http://www.financialexpress.com/article ... ank/33364/
Prime minister Narendra Modi possibly is the first politician in independent India to promise ‘dynamic competition’ as a populist pre-poll sop. During his Ram Leela Maidan speech, campaigning for the upcoming Delhi assembly elections, Modi assured the voters of Delhi that his government is planning to implement an ‘open-access’ electricity regime for the city, where residents, much like choosing their mobile phone operators, will be able to choose their electricity supplier based upon better service and cheaper price.
Modi chose to use the example of India’s telecommunications industry, an industry best known as the poster-boy of dynamic competition, to drive home the idea that just as a competitive surge among India’s telecom service providers has resulted in high tele-density in India’s urban and rural areas with a dramatic reduction of prices of mobile handsets and service charges, similar consumer benefits were in store for Delhi’s electricity users.
It is ironic that Modi has to make a campaign pledge for implementing a regulatory measure which has been a part of India’s electricity laws for the last 12 years. The implementation of this reform (liberalising the Indian electricity market) has been progressively sabotaged by the rampant use of the Indian electricity sector as a tool of public appeasement. Political intervention in both the functioning of the country’s electricity regulators and in setting of electricity pricing structures, have hindered the introduction of retail competition in the sector—ensuring India’s electricity users have limited and inefficient service options. Consequently, India currently ranks 111 out of 189 nations in challenges faced by new businesses to get a permanent electricity connection and residents of even the country’s capital city of Delhi (as per a CEA estimate) suffer from approximately 5 hours of daily power-cuts every summer.
Modi’s comment—that a Delhite would first need access to electricity before she can appreciate lower electricity tariffs—seems an appropriate jibe targeted at the political ideology of the Aam Admi Party leader, Arvind Kejriwal, Narendra Modi’s chief political rival for Delhi assembly elections.
Kejriwal prefers a populist anti-reform plan, where his campaign pledges to lower electricity tariffs, threatening to cancel licences of electricity distributors and audit their finances. His grandiose parens patriae political agenda seems ill-informed of the fact that in the last 10 years, power tariffs have increased by 65% while cost of generating power went up by a whopping 300%.
In such a political milieu, Modi’s attempt to intellectually and politically defeat populist anti-reformers is quite welcome. By linking the benefits of competitive electricity markets to cheaper electricity tariffs, Modi has co-opted one of Kejriwal’s major campaign promises. If both Kejriwal and Modi promise lower electricity tariffs, it might make sense for Delhi’s voters to choose the latter, whose accompanying pitch to make India’s electricity sector more competitive will also ensure uninterrupted 24 hours of power supply for the residents of Delhi.
By making it easier for the common voter in Delhi to understand how her life improves when India’s markets become more competitive, the prime minister may have started the process of creating an electoral constituency around the idea of competitive market reforms.
Inspite of the fact that studies by the World Bank, the OECD and the Competition Commission of India have shown that competitive markets have a direct impact on poverty reduction, with the greatest benefits of such markets accruing to the least well-off sections of the society, there is no vote-bank yet for pro-competitive policy reforms, especially among the non-urban electorate.
Modi’s attempt to philosophically root the benefits of pro-market, competitive reforms in the improvement of the lives of the aam aadmi—through a high-decibel electoral strategy—will help him evolve a broad basis for his style of development-oriented politics. If he can make another bout of Congress-style welfare-state socialism electorally unappealing, Modi could finally tilt the fulcrum of Indian electoral politics towards a neo-liberal common sense—something which is not likely to be reversed by future rotations of the electoral wheel of fortune.
If Modi achieves the same electoral success sloganeering for competitive markets as Indira Gandhi did with ‘garibi hatao’, his political detractors will have to think more imaginatively than cutting electric wires to remain politically relevant.
Good grief. They could fund multiple metro systems with that, or for direct perspective, the healthcare budget itself is $5 billion. See 
