2.606 3.8 0 0 2 0 0.30 Table.52 0 0.52 2. Views on Privatisation Policies .092 2.9.5 33 35 38 40.47 100 2.7 38 32 32 36 30 31.7 0 16 0 0 0 0 0 0 0 0 0 100 100 100 100 100 100 100 100 100 Total 2.24 2.2 12.9.04 2.

A general thinking on the power sector was that it was so inefficient as to hamper the economic growth of the country. adoption of what is applauded as more efficient methods and practices which prevail in the private business enterprises are tried during these years. had already declared that the Government of India’s disinvestment privatisation policies and programmes are not inspired by ideological considerations and preferences. This leads to the conclusion that privatisation policies would not do any good to the Kerala State Electricity Board. The newer trends are to free the electricity industry from the ownership of the government and to enter the commercially competitive world. Sarngadharan 2009 241 Views of consumers and experts and employees when subjected to Z test. For their running. tremendous changes are tried in the power sector. The first step taken includes dilution of budgetary support to the public sector undertakings. In addition. a general privatisation or globalisation wave is passing through most of the countries of the world and it is piloted by developed countries like the USA through various international organisations. The governments and the political parties leading the government have changed many a times.economic policy as well as political management and foreign relations. The concept of privatisation of public sector industrial and commercial undertakings looms large in wide discussions. This part of its reforms rhetoric. Gour.IDEAINDIA. The present UPA government at the centre has been sometimes trying to exhibit a new face. but the basic policies have a continuity and stability.COM – Electricity Industry © M. rail and other purposes. agricultural. He saw the cause of trouble in administration and planning. there is a IDEAINDIA. In Kerala. As a result of the above. commercial. indicates that the similarity in the views is significant. the Government of Kerala was not ready to accept it without a pinch of salt. G. The Electricity Act 2003 was the declaration of the policies of the Government of India. However. India has already adopted the globalisation policies. which is combined with populist posturing on all the fronts and issues . and is in various stages of implementation. which has been a constant source of worry.L. Policies of Government Government policies on the power sector are undergoing drastic changes globally. The leadership of the UPA Government.COM – Electricity Industry in the Public Sector in India . identified electricity as a basic requisite for domestic. The Government of Kerala is reluctant to allow privatisation in the power sector and is very slow in the reform process.

45 6 1.0 0 2.80 5 1.1 3 3.24 2 1.COM – Electricity Industry © M.64 3 0. The impact of the government policies on the performance of the Kerala State Electricity Board is an area requiring close analysis.6 1 2. the maximum number of them viewed it as normal followed by views as unfavourable and highly unfavourable.4 0 6. The consumers’ opinions on the new policies of the government in the power sector did not show a very clear trend.7 9 2. 7 20 21. and it was also presented before the respondents of the survey for their views.14 8 0. 6 Total 18 18 20 24 30 26 26.31). The IDEAINDIA.8 24 8 22.9 8 2. 7 14 14 10 8 16 22.7 40 21. 2 6.Consumers unfavourableHighly Highly favourable Unfavourable Favourable No response Category Normal Mean |t| 0.31.COM – Electricity Industry in the Public Sector in India sig .8 8 Not Not Not Not Not Not Not Not The employees and experts did not show a clear-cut swing towards any opinion regarding the policies of the government in the power sector.7 2 3.19 6 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 17. 6 20 21 20 24 18 23 21 14 26 22 2. ( Table 9.69 0 0. 2 40 15.IDEAINDIA.8 0 16 18. 2 0 19 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 2.3 15 16 14 14 18 17.2 3 3. the maximum number of them found it as unfavourable to the performance of the Kerala State Electricity Board. The statistical test also reveals that the similarity in the views of various categories of consumers does not vary significantly.8 6 2. However.7 11 16 2 8 8 4. Views on Policies of Government . Sarngadharan 2009 242 widespread criticism about the provisions of the Act.36 8 0. Table 9. However.

COM – Electricity Industry in the Public Sector in India .IDEAINDIA.COM – Electricity Industry © M. Sarngadharan 2009 243 statistical test also confirms that similarity in the views of technical employees and experts is significant. (Table 9.32) IDEAINDIA.

