The Electricity Act 2003: will it transform the Indian power sector?

The Electricity Act 2003, which has come into force in India since mid-June 2003, consolidates and replaces a number of older legislations on electricity that prevailed in the country. The new act has introduced significant changes to the industry structure and provides for a more flexible regulatory regime and stricter penal provisions for dishonest use of electricity. The act puts in place some time bound targets for licensees and for the restructuring of the electricity industry. This paper reviews the changes brought about by the new act and analyses whether the new act would be sufficient to transform the Indian power sector.