TN Ninan writes in Business Standard:
Delhi’s power supply controversies tell us more than we realise. There are three complaints: the power tariff hike is unwarranted; the private distribution companies (or discoms) that came in three years ago are making profits without showing efficiency gains; and the overall power situation is still unsatisfactory.
What do these tell us? First, that citizens are now capable of organising themselves in the cities, if there is a specific target that they have in mind (in this case, the private discoms). And their grievance gets amplified and heard when politicians and the media echo their voice. [...] Second, the standards that people come to expect from the private sector are different from those they accept from the government, especially when there are visible performance benchmarks.
Ninan’s article argues “in favour of (and not against) privatising more infrastructure.” He concludes:
First, privatisation frees the politician from making promises that he does not deliver (like enough power supply, or 24×7 water).
Instead, the politician can join the citizen and point his finger at the private sector provider—and demand performance! Second, this automatically pushes the system towards greater efficiency—the private sector is asked to show that it is in fact more efficient and can deliver better results.
Third, it brings out the hidden subsidies in the system and encourages rational user charges. This helps reduce waste (you won’t waste electricity if you’re paying for it), it takes away the load on the Budget (most states are virtually bankrupt), and it cuts out the urban mafias that today organise the theft of power and water.
In Mumbai, after the recent floods, the anti-privatisation brigade protested vehemently against Reliance Energy, even though their defence was convincing, and it would have been irresponsible for them to restore power in areas that were still flooded. In fact, if anything, the aftermath of the flood underscored the importance of privatising municipal services in Mumbai: the impact of the floods was vastly exacerbated by the failure in garbage disposal, which would certainly have worked better if it had been privatised.