Taking root: Independent Regulatory Agency model of regulation in Indian electricity sector

Abstract

The rise and spread of Independent Regulatory Agencies (IRAs) represented institutional change to bring credibility and efficiency to the sectoral governance, more so in the case of developing countries. On functional grounds a set of responsibilities were delegated to IRAs but over years research has shown that regulatory decision-making hasn't remained insulated from political pressures, precisely what it was intended to do. Using case of Indian electricity sector this article examines decades after being established how IRAs are taking root. To this purpose, it relies on ‘regulatory arrangement’ over analysing IRAs in isolation, and, measures formal and de facto actor influence in regulatory decision-making. Electricity in India is a concurrent subject, so data has been collected from three states. The findings suggest an emerging pattern that IRA's consolidation of decision-making role is not as Electricity Act, 2003 envisaged, though design of regulatory process has altered previous arrangements and put IRAs at the centre of decision-making. This could potentially guide redesign of sectoral regulation and role of IRAs to meet changing nature of electricity governance when attempts are being made to make substantive modifications to the Electricity Act, 2003.