36
2 Energy Sector Progression in India
Indians got conversant with the term energy after the enactment of electricity law
that was primarily enacted for use and supply of electrical energy. Section 2 of the
India Electricity Act 1910 defined energy as ‘electrical energy’ that was.
I. Generated, transmitted, or supplied for any purpose, or
II. Used for any purpose except the transmission of a message.
Until recently, the Indian Electricity Act (1910), the Electricity Supply Act (1948),
and the Electricity Regulatory Commissions Act (1998) were the main regulations
for the energy sector. Since commercial energy was a precious resource, these laws
prima facie dealt with the transmission, consumption, use and control of electricity
through licensing mechanism and not with the generation of electric power per se.
There were severe penal actions for theft of electricity. In 2003, all previous laws were
consolidated and a new Electricity Act (2003) was brought into force (Bhattacharyya
2005). Apart from the national level acts, each state is governed by its individual
legislations.
For almost four decades after independence, energy sector continued to be dominated by public sector, and private sector had limited role. It was in 1991 that the
policy on private participation in the power sector was adopted to encourage private
sector participation.
At the time of independence (India was an underdeveloped economy then), around
68% of the population was engaged in agriculture, around 14% in industry (large
and small scale), 8% in trade and transport, and the remaining 10% in professions
and services. The canals in northern India discharged 400,000 cusecs
1 of water to
irrigate 24 million acres of land in undivided India. Post 1947, almost half of the
canal system and water supply went to Pakistan and this led to serious food scarcity
in India. To add to the woes, large part of the country lacked basic services such
as power, irrigation, transportation, and communication. The size of agricultural
holdings had declined over the previous five decades, old cottage and small-scale
industries were decaying, and the rural population that constituted about 83% of the
total suffered from chronic underemployment and low incomes since farming in India
was heavily dependent on south-west monsoon (even today, agriculture continues
to be dependent on monsoon despite large number of multipurpose hydroelectric
projects and massive canal networks for irrigation, farming, and farm labor remain
largest source of jobs and account for 1/6th of India’s GDP
2 ). Food security was an
important area as the death of millions of Indians during the famines of 1876–1877
and 1943 (Bengal famine) was permanently registered in every Indian’s psyche.
After independence, India was divided into following states (Box 1).
1 Cusec—A unit of flow of water equal to one cubic foot per second.
2 Reference—The Cloud Messenger. The Economist June 29, 2019.
2 Energy Sector Progression in India
Indians got conversant with the term energy after the enactment of electricity law
that was primarily enacted for use and supply of electrical energy. Section 2 of the
India Electricity Act 1910 defined energy as ‘electrical energy’ that was.
I. Generated, transmitted, or supplied for any purpose, or
II. Used for any purpose except the transmission of a message.
Until recently, the Indian Electricity Act (1910), the Electricity Supply Act (1948),
and the Electricity Regulatory Commissions Act (1998) were the main regulations
for the energy sector. Since commercial energy was a precious resource, these laws
prima facie dealt with the transmission, consumption, use and control of electricity
through licensing mechanism and not with the generation of electric power per se.
There were severe penal actions for theft of electricity. In 2003, all previous laws were
consolidated and a new Electricity Act (2003) was brought into force (Bhattacharyya
2005). Apart from the national level acts, each state is governed by its individual
legislations.
For almost four decades after independence, energy sector continued to be dominated by public sector, and private sector had limited role. It was in 1991 that the
policy on private participation in the power sector was adopted to encourage private
sector participation.
At the time of independence (India was an underdeveloped economy then), around
68% of the population was engaged in agriculture, around 14% in industry (large
and small scale), 8% in trade and transport, and the remaining 10% in professions
and services. The canals in northern India discharged 400,000 cusecs
1 of water to
irrigate 24 million acres of land in undivided India. Post 1947, almost half of the
canal system and water supply went to Pakistan and this led to serious food scarcity
in India. To add to the woes, large part of the country lacked basic services such
as power, irrigation, transportation, and communication. The size of agricultural
holdings had declined over the previous five decades, old cottage and small-scale
industries were decaying, and the rural population that constituted about 83% of the
total suffered from chronic underemployment and low incomes since farming in India
was heavily dependent on south-west monsoon (even today, agriculture continues
to be dependent on monsoon despite large number of multipurpose hydroelectric
projects and massive canal networks for irrigation, farming, and farm labor remain
largest source of jobs and account for 1/6th of India’s GDP
2 ). Food security was an
important area as the death of millions of Indians during the famines of 1876–1877
and 1943 (Bengal famine) was permanently registered in every Indian’s psyche.
After independence, India was divided into following states (Box 1).
1 Cusec—A unit of flow of water equal to one cubic foot per second.
2 Reference—The Cloud Messenger. The Economist June 29, 2019.