Energy policy of India: cost differences of two scenarios

India's energy sector is today in transition. The principles of public management (which has prevailed up to now) are being revised, as the present situation cannot be sustained in the future, neither in terms of financing nor in terms of physical performance of the sector. The aim is to rapidly improve the efficiency and volume of operations on the Indian energy scene. This reform is designed to benefit the economy in a large way. However, it also has costs, for example that of the initial gestation period necessary for the private sector to take over the supply side. This paper explores detailed energy policy options so as to decrease or even minimize these costs. To do so, it compares a reference case with an alternative policy in which the pace and modes of the reform vary. It assesses the cost differences of the two options, using a range of five cost items highlighting the differential. The comparison of the total amounts of these items as well as of the profile of expenditure suggests that today's reform scenario may not be the optimal one. (C) 1998 Elsevier Science Ltd. All rights reserved.