frequent government intervention is quite natural.806 0.04 Not Not Not Sig Views of consumers and experts and employees when subjected to Z test indicate that the dissimilarity in the views is significant.5 39 34 35 37 19 19 17 27 20.COM – Electricity Industry in the Public Sector in India sig .08 2.Employees and Experts unfavourableHighly Highly favourable Unfavourable Favourable Category Normal Mean Total Not |t| 1. Letting the organisation to operate in a free commercial style would defeat the objectives of keeping it under the public sector.2 3. the government has to intervene to ensure the declared policies and aims of the balanced development of the electricity system to backward and rural areas. Sarngadharan 2009 244 Table 9. The decision on tariff shall be made on careful analysis of economic.6 Source : Field Survey 35 32 29 12 29 38.COM – Electricity Industry © M. Electricity should be made available even to the weaker sections. an industry like the Kerala State Electricity Board which is highly technical in nature shall have the freedom to base its decision on technical considerations.5 5 9 18 7.IDEAINDIA. The aims of profitability of the Electricity Board shall not be against the greater interests of the state.8 100 100 100 100 100 3.32 Views on policies of Government . Government Intervention The Kerala State Electricity Board being a public sector undertaking. it can be concluded that the new policy of the government is yet to bring in any conceivable impact on the functioning of the Kerala State Electricity Board. the control mechanism is essential.415 3.883 0. any industry should have commercial freedom for its successful operations.17 3. Thus.8 0 0 4 0 0. commercial and IDEAINDIA.13 3. On the other hand. To achieve these aims.845 Technical Employees 4 Administrative employees 5 Other Employees 7 Experts 8 Total 5. Moreover.65 3. The development would be helpful for the industrialization of the state and the overall economic development.

the effectiveness of administration and quality of the administrators. The employees of the trade unions under the political party of the government would try to evade the enforcement of the disciplinary system and this would seriously hamper the discipline in the organisation. Thus. industrial and business sense and thinks only in a bureaucratic style. enough to ensure the social responsibility of the government but not to hamper the commercial and financial interest of the organisation.COM – Electricity Industry © M. are also considered. Sarngadharan 2009 245 technical aspects. depending upon the government policies.IDEAINDIA. The government interference can either be advantageous or disadvantageous to the organisation. The majority of the consumers were of the opinion that the government intervention had an unfavourable influence on the functioning of the Kerala State Electricity Board. The balance between the social obligations and the commercial objectives is to be ensured through the correct amount of government control. Though the legal framework in the formation of the Board through the Indian Electricity Act 1948 does not envisage government interference in the day-to-day affairs of the organisation. now it has been made possible by the government through the inclusion of the government secretaries in the Board. they can defeat the very idea behind the change into the Kerala State Electricity Board from the department The government also interferes in the Board’s human resource functions like postings. and decisions on salary. like affordability of electricity. But the governments have to see that social considerations. The employees’ organisations and trade unions with political patronage invite excessive interference of the government. Hence. The question whether the present level of government control is optimum and advantageous to the organization was put forward to the respondents. Another limitation of government intervention is indiscipline among the employees.COM – Electricity Industry in the Public Sector in India . The government machinery lacks the commercial. the point is to have an optimum government control. IDEAINDIA. The power department and the financial department of the Government of Kerala have been given a considerable level of powers to interfere in the activities of the Electricity Board. The government machinery also exercises a certain level of control over the functioning of the Kerala State Electricity Board.

6 Source : Field Survey 8 9 8 10 8 16 17.266 1.055 1. The statistical test also confirms that similarity in the views of technical employees and other employees are significant.63 0. Sarngadharan 2009 246 Table 9.14 2.873 0.79 7 Technical Employees Administrative employees Other Employees Experts Total 4 4 8 0 4 8 10 11 5 8 13 37 32 35 26 48 33 35 40 41 29 16 12 20 21 0 0 2 0 0 10 0 10 0 10 0 10 0 10 0 2.856 Not Not Not Not Not Sig Not Not The employees and experts were also against the government interference.33. A good majority of them found it unfavourable.94 7 3.46 2.32 0 0.7 38 32 32 36 30 31.2 5 2.59 2.20 2.34) Table 9.55 2.60 2.9 20 31. Views on Government Interference .13 7 1.324 0.2 38. (Table 9.1 1 2.Employees and Experts unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total |t| 3.COM – Electricity Industry © M.44 3.8 0 10 30 31 32 34 34 32 28.451 0.34.Views on Government Interference .1 Others 0 Total 8.6 7 2.8 15 14 18 20 18 4 11 0 14 0 0 0 0 0 0 0 0 0 100 100 100 100 100 100 100 100 100 2.5 3 2.Consumers unfavourableHighly Highly favourable Unfavourable Favourable No response Category Normal Total Mean |t| sig Domestic 8 Commercial 8 Public lighting 10 Agriculture 4 Public Water Works 4 Industrial LT 18 Industrial HT 11.165 1.IDEAINDIA.3 3 Sig Not Sig Not IDEAINDIA.87 2.1 80 35.182 3.COM – Electricity Industry in the Public Sector in India sig .

