New Delhi, Sept. 9 -- With a milder summer than expected and early rains, electricity supplies this season have turned out to be more than adequate to meet demand surges due to the extensive use of air-conditioners.

The generation margins reflect efficient policy planning and actions by the Union government, a challenging task, especially since 93% of the electricity produced in India is purchased and distributed by state-owned utilities that are weighed down by populist imperatives. On average, they end up charging less than what it costs to serve the consumer, thereby imperilling investments across all limbs of electricity supply, from generation to distribution.

A key lynchpin of the government's reform efforts that has steered capac...