Regulatory Impact Assessment in Indian Electricity Generation Sector (RIA)

About the Project

Energy sector is considered as the backbone of any economy. Without adequate energy sources, industries and households cannot develop at a consistent rate thereby affecting the overall economy of the country. While it is a fact that India suffers a huge power deficit, it is also understood that the country has huge potential in the sector. It is an irony that India despite its vast deposits of coal, abundance of resources is not able to generate sufficient energy to meet its demand. The issue can be traced in the fact that the sector attracts very low investment especially and having high regulatory costs could be attributed as one of the key reasons.

Thus the need of the hour is to identify reasons for the high regulatory costs and one of the ways is to undertake a cost benefit analysis of the existing regulation, which can be undertaken with the help of Regulatory Impact Assessment (RIA) tool.

RIA primarily aims to draw a cost – benefit analysis of regulations to assess the ease of doing business in a particular economic sector. This aids businesses, regulators and citizens at large to assess and understand the implications (cost versus benefit) of a specific regulation. RIA is popular in OECD Countries, however, India is yet to initiate the mechanism to assess its regulations that hamper development of various sectors.

CUTS with support of Asian Development Bank, Indian Resident Mission has taken up the initiative of assessing and scrutinising specific regulations (primary laws) that affect the genesis of business of generation of electricity in viz., thermal, hydro and solar sub-sectors. Thus, on the basis of evidence provide solutions that would aid in reducing costs and increase the ease of doing business.