Elite capture : residential tariff subsidies in India / Kristy Mayer, Sudeshna Ghosh Banerjee, and Chris Trimble.

Format:

Book

Government document

Author/Creator:

Mayer, Kristy, author.

Banerjee, Sudeshna Ghosh, 1973- author.

Trimble, Chris, author.

Language:

English

Subjects (All):

Electric utilities--India.

Electric utilities.

Subsidies.

India.

Tariff--India.

Tariff.

Subsidies--India.

Elite (Social sciences)--India.

Elite (Social sciences).

Physical Description:

xvii, 82 pages ; 26 cm

Place of Publication:

Washington, DC : World Bank Group, [2015]

Summary:

India is home to one of the world's largest populations without electricity access. Traditionally, the Government of India has extended rural electrification using two instruments: consumption subsidies and free connections to households below the poverty line (BPL). This study centers on subsidies for electricity consumption, examine their size, frequency, and distribution to households. It uses poverty as a lens through which to focus more closely on these concepts, asking such questions as how well subsidies are targeted to BPL households. The study findings demonstrate that subsidies cover 87 percent of all electricity consumed by India's households. Furthermore, residential subsidies are large compared to the cost of electricity and the small cross-subsidy amounts taken from non-subsidized residential consumption. Moreover, the vast majority of electrified households receive a net subsidy on their electricity consumption. About 87 percent of subsidy payments go to households living above the poverty line (ABL) instead of to the poor, and over half of subsidy payments go to the richest 40 percent of households. The key factor driving this outcome is tariff design. Only some states have highly concessional BPL tariffs. In most states, tariffs for the non-poor are subsidized nearly as much as BPL tariffs. Because non-poor households consume significantly more electricity than poor households, they are eligible for significantly higher subsidies. Owing to the relatively low access rate among poorer households, many of them are unable to take advantage of tariff subsidies. The World Bank Studies series is available for free download online through the Open Knowledge Repository (https://openknowlege.worldbank.org). Book jacket.

Contents:

Chapter 1 Introduction 1

Setting Residential Tariffs 1

Study Goal and Objectives 2

Data Sources 2

Terminology and Key Concepts 3

Targeting the Poor 5

Structure of This Report 5

Annex 1A National Sample Survey Description 6

Annex 1B Technical Note on Matching Households and Tariff Schedules 7

Notes 8

Chapter 2 Patterns of Residential Consumption and Subsidy and Cost Trends 9

Residential Sector Profile 9

Subsidy and Cost Trends 11

Notes 14

Chapter 3 Residential Tariffs Overview 15

Tariff Structures 15

Tariff Schedule Characteristics 16

How Fixed Charges Impact the Poor 19

Concluding Remarks 22

Notes 30

Chapter 4 Subsidy Size and Household Distribution 31

Average Supply Cost and Tariffs 31

Subsidy Prevalence and Magnitude 31

Distribution of Subsidies and Cross-Subsidies 35

Concluding Remarks 38

Chapter 5 Targeting of Subsidies 41

Subsidy Incidence 41

What Prevents Better Subsidy Targeting? 44

Concluding Remarks 47

Notes 47

Chapter 6 Cost of Residential Subsidies 49

Cost Summary 49

State and Power-Sector Expenditures 49

BPL Tariff Eligibility 50

State-Level Cost Variations 50

Concluding Remarks 52

Notes 52

Chapter 7 Toward Better Subsidy Performance 53

Good Practices in India 53

Meeting Medium-Term Policy Goals: Model Tariff Structures 55

Near-Term Policy Actions 58

Shortcomings of IBT Adjustments 61

Additional Considerations 63

Looking Ahead 63

Note 63.

Notes:

Includes bibliographical references.

Other Format:

Online version: Mayer, Kristy. Elite capture.

ISBN:

9781464804120

1464804125

OCLC:

900623223