Policy Environment and Regulatory Reforms for Private and Foreign Investment in Developing Countries: A Case of the Indian Power Sector

Abstract

Electricity, one of the key infrastructure sectors, plays a very important role in socio-economic development of a country. Developing countries with significant gap in the provision of electricity have attempted to provide a conducive environment for investment in the power sector. Initiatives towards the same are evident in terms of opening up the sector for private and foreign investment, setting up of independent regulatory institutions and bringing regulatory and policy changes to enhance competition in the sector. However, scope, pace and sequence of such reforms varies across countries. This book provides a detailed overview of the reform process in the electricity sector in India since the early 1990s, highlighting the key policy changes that have led to opening up the sector for investment and competition in generation, transmission and the distribution segments. This book also provides an insight into in the reform process, through a comparative assessment, adopted in key developing economies including Argentina, Brazil, China (PRC), India, Mexico and Thailand. While the book does not attempt a comprehensive analysis of the way process of power reform has influenced private investment in the power sector in developing countries. This book would be useful for research scholars, advanced graduate students in economics, multi-lateral institutions, policy makers and regulators in India as well as other developing countries, who are embarking on a path to reform the power sector. The inferences derived from the research results presented here should help policy makers, development intuitions as well as regulatory institutions in choosing an appropriate path to reform as per the country specific conditions and help attract greater private investment in the sector.