Ease of Doing Business with Reliable Electricity

November 06 2018

Sterlite Power

India is powering ahead and is now one of the top ranked economies in South Asia, as per a latest report released by the World Bank. Last week, the World Bank marked up India’s ranking in its ‘Ease of Doing Business’ score (EODB) for 2018-2019, at 77, rapidly moving up from its place in 2015 at 132.

According to the report, a key parameter that has helped India move up the charts, is that of ‘Getting Electricity’. India now ranks in the top 25 in the world on this critical parameter. This parameter measures the procedures, time and cost required for a business to obtain a permanent electricity connection. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity are also key factors.

The significant improvement in the efficiency and reliability of power is indicated by the sharp reduction in peak power deficit in India, which came down to 0.6% in 2018, as against 13% in 2010. This bridging of the power deficit has undoubtedly played a significant role in helping businesses across the country function more efficiently. A country’s economy is largely dependent on its manufacturing capacity, which in turn requires abundant and reliable electricity supply.  Lack of efficient, reliable and easy access to electricity will hit businesses and negatively impact the economy. However, going by the latest statistics, India is on the right track and has done well in this regard over the last few years.

*Source: World Bank, 2018

Electricity boosts the ‘Ease of Doing Business’

‘Getting Electricity’ is one of the ten parameters on which World Bank decides an economy’s EODB rank. On this parameter, India leapfrogged from 99th place in 2015 to 29th place in the 2018, a leap which hugely improved its overall EODB ranking.

The rankings took the city of Delhi as the sample base to validate the effectiveness and efficiency of the key parameters. In Delhi, administrative and regulatory reforms brought down the number of procedures to three and time taken to get a new connection to 31 days. But major concerns remained on the cost and reliability front. To some extent, procedural changes helped reduce the cost of getting a new connection. However, a steeper cost reduction could only come about once the electricity supply became more efficient and thus, reliable.

Efficiency and reliability could only come about once the old and ageing infrastructure was replaced or upgraded to some of the latest equipment that could reduce power congestion and loss of energy, increase stability of the power supply and thus, make it reliable.

How Delhi got reliable electricity supply

The problem with Delhi’s electricity was the ageing infrastructure, power congestion. Once these problems were realised, there was action to improve upon them by upgrading the infrastructure. Major upgradation of infrastructure from the previously old and ageing setup was done by increasing capacity of transformers and installation of newer cables to enhance the quality and stability of power supply.

For example, recent upgradation of BSES Rajdhani’s two substations - Andheria Bagh & Vasant Kunj B Block – increased the load capacity of the substations along with negligible energy losses. Similarly, Delhi Metro Rail Corporation (DMRC) connected its INA substation with Dhaula Kuan substation to ensure continuous supply, negligible maintenance and extremely low energy losses. Such improvements on the efficiency of the electric supply increased its reliability. The duration and frequency of outages per customer per year for Delhi reduced by 20%.

Infrastructural upgradation also resulted in better data collection. This resulted in higher ranking on other parameters that check the quality of the supply, mechanism for monitoring outages, mechanisms for restoring services, regulatory monitoring, financial deterrents aimed at limiting outages, and communication of tariffs and tariff changes.

Conclusion

We have seen what reliable power did to Delhi and the overall improved India’s EODB ranking. However, outages still plague many parts of the country. Access to reliable power should be made a fundamental right to ensure every city and town contributes to India’s journey up the global rankings. 

Author:

Manish Agarwal – CEO Solutions, Sterlite Power 

Disclaimer: The views and opinions expressed in this article are those of the author(s/) and do not necessarily reflect the official policy or position of Sterlite Power.