An Indian Civilizational Perspective

India loses 1% of GDP in Electricity Theft!

Here is a joint report on India from Wharton Business School and Boston Consulting Group on India. It discusses how despite the growth – the infrastructure in India is in shambles!

The casual visitor to India might find it hard to believe that it houses one of the world’s hottest economies — one increasingly mentioned in the same breath as China’s. In India, shabby airports, potholed roads and clogged ports remain the norm, and major cities suffer regular brownouts, especially during the summer when demand for electricity surges. The government estimates that India will need to spend $150 billion over the next seven to eight years to bring its infrastructure up to par.

Is it because India is poor or lack of resources? Quite to the contrary!! India is poor BECAUSE of our bad infrastructural policies! Last year India lost 1% of GDP on just electricity theft!! If that doesn’t make you want to throw out all the SEBs and replace them with private enterprise what will???

Theft has played a major role, too: It’s not uncommon for consumers to simply hook their homes and businesses illegally to the transmission grid, or to bribe corrupt board employees to look the other way. Between 1992 and 2002, 40% of the power generated in India was stolen. Analysts estimate that SEB losses in the financial year ending March 31, 2004, the most recent figures available, came to $4.7 billion, or nearly 1% of GDP.

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4 Comments
  1. kuffir says

    desh, india loses more than 1% of gdp due to electricity theft – the seb losses can’t be equated with theft. honest consumers pay much more than sebs for the theft by way of increased tariff and bills.

  2. kuffir says

    desh, india loses more than 1% of gdp due to electricity theft – the seb losses can’t be equated with theft. honest consumers pay much more than sebs for the theft by way of increased tariff and bills.

  3. Desh says

    Kuffir: I had posted these Stats from Indian today.. and their figure of losses of SEBs due to theft was $6.8 billion. I guess what you are saying is that when these losses are “recovered” from the consumer – there is an “add-on” which comes out to be more.

    I agree.

    Actually, we need to understand who is paying and who is stealing. Yes, those in slums do steal.. but the amount stolen in the factories and businesses is far more.. so in my estimate – it is basically the rich who steal .. and the poor farmer in a village .. who has to pay by way of poor crop because he did not have electricity to do work! Ultimately the rural India pays for the theft of the Urban India.

    Will the Private Sector entering the SEB market be better.. heck yes!! I doubt that annual compounded increase in the electricity tariff will be > $7/year! … Because that is what India loses everyyear.. year after year!!

    so all this bunk about private sector being more expensive is bunk IMHO!

  4. Desh says

    Kuffir: I had posted these Stats from Indian today.. and their figure of losses of SEBs due to theft was $6.8 billion. I guess what you are saying is that when these losses are “recovered” from the consumer – there is an “add-on” which comes out to be more.

    I agree.

    Actually, we need to understand who is paying and who is stealing. Yes, those in slums do steal.. but the amount stolen in the factories and businesses is far more.. so in my estimate – it is basically the rich who steal .. and the poor farmer in a village .. who has to pay by way of poor crop because he did not have electricity to do work! Ultimately the rural India pays for the theft of the Urban India.

    Will the Private Sector entering the SEB market be better.. heck yes!! I doubt that annual compounded increase in the electricity tariff will be > $7/year! … Because that is what India loses everyyear.. year after year!!

    so all this bunk about private sector being more expensive is bunk IMHO!

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