Reforms in the Energy Sector
Reforms in the energy sector were initiated to supplement the Government's efforts in the development of the sector and to make it more efficient. The Government has been endeavouring to provide a policy environment that encourages free and fair competition in each element of the energy value chain and attracts capital from all sources-public and private, domestic and foreign. Encouraging such capital formation is crucial for India to meet its energy needs. Significant progress has been made in establishing independent and transport regulatory authorities in the power sector to facilitate the rationalization of electricity tariff as well as to encourage competition while protecting the interests of all stakeholders. The Government also proposes to set up regulatory authorities for the coal and petroleum sector.
The thrust of the reforms has been to deregulate the prices of commercial energy resources (which, until recently, were entirely administered), increase competition through institutional, legislative and regulatory reforms and reduce subsidies.