material. Some of them found it favourable. when the world population has made explosive increases. There has been no development without intervening in the natural processes. Thus it can be concluded that the present level of government influence is not favourable to the organisation Activism of Environmentalists The growth of man from time immemorial was achieved through changing and managing his environment. This state of affairs has aroused a global awakening and awareness. The technological and scientific growth has also accelerated the process of damage to the natural environment. and has led to the birth of organisations of nature lovers and environmentalists. Utilisation of land.COM – Electricity Industry in the Public Sector in India . IDEAINDIA. They are so active that they have a strong say in the functioning / constructing of any system utilising natural resources.IDEAINDIA. In the earlier times. the damage was not serious because it was done on a small scale when compared to the whole system of nature around the world. The largest number of consumers viewed the activism of environmentalists in the state as detrimental to the operations of the Kerala State Electricity Board. But.COM – Electricity Industry © M. and energy would always affect their natural setting and distribution. the exploitation of nature has become very serious. Sarngadharan 2009 247 Source : Field Survey Views of consumers and experts and employees when subjected to Z test indicate that the similarity in the views is significant. The views of the respondents on the effect of activism of environmentalists were gathered.

5 39 34 25 35 43 30 27 27 34 14 17 19 22 17.56 2.753 1.70 2.Employees and Experts unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total Technical Employees 0 Administrative employees 5 Other Employees 7 Experts 12 Total 4.1 20 23.3 12 14 16 8 8 13.20 2.5 7 9 14 7.2 23 19 14 8 24 30 24 0 21 2.COM – Electricity Industry in the Public Sector in India sig sig .36 Views on Activism of Environmentalist .056 0.354 0.64 2.52 2.7 3 4 2 0 6 6.Consumers unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total |t| 0. Those who found it to be favourable were negligible in number.103 1. The statistical test reveals that.36).34 2. The second strongest opinion was that it was normal.38 3.65 Not Not Not Sig Not Sig Not Not A good majority of the employees and experts were of the opinion that the activism of the environmentalists was unfavourable to the functioning of the Kerala State Electricity Board.2 0 2 4 0 1.67 2.2 100 100 100 100 100 100 100 100 100 2.016 |t| 2. Table 9.2 100 100 100 100 100 2.498 0.751 2.935 2.52 2.4 0 9.48 Sig Not Not Not IDEAINDIA.7 36 34 40 30 22 20 40 31.35.8 Source : Field Survey 4.3 40 12 32.8 38.28 2.117 0.COM – Electricity Industry © M.8 20 21 24 20 28 28 31.08 2. the similarity in the views of various categories of employees and experts does not vary significantly (Table 9.2 11.431 1.81 3. Views on Activism of Environmentalist . Sarngadharan 2009 248 Table 9.424 0.IDEAINDIA.7 0 3.819 Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 10 9 10 14 10 6 4.

for every practical purpose. Transmission and distribution losses are dependent on the current through the conductors and the resistance offered by the conductor. Whether this money is to be spent or the losses are to be allowed is the question that can be answered only after the study of comparative costs.IDEAINDIA. in turn. A technology called super-conductivity has been developed. and effects of the losses. Hence. Thus. it is needed to accept that transmission and distribution losses are unavoidable at least at the present level of technology (Sreeramakumar. This also calls for increased investment. It was tried to collect the data through the questionnaire. which brings down resistance to a very small value. R. Most of the consumers who responded to the survey opined that the transmission and distribution losses had an unfavourable effect on the functioning of the Kerala power system. Electricity is taken from the source to the consumption point through conductors. Thus. Resistance of conductors cannot be eliminated or brought down beyond certain limits by any simple practical means. Transmission and Distribution Losses Losses are inherent in the transmission and distribution of electrical energy.COM – Electricity Industry in the Public Sector in India . The extent and effects of the losses can well be studied through electrical engineering theory. Sarngadharan 2009 249 Views of the two groups of respondents when subjected to Z test indicate that the similarity in the views is highly significant. varies inversely with the thickness of the conductor. Power is the product of current and voltage. IDEAINDIA. In order to increase voltage. the current can be traduced by increasing the voltage.2002). But it has to be looked at from different angles as the perceptions of the stakeholders provide the important data usable in planning and in the decision making. The findings of the study depict the fact that the activism of environmentalists is to be streamlined in such a way as to go for a compromise in the development measures of the Board. for transmitting the same power. But it can be brought into real practical use only at a very prohibitive cost. Lines are used to transmit power. a higher amount of money has to be spent for bigger insulators and for increasing the distance between the conductors. Another step that can be taken to reduce losses is to increase the thickness of the current-carrying conductor. Transmission and distribution losses occur due to resistance of these conductors. there would be an optimum value for current and voltage for each specific case or condition. The resistance.COM – Electricity Industry © M.

