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Electricity distribution utilities in India are currently unable to cover the cost of their operations from the sale of electricity.

The absence of cost recovery has serious implications for the financial health of the electricity sector: it undermines efforts to maintain investments in transmission and distribution systems (and therefore to expand rural electrification), deliver reliable power, and support the development of renewable energy. Tariff reform is key to solving these issues; however, tariff reform can be unpopular.

This report presents the findings of a household survey that sheds light on the awareness and views of different socioeconomic and geographical groups regarding electricity subsidies and electricity tariff reform. It concludes that there is a significant lack of awareness of the existence and size of electricity subsidies, although subsidy reform is a tough sell. At the same time, surveyed households recognize that higher power prices would have significant negative impacts on their daily activities, and some of them show willingness to pay for a more reliable power supply.