Playing with Electricity Pricing: Two Steps Forward One Step Back?

Burdening the Poor or Cost Reflective Pricing?
The Pathfinder Foundation (PF), since its inception has consistently argued in favour of cost reflective pricing for every State Owned Enterprise (SOE). This is based on the premise that losses of SOEs are invariably a burden on the public, particularly the poor and vulnerable, in one way or the other. In practice, the public are equivalent to the shareholders of these enterprises. The losses incurred by SOEs have eventually to be borne by the public in the form of higher taxes and/or interest rates. As 80% of Government revenue is collected from regressive indirect taxes, the pain is borne disproportionately by the poor.