New Delhi, Oct. 12 -- In the early 2000s, Gujarat had an electricity problem that was also a fiscal problem. More than a third of the power supplied was lost in transmission and distribution. Collections were weak and rural service unreliable. The state could raise tariffs sharply, squeeze supply or keep absorbing the losses.

There were few precedents for aggressively collecting overdue electricity bills, and going after defaulters was widely considered political suicide. Yet, Gujarat chose the harder among its options: billing was tightened, power theft pursued and payment channels widened. Jyotigram separated agricultural feeders from other rural demand, making farm supply predictable while improving service for everyone else.

The num...