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Establishing the baseline for the Kollam district court reform

by Siddarth Raman.

An important milestone in Indian legal system reform has been underway in Kollam district for the last year. The High Court of Kerala has launched a court for cheque dishonour cases under Section 138 of the Negotiable Instruments Act as its first pilot in the 24x7 ONCourts initiative. PUCAR - of which XKDR Forum is a part - is a knowledge partner to the High Court of Kerala in this.

24x7 ONCourts aims to make the litigant experience efficient, predictable and seamless. Before assessing the intervention's impact, we need a baseline. We estimate five measures of court performance using a random sample of 100 disposed cases filed in 2015-2024. In Kollam, the median case takes 609 days over 12 hearings. Only 19% of hearings are substantive. The first substantive hearing occurs after 240 days. The gap between hearings is 61 days. Stage-wise analysis shows that the most time is spent in getting the litigants to court, and most cases do not reach trial. We compute the same metrics for Thrissur to enable future difference-in-differences analysis.

Motivation

Changing a system is hard. Public policy interventions in India are often guided by conjecture, anecdote and assumption. Too many reforms fail because they are not grounded in data, and their outcomes are not measured. A data-driven process with clear hypotheses on the problem, the solution and the expected outcomes, backed by rigorous measurement and empirical evidence, is needed to distinguish success from failure.

Early in the 24x7 ONCourts journey, we planned for continuous assessment. The first step is to establish a baseline. It fixes the pre-intervention state so later changes can be attributed to the intervention rather than unrelated trends. Publishing a compact, replicable baseline also lets other researchers repeat the measurement after go-live and compare the site of implementation against unaffected locations.

Approach to measurement

Courts and court processes should be judged by their impact on litigants; they are the central stakeholders in the system. In this, there are two types of measures one can develop. There are coarse black-box metrics that give a broad picture of outcomes - like the time to disposal. Alongside this, there can be fine-grained process metrics like the time taken to make payments, extent of delay attributable to postal services or police processes, or the time taken by an accused person to file for bail. These are necessary for continuous improvement of processes. Existing court systems do not capture or publish this type of process data.

We use coarse metrics for our baseline, relying purely on public data, so that anyone can reproduce the numbers without privileged access to court systems. As courts modernize and publish more data in the public domain, we may be able to develop more sophisticated metrics.

Using this approach, we pick five measures of court performance:

1. Time to disposal is the number of days from filing to the court's final order.
2. Hearings to disposal is the number of hearings a case goes through before it ends.
3. The share of substantive hearings is the fraction of hearings that move the case forward towards resolution. For instance, a hearing where the judge is on leave or a summons is re-issued is non-substantive; hearings where evidence is recorded or arguments are heard count as substantive.
4. Time to the first substantive hearing is the wait before meaningful progress begins.
5. Time between hearings is the within-case median gap between consecutive hearings. Lower the time, quicker the next hearing. The inter-quartile range (IQR) across cases is a measure of scheduling predictability. A lower IQR implies less variation in the time between hearings across cases.

A more detailed discussion of these measures and how to use them in evaluating court reforms is available here.

We conducted data collection and analysis in November 2024. Our approach, methodology and data are public, so that others can repeat the measurement for different samples, periods, or districts using e-Courts records.

Methodology

This article reports the pre-reform numerical values for Kollam, using a simple empirical strategy. We construct a baseline for Kollam before the 24x7 ONCourts intervention and compare it with Thrissur, which serves as the control district for future difference-in-differences analysis. We selected Thrissur as the control district after eliminating regions with existing special NI courts. Thrissur mirrors Kollam in judicial capacity (approx. 2,500-2,900 pending cases per judge), economic activity (GDVA per capita ratio of 0.9), and administrative composition (both have municipal corporations).

While Thrissur shares structural similarities with Kollam, direct cross-sectional comparisons of absolute performance levels between the two districts are methodologically unsound. Districts differ in idiosyncratic ways that are difficult to quantify -caseload volume, caseload mix, allocation rules. Consequently, our evaluation strategy avoids asking 'Is Kollam faster than Thrissur?' Instead, we focus on within-district changes over time.

We draw a random sample of 100 disposed Section 138 matters filed in 2015–2024 from Kollam and Thrissur using the public e-Courts database. Cheque dishonour cases are filed before the magistrate's court. In Kerala, these are filed as private complaints (criminal miscellaneous petitions) before becoming criminal cases. For each case, we reconstruct the case lifecycle from hearing dates and order text, tagging hearings by stage and classifying them as substantive or non-substantive.

