1. Improving Access/Quality of Basic Infrastructure Services in Urban India
Anna Agarwal
MIT India Reading Group
May 2010

2. WHERE ARE THE OBSTACLES ?
FOCUS ON ELECTRICITY
WHERE ARE THE OBSTACLES ?
Absence of Reliable Infrastructure
Lack of Investment
Corruption
Technically difficult
e.g. topographically complex
Affordability
Encourage Private Investment
Eliminate the Middle Man
Alternate Solutions e.g. Decentralized Solar
Innovative Financing
Each of these bullets need further study to make policy recommendations or create business opportunities to address the challenge

3. Why is private investment limited in the power sector
FOCUS ON ELECTRICITY
Hypothesis 1: Private investment is crucial to providing reliable electricity
Why is private investment limited in the power sector
Not commercially viable due to low user charges (basic infrastructure services are considered public goods are free or heavily subsidized)
Does the public really want subsidized services?
What are the hidden costs of unreliable electricity

4. Analysis for Hypothesis 1: Hidden costs of unreliable electricity
FOCUS ON ELECTRICITY
Analysis for Hypothesis 1: Hidden costs of unreliable electricity
Wasted Productivity
Downtime due to power cuts
Backup for Power cuts
Generators, Invertors : Capital Costs, O&M Costs
Illegal Electricity Connections are more expensive
Often provided by local “dons” (recall discussion on poverty premium)
Maybe the cost of RELIABLE power is less than the cost of UNRELIABLE+BACKUPS