Citizen journalism: Why India’s power market reforms must respect federal fabric

India’s federal structure, while constitutionally balanced, often leans toward centralisation—especially in sectors like power that fall under the Concurrent List. In theory, this shared responsibility should enable cooperative governance between the Centre and States. But in practice, the tension is real, especially when centralised reforms impact state autonomy.

Take the case of SCED (Security Constrained Economic Dispatch). While the inter-state version has helped optimize dispatch across central generating stations, extending SCED into the intra-state space raises critical questions:

• What happens to state-level planning autonomy?

• How will state discoms manage their portfolios when economic dispatch is dictated centrally?

• If a cheaper generator within the state is overlooked in favor of an “optimal” regional choice, who bears the cost, or the political fallout?

Implementing intra-state SCED without intra-state ABT, metering, and clear deviation frameworks will create a dispatch system without accountability. Worse, it may centralize dispatch decisions in a way that bypasses the operational, commercial, and political realities at the state level.

States may face:

• Revenue losses (especially from state-owned or tied-up generation not dispatched)

• Reduced flexibility in managing their own grid and contracts

• A perception of losing control to central operators in the name of efficiency

India’s power market reforms must respect the federal fabric. Without meaningful state buy-in, intra-state SCED may be seen less as a technical advancement and more as a shift toward central command, contrary to the very spirit of the Concurrent List.

Disclaimer:

Author is a Power sector professional with experience across power generation, distribution, and trading in Indian power markets.

The views and opinions expressed in the article are those of the author and do not reflect the official policy or position of NewsMeter.