6 45 42 40 48 60 42 27 80 44 8 6 8 4 0 4 6.COM – Electricity Industry © M.92 4 0.3 5 1.774 0.261 0.475 Mean Total Domestic Commercial Public lighting Agriculture Public Water Works Industrial LT Industrial HT Others Total Source : Field Survey 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 11 10 12 8 14 20 0 11.65 Not Not Not Not Not Not Sig Not Almost all the employees and experts emphasized the unfavourable effects of transmission and distribution losses in the functioning of the Kerala State Electricity Board.2 100 100 100 100 100 1.3 9 IDEAINDIA.IDEAINDIA.619 1.48 1.271 1.7 41 42 36 32 40 46.67 1. Table 9.615 0.Views on Transmission and distribution losses .37 Views on Transmission and distribution losses .67 1.4 5 1.4 3 1. Sarngadharan 2009 250 Table 9.8 57 66 61 71 62.96 5 1. The statistical test also reveals that the similarity in the views of various categories of employees and experts does not vary significantly.6 43 30 27 26 33.Consumers unfavourableHighly Highly favourable Unfavourable No response Favourable Category Normal Mean Total |t| 0.93 1.219 0.38.7 20 38.8 100 100 100 100 100 100 100 100 100 1.7 0 5.87 6 0.4 36.3 2 1.COM – Electricity Industry in the Public Sector in India .63 1.4 0 2 4 0 1.Employees and Experts favourableHighly Unfavourable Highly unfavourable No response Favourable Category Normal |t| 0.71 1.572 2. Those who thought otherwise were a negligible number.62 1.38 4 sig Not Not Not Not sig Technical Employees Administrative employees Other Employees Experts Total Source : Field Survey 0 0 0 0 0 0 0 0 0 0 0 2 8 3 2.20 1.

This is a clear indication that there arises urgent need for scientifically prevent the transmission and distribution losses. but the consumers felt it to be bad.IDEAINDIA. Though trade unionism was found to be present in a healthy way. The activism of environmentalists was considered to be detrimental to the interests of the Kerala State Electricity Board. was deemed low. But the new policies of the government were considered normal by the employees and experts. experts and employees when subjected to Z test indicate that the similarity in the views is significant. The foregoing analysis leads to conclude that the respondents recorded a studied opinion on the level of tariff of different categories of consumers. All other categories of consumers were charged by the Kerala State Electricity Board at a normal level. The contract employees were not found to serve the organisation well. was not so in the eyes of others. though felt to be good by themselves. They were unanimous that the commercial consumers were taxed with a high tariff. the consumers were not convinced of it. and the transmission and distribution losses are on the higher side of the KSEB IDEAINDIA. the ill effects of transmission and distribution losses in the functioning of the Kerala State Electricity Board can be confirmed. Frequent transfer of employees was considered bad to the organisation by all.COM – Electricity Industry in the Public Sector in India . Thus. The attitude of the employees. The analysis of the tariff and distribution losses also leads to the conclusion that the low tariffs levied by the Kerala State Electricity Board stands in way of enhancing revenue resources.COM – Electricity Industry © M. Sarngadharan 2009 251 Views of the consumers. on the other hand. Transmission and distribution loss was identified as another problem in the functioning of the Kerala State Electricity Board. The government intervention. The tariff for railway traction. the privatisation policies and subsidies in tariff were considered unfavourable to the organisation.

by conversion of Government debt into equity. extent of professionalism in top management. The financial managers of the Board. measures for motivating the employees. The current ratios support also this claim. Evidently. claimed that the Board was prompt in debt servicing and this has paved way for creating a healthy creditworthiness. Capital Structure and Profitability of KSEB Experts in the Kerala State Electricity Board opined that during the recent years a good portion of the new borrowings could not be invested in assets because of revenue deficit.COM – Electricity Industry in the Public Sector in India . Debt equity ratio made a sudden change in 1998 and subsequently in 2006. billing and accounting practices. tariff structure and the losses in lines are seen to have serious influence in the performance of the organisation. The proportion of debt could not be reduced because of the same reason as above. The experts observed that main reason for the financial problems was the higher incidence of interest payable remained till recently. Level of government control. it is not a healthy trend. Again. different types of employees and experts in the generation and distribution of electricity together with secondary data collected from Kerala State Electricity Board and other sources. Now the top management is seriously trying to adapt the refinancing options. Certain parameters like debt equity ratio are seen to have important effect on the financial performance of the firm. The analysis also confirms this. Better quick ratio after the debtequity conversion exercise also was found to be in line with this observation. while holding discussions. The analysis agrees with this.COM – Electricity Industry © M. Various attributes were examined in addition to twenty financial parameters for the study. commercial sense of operation. financial viability of distribution sections. The efforts have started to gain favourable results as was observed in the interest coverage ratio.IDEAINDIA. Sarngadharan 2009 252 Chapter 10 SUMMARY OF FINDINGS AND SUGGESTIONS The present chapter is an attempt to summarise the major findings of the study carried out with the help of primary data collected from the various categories of consumers. IDEAINDIA. as per the financial experts’ opinion. It is also attempted to put forward a few suggestions based on the conclusions drawn.

