Claiming to improve power supply in the state, the Bahujan Samaj Party government has decided to invite franchisees for input-based power transmission and distribution in the urban areas of Uttar Pradesh. A decision in this connection was taken by the state Cabinet.This privatisation initiative came up after the recent boycott of work by the employees of the power sector.

Left parties raised objection on the decision of the Uttar Pradesh government to give rights of transmission and distribution of electricity to private companies. In a statement released, senior CPI leader Ashok Mishra termed the step as anti-public and asked the state government to reconsider its decision."The decision of the government will push the state almost 50 years backwards instead of bringing in development,"he said.
Claiming transparency in the selection of the franchisee, government officials said the scheme will be implemented in a phased manner. The franchisee will be held responsible for strengthening the electricity system, including the distribution network. “This will not only help consumers get better power supply, but also improve the performance of the energy sector,” claimed the official statement issued by the government.

Explaining input-based franchising, Uttar Pradesh Power Corporation Limited CMD Navneet Sehgal said: “The government will give a certain amount of electricity at a fixed price to the franchisee, who in turn will sell it at a profit and pay the government.”

In a recent meeting, Chief Minister Mayawati had directed senior officials to prepare an action plan to improve the functioning of the power sector. Following this, a proposal for implementing the system was presented before the Cabinet.

The electricity being supplied to rural areas and farmers, however, will be exempted from the franchisee system, the officials said. The electricity distribution system in urban areas through franchisee is already in place in Maharashtra, Orissa, Andhra Pradesh and Delhi. But analysts feel that setting up franchisee system in profitable urban areas and keeping the loss making rural areas with the public sector will increase the burden on the Government and is only benificial to private franchisees.