Amidst the controversies surrounding Enron and AES, can the recent move of 100% FDI in power sector attract foreign players? The energy sector plays a major role in the socio- economic development of any country. Future economic gains and growth of the nation depends not only on the long-term availability of energy, but also on the accessibility, affordability and socially acceptable environment prevailing in the country. India, which is facing shortage of energy, has seen private participation as one means to achieve the energy security. In line with the economic liberalization policies, the Indian Government is opening up the power sector to private participation in a phased manner. The new Electricity Bill 2003 goes one step forward in reforming the power sector, which was characterized earlier by huge losses, acute supply constraints, heavy Transmission and Distribution (T&D) losses etc., as a result of imposed rules and regulations.

The year 2003 was marked as the best year for India with 6% economic growth, and higher investment flows, at 3.5% inflation. With the introduction of the Electricity Bill 2003, the Indian power sector has become a hub of activity. In Indian history this is the first bill, which gave the power sector more autonomy. Some of the main issues include: Generation of electricity to be independent of licensing; captive power plants to be freely established; transmission lines to be freely accessible; open access to distribution of power and trading of power to be allowed with permitted license. Power Trading Corporation (PTC) is one such successful company in distribution, which acts as an intermediary between suppliers and buyers of electricity.