the higher incidence of defaulters of Government-owned firms and organisation makes the position far from satisfactory. ensuring better productivity. The Government has agreed to make good any shortage of profit from the stipulated per cent.COM – Electricity Industry in the Public Sector in India . The return on capital employed ratio deserves analysis and interpretation from this perspective.COM – Electricity Industry © M. The profitability of the Board is a matter of controversy. But. it remains a fact that this position is achieved with the receivables from the State Government. It is worth mentioning that the collection efficiency has improved much during the recent years as depicted by the respective ratios. help them to be prompt in making payments on time. The debtors’ turnover ratio would have been much better if this issue is resolved. the Board has been generating surplus. This has created difficulties of varied nature. virtually lower turnover ratios viewed in the process of computation can not be cited need not be cited as serious drawback. the efforts of top management have brought about considerable reduction towards labour and other expense. Thus. Thus. whether the figures revealed by the books of accounts is real profit or not is a matter that requires probe from a different perspective. As per records. The data analysed in the raw materials to revenue ratio and wages to revenue ratio support this finding. Sarngadharan 2009 253 the managers claimed better cash position in the recent years.IDEAINDIA. The contention of the managers that there are recent efforts to control inventory corroborates with the figures of the inventory turnover ratio. The top managers opined that the tariff was determined in the recent years more with a social commitment than with the intention to maintain return on assets. IDEAINDIA. The tariff cannot be increased in line with the general price line increases or in line with the inflation. But. However. The mangers in the top level and middle level indicated huge escalation in the cost of materials including fuel coupled with the inability to increase the tariff for social reasons. The analysis of the mobilization and utilisation of funds with the help of secondary data leads to the conclusion that the Board is backed by sufficient funds in the form of equity capital as well as long term borrowings.

This prevents giving due to factors like technical expertise. administrative experience. Managing a complex organisation like KSEB requires a good amount of professionalism in leadership. execution. transparency in decisions is to be well projected as an added advantage of public sector organizations. KSEB is found to have fairly good continuity in decisions. Sarngadharan 2009 254 Organisational Pattern of KSEB The size of the organisation was found to be high with regard to manageability. For any industry to survive. The leadership of the organisation was found to be sufficiently professional to meet the needs. The management of such an organisation should have sufficient stability to have a long-term planning and continuity in functioning. Strong extraneous considerations were found to exist in induction of management in Kerala State Electricity Board. This would seriously hamper the efficiency and effectiveness of the management. However. But unfortunately the management decisions of KSEB were found to be lacking enough transparency to satisfy its stakeholders. in selecting the members of the Board of Directors. in spite of swift changes in management and environmental factors.COM – Electricity Industry in the Public Sector in India .IDEAINDIA. It is not merely necessary that there should be transparency in all the aspects but it should be made felt to all the categories of stakeholders. A higher level of government control would be harmful to the organisation because of the lack of commercial freedom. The organisation has a number of functional heads located at various centers. But frequency of change in management in KSEB is found to be too high for effective functioning. monitoring and corrective measures. it should have a IDEAINDIA. These procedures necessitate continuity. Here the study has revealed that the locations have been decided without any scientific basis. it was concluded to be on the higher side. regional or communal basis. In this age of globalisation and privatization trends. All the stakeholders had the same opinion about it. The decision on the location can be either on a scientific basis or may be based on other considerations like political. A decision makes any sense when it is fruitfully implemented through careful planning. With regard to question on the level of government control. expertise in functions like finance.COM – Electricity Industry © M. the government has succeeded in effecting a satisfactory composition for the Board of Directors.

