Tariff Philosophy

Alok Kumar and Sushanta K. Chatterjee

in Electricity Sector in India

Published in print October 2012 | ISBN: 9780198082279
Published online September 2012 | e-ISBN: 9780199082063 | DOI:
Tariff Philosophy

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This chapter provides a historical perspective on tariff regulation in the electricity sector in India. It describes how the responsibility of tariff fixation has moved from the government or government-owned organizations to an independent regulator over the years. It also explains the rationale behind distancing of the government from tariff regulations. The concepts of cost-plus tariff regulation and price cap regulation have been explained. In this backdrop, tariff philosophy under the new Act has been presented while, at the same time, critically examining the gap between this philosophy and tariff regulation in practice. The analysis covers the regulation of tariff by the Central Commission as well as by the State Commissions before presenting the way forward in this regard.

Keywords: India; electricity sector; tariff fixation; tariff regulation; cost-plus tariff; price cap regulation

Chapter.  4733 words. 

Subjects: Economic Development and Growth

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