Elite Capture : Residential Tariff Subsidies in India

Mayer, Kristy ; Banerjee, Sudeshna Ghosh ; Trimble, Chris

Washington, DC:World Bank

关键词: electricity act;    energy access;    poverty line;    power;    power sector reform;   

DOI  :  10.1596/978-1-4648-0412-0
RP-ID  :  92648

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

India - home to one of the world'slargest populations without electricity access - has set theambitious goal of achieving universal electrification by2017.311 million people, a quarter of its population,remains without power, despite substantial efforts toincreased affordable access for the poor.This studyfocuses on India's residential electricity subsidies,as viewed through a poverty lens.Addressing these issuesis especially urgent since the residential electricitysector accounts for nearly a quarter of India's totalelectricity consumption.Comparison of two survey rounds(2004/05 and 2009/10) was used to assess changes inelectricity consumption over time.The study approachanalyzed subsidy distribution by both below poverty line(BPL) and above poverty line (APL) grouping, as well asincome quintile, to allow for the wide variation in povertyrates states.The key findings in this study are that 87percent of subsidy payments go to APL households instead ofto the poor, and over half of subsidy payments are directedto the richest two-fifths of households.Furthermore, theseestimates are conservative because they assume that BPL andAPL households are accurately identified.Because APLhouseholds tend to consume more electricity, subsidies areskewed toward the upper quintiles.The major driver ofthese outcomes is tariff design.Few states have highlyconcessional BPL tariffs; in most, all households areeligible for a subsidy on at least a portion of theirmonthly electricity consumption.Combined with the factthat the poorest households consume relatively small amountsof electricity means that wealthier consumers withelectricity access are typically eligible for just as much,if not more, subsidy as poorer ones.India's stateshave a variety of available options for improving theirsubsidy performance.Certain states model good practicesthat other states could consider adopting, for example,Punjab, Sikkim, Chattisgarh, and others.States mayconsider four model tariff structures that meet the twin,medium-term policy goals of high subsidy targeting and lowcost.These are (i) creating BPL tariff schedules andeliminating subsidies from other schedules, (ii) deliveringsubsidies through cash transfers instead of tariffs, (iii)creating a volume differentiated tariff (VDT), and (iv)creating a lifeline tariff and removing subsidies from other tariffs.