Though accepting technological advancements from abroad is unavoidable in the present scenario. Serious efforts to bring in modern technology are also found lacking. Old and outdated technology cannot keep the industry sustainable in the modern competitive environment Both generation and transmission capacities were found to be inadequate to meet the demands. The performance of the Public Relation Mechanism of the organisation is found to be poor. For an essential item with ample demand this is a serous handicap and a major IDEAINDIA. the level of dependence of KSEB on foreign technology is fairly high. Strategies and methods to overcome the inherent weakness of the public sector units in ensuring quality are seen lacking. As feared KSEB’s functioning does not exhibit commercial sense. Fuels used are also outdated. This puts KSEB in hot water in the context of vigorous media exercises of the advocates of privatisation moves. The organisation is maintaining good degree of functional specialisation. This would not only hamper the indigenous technological developments but also leads to a technological slavery in which the multi nationals would dictate terms. This would cause hitches in providing a service matching the global standards. both the foreign suppliers as well as indigenous suppliers don’t reach the expected level. The staff structure is to be prepared. Sarngadharan 2009 255 commercial sense in its operation unless it is financially supported from external sources.COM – Electricity Industry © M.IDEAINDIA. this kind of an exercise may not be easy unless the management has very strong determination to overcome the inherent resistance to changes. Shortage of essential staff in important areas is another problem affecting the performance of the organisation. Inducting or maintaining commercial sense operation in public sector undertakings is not an easy task. With the presence of strong trade unions with political supports. The staff pattern is not based on any scientific principles. Being an industrial establishment shortage of staff in key areas would affect its profitability also. With regard to the quality of materials procured.COM – Electricity Industry in the Public Sector in India . Here also KSEB presents a negative picture. necessitating urgent steps for renovation and modernization to cope with the increasing demands of the modern world. based on a scientific work study and work design. The presence of outdated machines is of a high order. This is strong side in its functioning helping it to follow the rapid advancements in technology.

COM – Electricity Industry in the Public Sector in India . But the practices in KSEB for revenue collection are assessed to be poor.IDEAINDIA. For the billing also though a more or less sound system is there. The facilities for training in behavioural practices are also found inadequate. This also would dampen the capability of the firm to cater the requirement of this most needed commodity of the modern world. Revenue collection procedures are found satisfactory. arguments in favour of privatisation are strongly in the air. The accounting practices in the Kerala State Electricity Board are evaluated to be sound. Performance inn the Management of Revenue A commercial organisation cannot survive without sound and effective practices for collection of the revenue. At this juncture. Sarngadharan 2009 256 failure on the part of KSEB being a monopolistic supplier in the public sector. The existence of serious shortfalls in the maintenance of the transmission system of the K S E B can also be diagnosed from this study. But Attitude of the staff towards public was found to be poor. when. This would also affect the firms ability for satisfactory service to the consumers and thereby its goodwill. Good training facilities are of extreme important for a highly technical organisation like KSEB. But the facilities are found insufficient. The attitude of best of the employees can be dampened by this poor environment in the firm. it lacks sufficient consumer friendliness. Public opinion will be a decisive factor in the future of the Kerala State Electricity Board. Going deeper into the drawbacks of the transmission system of the state failure in properly locating the substations and overloading of transmission lines are other serious pitfalls. These also add to the weakness of this basic industry to cater the needs of the industrial growth of the state. The present system for attending consumer complaints is found not to satisfy the consumers. IDEAINDIA. The organisational environment in KSEB is fond not prompt good performance by the employees. The practices have miserably failed to gain the appreciation of the consumers. Technical training is grossly inadequate. it also does not have the required consumer friendliness. However. Proper accounting policies and practices are one of the major prerequisites of successful financial management. Billing or invoicing the purchasers being one of the important operations of the sales process any flaw in this seriously affects successful revenue management.COM – Electricity Industry © M. this aspect become more important. The attitudes of the staff towards the public have an important role in moulding the public opinion.

Sarngadharan 2009 257 The case is similar for the organisational culture also.IDEAINDIA. the end users (the customers) are not getting its benefit and they are not satisfied. The distribution lines and transformers are found heavily overloaded. Motivation to sincere personnel is insufficient in the Kerala State Electricity Board. The study reveals that though. Inadequacy of clarity regarding duties and functions is yet another problem area identified. Inefficient outing of distribution lines heavily affects the reliability and quality of electric supply to the consumers. Problems both in environment and organisational culture would do serous harm to the successful functioning of this public utility. But unfortunately enough.COM – Electricity Industry © M. In the technical aspects of the supply system are also diagnosed to have problems. Enquiry into other service conditions of the employees also brought out important findings. This would leave gaps in enforcing rules and can affect even the safety aspects. The employees have not been provided with adequate protection for enforcing rules. The service conditions at difficult places are not at all satisfactory. The study revealed the existence of working hours without adequate monitory compensation. The study revealed the poor financial viability of these basic units. This is serous drawback which would affect both the quality of service as well as profitability. Study into the dedication of workers of KSEB revealed interesting results. But the divergence in opinions prompts the researcher to keep away from making a conclusive opinion on it and to leave it open for further scientific study. it has failed to get the appreciation of the consumers and others. They succeeded in their effort to an extent. It is also not conducive to satisfactory functioning of the organisation. Electrical sections are the basic commercial units of KSEB. There is gross IDEAINDIA. The workers have the desire to be dedicated. The absence of proper motivation is a fatal defect of any organisation and more serious to public sector organizations. Overloading of distribution lines and transformers has very serious effects on the reliability of the system. system for this is technically sound. The study revealed KSEB’s failure to strengthen its distribution network to keep it in pace with the above growth.COM – Electricity Industry in the Public Sector in India . Demand for electricity is increasing day by day not only by inclusion of more consumers to the system but also due to increased demand by the existing consumers. The absence of proper systems to monitor financial performance of the sections keeps this aspect not known to the management. these lines utilise large extent of land resources. Proper tools for working in this fairly hazardous industry have not been made available to the employees.