For the baseline, we report medians and means. Medians describe the typical case; means indicate the influence of long tails. By sampling only disposed cases, we measure the speed of the 'successful' cohort. We acknowledge this introduces survival bias: this metric underestimates the time for difficult cases still stuck in pendency. We aim to address this in future work by using survival analysis to estimate the time to disposal for ongoing cases.

Results

The tables below report the pre-reform baseline values for Kollam and, for comparison, Thrissur. They describe how long cases took, how many hearings they required, and how much of that time and effort was substantive.

1. Time to Disposal (days)

   District	Median	Mean
   Kollam	609	782
   Thrissur	792	1003

2. Hearings to disposal

   District	Median	Mean
   Kollam	12	15
   Thrissur	7	10

3. Share of Substantive Hearings

   District	Median	Mean
   Kollam	19%	26%
   Thrissur	25%	28%

   Note: The dataset spans 2015-2024; COVID-19 lockdowns (2020-2021) introduce exogenous shocks to the metric; it has not been adjusted for here.

4. Time to First Substantive Hearing

   District	Median	Mean
   Kollam	240	446
   Thrissur	276	447

   Note: Changes in procedure resulting from the shift from Criminal Procedure Code (CrPC) to the Bharatiya Nagarik Suraksha Sanhita (BNSS) may affect this metric.

5. Time Between Hearings

   District	Median	Mean	IQR
   Kollam	61	74	48
   Thrissur	123	121	62

Stage-wise Analysis

We analyse how time and hearings are distributed across case stages, as part of understanding the pre-reform baseline. In S138 cases, the case trajectory is:

• A complainant files a case.
• Post scrutiny and error correction, the case is registered as a miscellaneous petition.
• The judge takes cognizance and the case is now a criminal case.
• On cognizance, a summons is issued to the accused, followed by warrants and other methods to compel appearance of the accused.
• On appearance, the accused pleads not guilty and takes bail.
• Trial follows with evidence and arguments.
• The court delivers a judgement.

Not all cases go through all stages. For cases that reach each stage, we compute the median and mean time and hearings spent at that stage.

Kollam	Time		Hearings		Cases
	Median	Mean	Median	Mean
Filing - Registration	0	4	-	-	99*
Cognizance	149	268	2	4	63
Appearance	312	533	5	7	74
Trial	337	454	11	15	41
Judgement	27	38	1	1	100

Note: *An error on e-Courts for one case reports the registration before the filing, which has been excluded.

Thrissur	Time		Hearings		Cases
	Median	Mean	Median	Mean
Filing - Registration	0	1	-	-	100
Cognizance	235	317	2	2	52
Appearance	721	878	5	8	81
Trial	335	451	8	12	13
Judgement	42	69	1	1	100

In both districts, getting the litigants to court takes the most time. We also observe that most cases do not reach trial. This reaffirms earlier observations in other district courts.

Way Forward

24x7 ONCourts has been running for about a year. It is too early to compare outcomes - only a fifth of cases filed have been disposed. But this benchmark will enable comparison when the court reaches its full load. We aim to track the court through this journey and continue to share updates on the court's performance.

We will continue to refine our methodology. The baseline analysis provides simple statistics from a set of 100 disposed cases. This suffers from the problem of censoring. We are only observing cases where the event of interest has occurred and we do not take into account ongoing cases. In systems like the court, where pendency is common, we should be using methods like survival analysis to account for ongoing cases. Other methods like time series analysis could identify trends. With Thrissur as a control, a difference-in-differences design can attribute average changes to the 24x7 ONCourts intervention. The present benchmark is the starting point; as post-intervention data accumulate, we can apply more demanding econometric checks using these tools.

Data and metrics form the backbone of evidence-based reform. The 24x7 ONCourts dashboard reports case statistics on a public dashboard in near real-time. This openness to measurement and public accountability sets a precedent for judicial reform initiatives across India. Public reporting supports continuous monitoring, mid-course correction and iterative refinement. A steady flow of transparent data, paired with simple, repeatable measures, is the practical route to learning what works.

References

24x7 ONCourts website.

Vision, ONCourts 24x7.

Evolution and Implementation of the 24x7 ONCourts: A Journey of Innovation Through Collaboration, PUCAR, 2024.

In Service of the Republic: The art and science of public policy, Vijay Kelkar and Ajay Shah, Penguin Allen Lane, 2022.

