Poverty in the Midst of Abundance

Madhya Pradesh is in a low level equilibrium of low quality supply, high loss levels, low collection efficiency, and growing subsidy. This outcome persists despite a reform effort, but one which only consolidated bureaucratic control and introduced a tariff shock without tangible gains to the population. The state has bet on electricity supply as a growth industry, increasing capacity five-fold since 2000, but the resultant overcapacity could further limit room to manoeuvre. The electricity sector continues to be perceived as a political risk, a perception shaped by a post-reform loss by the reforming party, the India National Congress, in 2003.