The commercial consumers were taxed with a high tariff. The recent trends are that the trade unions seem to recognize the realities and take a more responsible stand. Frequent transfer of employees has an unfavourable effect to the functioning of KSEB The present attitude of employees is diagnosed to be unfavourable to the organisation . However. in addition to causing difficulties to the staff would eat heavily into the quality of service and reliability of electric supply by the board. KSEB is providing power at subsidised tariff to different categories of consumers namely domestic and agricultural consumers. they have not made any conceivable impact on the functioning of the Kerala State Electricity Board. All other categories of consumers were charged by the Kerala State Electricity Board at a normal level. Sarngadharan 2009 258 inadequacy in transportation and communication facilities. is d low. Tariff and Distribution Losses Tariff structure is the most important aspect affecting financial viability of the organisation. However. This shows the acceptability and justification for a higher tariff so that KSEB can operate in more commercially comfortable region facilitating the much needed expansion.COM – Electricity Industry in the Public Sector in India . But the change is not sufficiently convincing to other stakeholders. The present tariff of KSEB for various categories of consumers is in the normal level except for two categories. The tariff for railway traction. Their effects. However.COM – Electricity Industry © M. Privatisation policies are acquiring momentum in the national level. The subsidies are affecting the revenue income of the firm and are thus unfavourable to it. But the study suggest that it will not do any good to the Kerala State Electricity Board The union government and the state government have declared their policies in power sector. the activism of environmentalists was not helpful to the power sector in Kerala. a close look at the latest national market for power reveals that the rates in Kerala are much low. On the other hand undue government interference is not favourable to the successful functioning of the Board. KSEB as an industry cannot afford such social obligations without sufficient financial support from the government. on the other hand. Kerala is rich with social movements and activists. In spite of financial saving it give to the organisation the presence of contract employees is not favourable to the organisation.IDEAINDIA. Environmental movements are also live in the state. IDEAINDIA.

This hints to further strengthening of the management through updating the professional knowledge of those in the helm of affairs. Inducting commercial sense As KSEB is now functioning without budgetary support from government. Ample training facilities available globally in the power sector.Decide and announce clear demarcation of the organisation into commercially independent units. it has to sustain in its own revenue. and dynamic pricing are among the hot areas in this field. If a power company fails to keep their management people abreast of the newer developments and equip them with modern skills the company will lag behind others. This calls for an operation strictly in commercial line. . IDEAINDIA. Thus.COM – Electricity Industry © M. it is high time that KSEB shall take positive step to inculcate commercial sense to all levels of the organisation.COM – Electricity Industry in the Public Sector in India . The study has revealed that lack of commercial line of operation has hindered the financial performance of KSEB. Areas like demand side management. through at a bit higher cost. The following steps are suggested in this regard. Sarngadharan 2009 259 Higher level of transmission and distribution losses also have its own ill effects. SUGGESTIONS Based on the findings of the study has been attempted to put forward some suggestions with a view to improving this organisation in discharging its social obligations in a more effective manner. the demand it places on the top management would be rather heavy. It affects both the economy of the firm and quality of electricity given to the consumers. risk handling. has to be fully utilised by the State Electricity Board. oil price. Strengthening professionalism in management Professionalism in leaderships has helped KSEB much in the current competitive environment.IDEAINDIA. Since power sector has become an attractive field for multinationals huge amounts are being spent to develop tools to assist the management. The concept of profit centres announced by KSEB years back is not seen implemented seriously. Because of swift development and severe competition in the power field. KSEB shall ear mark more resources in its budget for equipping its management with latest professional skills.

