Indira Gandhi Institute of Development Research, Mumbai director Kirit S Parikh feels that an SEB with geographically widespread distribution system provides an opportunity to offer jobs to political workers. However, the quantum of overstaffing varies from state to state.

In 1990-91, Gujarat had 9 employees per million units of electricity sold, Bihar had 30, Orissa had 44, Uttar Pradesh had 24 and West Bengal had 27, according to Parikh. He was delivering the M H Gopal Memorial Lecture on Monday, the concluding day of the 81st annual conference of the Indian Economic Association, in Bangalore.

``The subsidies for agricultural power given by all SEBs add up to Rs 7,000 crore per annum. Power consumption by agriculture is nearly 30 per cent of the total and the burden of cross-subsidy is biting other users who arestarting to resist. The sickness of the Indian power sector is directly attributable to the financial sickness of SEBs,'' he added.

In the Eighth Plan (1992-97) the country added less than 16,000mw compared to the revised and lowered target of 31,000mw. In this context, the union government in October 1991 opened up the power sector to foreign private players for setting up power generation units in the country. However, only 3 private power projects had come up on date, he said.

Parikh is of the view that the inadequate infrastructure has constrained the growth of the Indian economy. ``The ports are congested in the country, roads are over-crowded and in poor condition. The telephone density is low and information infrastructure is inadequate,'' he said.

Distribution of power in a given area has to be a monopoly. However, the local area can be relatively small and a state as a whole may have many distributing companies. While these companies do not compete with each other, their performance can becompared and public pressure can be brought to the relatively inefficient companies.

``India should consider setting up of separate distribution companies at taluka or a district level and let the local body buy electricity from generators and sell it to the consumers, collect bills and retain profits,'' he said.

Parikh said the proposed private participation programme in road building has not been successful. ``The attempts to privatise roads by asking private firms to build, operate and transfer (BOT) route did not materialise due to several factors. The main problem is non-excludability of users. The road network has to cater to all users. Once an alternative is available, the projected traffic on the toll road becomes uncertain and more price elastic,'' he pointed out.