Barriers to viability of Indian power distribution companies

The purpose of this paper is to develop an interpretive structural modeling (ISM) of barriers related to viability of Power Distribution Companies (discoms) in India.

Feedback from the Experts of Indian power sector has been taken as the basis to develop the model for barriers to viability of discoms, where major barriers have been identified through extent review of literature and through discussions with experts in the power sector keeping the viability of discoms in focus, and the hierarchical structure of barriers has been developed using ISM.

An interpretive structural model has been developed for discom-related factors (barriers) affecting its viability. The hierarchical structure portrays the impeding factors of viability and showcases that lack of regulatory effectiveness, inadequate tariffs and lack of government’s expenditures on power sector are the key barriers.

This paper has implications for both practitioners and academics. For practitioners, it provides an indicative list of major barriers affecting the viability of Indian discoms. For academics, the methodology used provides a mechanism to conduct an exploratory study by identifying the key variables of interest and emphasizing their interactions through hierarchical structures.

The proposed model for barriers to viability of discoms developed through qualitative modeling technique is a pioneering effort altogether in the context of power distribution companies in India. Understanding contextual relationships among key barriers to viability of discom’s is neglected in existing literature, and this paper makes a contribution in this regard.