System to prevent mistakes in collection which can cause harassment consumers through unwanted disconnection has to be introduced. KSEB has to conduct a detailed study to evolve a more consumer friendly billing collection and accounting system. Improve their capability for arguing successfully before State Electricity Regulatory Commission in tariff petitions. token system. E-payment.COM – Electricity Industry in the Public Sector in India . drinking water etc may be considered. IDEAINDIA. . . The billing and collection process may be completely computerised and networked so that a consumer can remit the amount in any of the offices. The finding of the study that the billing and accounting practices of KSEB do not satisfy the consumers is a serious flaw in the revenue management.IDEAINDIA. standing instructions. and running account scheme may be considered for implementation.COM – Electricity Industry © M. . intimation and collection of the dues from the consumers and properly monitoring the functions. Outsourcing part or whole of the cash collection can be considered if it will ease the difficulties to the consumers.Plug revenue leakage by improving inventory management. credit and refinancing management etc. it should act as a window through which consumers can interact with the establishment. cash flow management.Identify and designate unit managers and make them accountable for the commercial viability of their units.Clearly identify and define quantitative goals in commercial operation for the organisation as whole and to each levels and units. Sarngadharan 2009 260 . Secondly.Strengthen the pricing unit with professional skills and modern tools. Make billing and collection practices consumer friendly Billing and accounting practices of a commercial establishment should have two basic qualities. Other amenities like sitting queue. rain shelters. More collection counters at more centres may be provided. First it should be capable of ensuring prompt assessment. Bills may be made simpler and understandable by the ordinary consumer. A consumer-friendly billing and collection mechanism is one of the pre-requisite of a business establishment for minimizing the default from the consumers.

A thorough work study and a technical evaluation have to be conducted to pin point the weaknesses. This has to be necessarily corrected. Over activism of auditors and vigilance people prompt people to play safe. Monetary incentives are not likely to create good results in KSEB.IDEAINDIA.COM – Electricity Industry in the Public Sector in India . It should be recognised that giving subsidised tariff at the cost of the firm’s financial stability shall not be helpful to the consumers in the long run. A system for recognising loyalty and sincerity has to be introduced. Sales and revenue collection are effected in these units. The study revealed that the financial viability of the sections is poor. KSEB being the lone operator in power sector catering the whole state has the duty of expanding its serving capacity to cater the needs of the society. It shall generate sufficient funds for the expansion. Positive efforts in commercial lines shall be encouraged. Sarngadharan 2009 261 Financial viability of distribution sections Distribution sections are the basic units of business in KSEB. The power losses in the distribution system. Allowing more freedom of operation and encouraging employees to take business risks may be helpful. There shall be systems to study productivity of all levels and units. poor productivity of the staff. Over dependence on IDEAINDIA. Effects of influence by over politicized trade unions shall not affect activities for the organisation by motivated people. A system to accurately measure the input energy and the sales should be put into operation. Rationalising tariff Decision on tariff has to be more realistic. Creating favourable working environment and organisational culture are important in motivation. etc can be among the reasons. There is no system to appreciate well motivated activities. Improvements in productivity shall be identified and rewarded. Certain operations can be carried out more economically through outsourcing and for this purpose it is suggested to go for detailed feasibility study Motivation to employees The study revealed that measures for motivating the employees in the revenue management of KSEB are far from satisfactory. The solution to this problem is not simple. unscientific staff pattern.COM – Electricity Industry © M. Failures while dealing with business risks shall be accepted considering the good faith in the actions. Scientific pricing methods have to be adopted. poor billing and collection.

An important item indicated above is good maintenance of lines. The first two steps require heavy investment. Such activities have actually made domestic consumption to increase to very high proportion in the state. It is technical fact that losses cannot be avoided completely. Thicker line conductors.COM – Electricity Industry © M. Any how now the thrust of the future plans shall be to reduce losses. It is suggested that the board should make a very detailed study into the aspect and consider strengthening the maintenance sections. But KSEB has miserably failed to appreciate the commission about higher rational tariff to help expansion programmes. It is formed with an aim of deciding tariff without influence of the government. It is due to the resistance offered by the lines and equipments. This aspect looks neglected by KSEB. It is suggested to induce more professionalism to the section of officers dealing tariff regulatory affairs. Power theft. etc contributes to non technical losses. This calls for urgent and strenuous efforts to reduce the line losses. Reducing transmission and distribution losses Electric lines cause power loss inherently. the study indicated that the transmission and distribution losses are on the higher side. etc reduce losses. Sarngadharan 2009 262 borrowed capital will increase the cost of production will either increase the future tariff or cause financial breakdown of the firm. An independent department under a Chief Engineer with multi disciplinary professional support may be formed for looking after the tariff activities. good maintenance. failures in billing and collection. The non technical losses are also to be plugged. Thus a cost effectiveness study would be necessary to make decision on each individual works. try to develop tamper-proof meters.COM – Electricity Industry in the Public Sector in India . Line losses are reduced mainly by strengthening the transmission and distribution lines. Now tariff is decided by the State Electricity Regulatory Commission. smaller line length. However.IDEAINDIA. The management has made heavy reduction in the staff strength of maintenance sections for short term saving of money. A deeper look into the reasons revealed another aspect. Cross subsidy to unproductive sectors like the domestic consumption at the cost of industrial sector is not a healthy decision to help the society. and thoroughly revamp the billings and collection system. IDEAINDIA. But it can be reduced. The board has to strengthen the anti theft wings. But this has caused heavy deterioration of the condition of the transmission and distribution system.

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