Electricity lessons from Gujarat

Early this month, the Gujarat electricity regulator rolled out a tariff regime for the current fiscal year. On the face of it, this reflects poorly on the principle of aligning tariff with costs. The tariff increase closes only 20% of the revenue gap. Against a shortfall of Rs. 1,500 crore that requires an average raise of 30 paise per unit across all consumers, the increase is a modest 10 paise per unit for most consumers barring those in the below poverty line segment.

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