Power sector reforms - is this time different?

The markets have been largely appreciative of the latest round of power distribution companies debt restructuring. In this context, I am tempted to repost what I had written in the context of the 2012 debt restructuring. In particular, this graphic of the cumulative discom losses as a share of nominal GDP is very instructive - we are today at the same stage in terms of cumulative losses as in 2002.

So is this time any different? On the positive side, as this and this suggests, some of the originally anticipated biggest concerns in terms of the impact of the dilution of FRBM on the economy's credit ratings and perceptions may have been over-blown. The most realistic assessment would be that this is a necessary first-order macro-level intervention required to discipline the discoms. But in the absence of other more important field level initiatives like feeder mapping and rigorous energy audits followed by strict enforcement, we may well end up back to square one come the next electoral cycle.