Could franchising electricity distribution sustain rural electrification efforts?

Purpose - Resulting from large government interventions, India could attain 99% electrification in March 2019. However, the consequences are revenue losses due to lack of real-time efforts in bringing operational efficiencies of the power distribution companies (discoms). Distribution franchisees operate as agents to the discoms for performing their contracted functions in smaller high-loss making areas under jurisdiction of a discom. This study aims to explore how rural franchisees help or hinder requisite results. Design/methodology/approach - A qualitative embedded multiple-case study was conducted. The case focused on two franchisees engaged in metering, billing and collection functions of a high-loss-making rural area dominated Indian state-owned discom. Data were collected through documents, personal observations and semi-structured in-depth interviews with franchisee employees situated at different levels of the organizational hierarchy. A review of pertinent literature and government documents was utilized in forming the codes for collecting the data. Findings - It could be argued that franchisees with strong financial capability, human resources support and monitoring and control facilities could contribute effectively in generating revenue from rural and interior electrified mass. The analysis revealed various challenges serving as hindrances in achievement of contracted targeted outcomes. The analysis resulted in highlighting factors that if implemented could result in the needed outcome. Practical implications - This study could be generalized only to similar socio-economic conditions. The findings could provide policy makers with valuable insights to emphasize on creating win–win situations for all the stakeholders to encourage franchisee participation. Originality/value - This study is unique, as there is a dearth of empirical evidences relating to operational efficacies of these franchisees.