Approach to evaluate court reforms, Siddarth Raman, Seminar #9 of the series 'Indian Legal System Reform' by XKDR Forum, 2024.

Evaluating contract enforcement by courts in India: a litigant's lens, Pavithra Manivannan, Susan Thomas, and Bhargavi Zaveri-Shah, XKDR Working Paper No. 16, 2022.

How substantial are non-substantive hearings in Indian courts: some estimates from Bombay, Pavithra Manivannan, Karthik Suresh, Susan Thomas, and Bhargavi Zaveri-Shah, The Leap Blog, 6 December 2023.

Get them to the court on time: bumps in the road to justice, Mugdha Mohapatra, Siddarth Raman, and Susan Thomas, The Leap Blog, 12 June 2025.

Understanding Judicial Delays in Debt Tribunals, Prasanth Regy and Shubho Roy, Working Paper 195, National Institute of Public Finance and Policy, 2017.

Making courts transparent: What every litigant should know before filing a case, Pavithra Manivannan, Siddarth Raman, Gokul Sunoj, and Bhargavi Zaveri-Shah, Bar and Bench, 2025.

A litigant's guide to courts: How efficient is your court?, Pavithra Manivannan, Siddarth Raman, Gokul Sunoj, and Bhargavi Zaveri-Shah, Bar and Bench, 2025.

A litigant's guide to courts: Understanding predictability in India's courts, Pavithra Manivannan, Siddarth Raman, Gokul Sunoj, and Bhargavi Zaveri-Shah, Bar and Bench, 2025.

A litigant's guide to courts: Towards a more measurable future, Pavithra Manivannan, Siddarth Raman, Gokul Sunoj, and Bhargavi Zaveri-Shah, Bar and Bench, 2025.

The Long Road to Change, Ajay Shah and Amit Varma, Episode #36 of the podcast 'Everything is Everything', 1 March 2024.

Siddarth Raman is senior research lead at XKDR Forum. XKDR Forum is part of PUCAR - Public Collective for Avoidance and Resolution of Disputes. PUCAR is a knowledge partner to the High Court of Kerala in their 24x7 ONCourts initiative.

From Statute to Zero-Cost: Section 31A and the Bombay High Court's Zero-Cost Culture

by Prashant Narang and Vishnu Suresh.

Why this matters now

In 2015, Parliament rewrote Section 31A of the Arbitration and Conciliation Act to make loser-pays the default i.e., compensate the winner and deter abuse. A decade on, our mixed-methods study of the Bombay High Court's arbitration docket(2023-24) shows a stark gap between that legislative design and courtroom reality. Out of 102 decisions under Sections 11 (appointment) and 34 (set-aside), costs were imposed in only four (3.9%). Even then, costs were framed as exceptional sanctions for egregious conduct - not as routine reimbursement that follows the event.

Parliament's 2015 insertion of Section 31A followed the 246th Law Commission Report (2014), which condemned India's token-costs culture under the Code of Civil Procedure and urged a structured, outcome-linked "costs-follow-the-event" rule for arbitration. Section 31A sought to import the English loser-pays norm to ensure both indemnity and deterrence. Yet, a decade later, the provision functions largely as a dead letter.

This reluctance is not harmless. When weak Section 11 or Section 34 petitions carry no real downside, the expected cost of delay collapses onto the opponent and the taxpayer. The result is a deterrence gap: fewer incentives to screen out speculative filings, more tactical adjournments, and a credibility problem for India's "arbitration-friendly" promise.

In our new paper (publicly available), we build the first mixed-methods baseline for any Indian High Court on post-2015 costs in arbitration-related litigation. We combine a complete corpus of BHC decisions in 2023-24 with 22 confidential stakeholder interviews (judges, arbitrators, and counsel) to explain the pattern and to propose targeted reforms.

What we did

Prior commentary (and court exhortations in Salem and Uflex) diagnosed India’s token-cost culture but largely at the Supreme Court or in international arbitration. So, we chose to focus on a major High Court post-2015. We identified every Bombay High Court decision under Sections 11, 34 (and related Section 37 appeals where relevant) in calendar years 2023–24; after deduplication and exclusions, 102 reasoned decisions remained (54 in 2023; 48 in 2024). We coded each decision for whether costs were awarded, quantum, reasons, and whether judges engaged with Section 31A’s statutory factors. Interviews (22 conducted) supplied explanatory mechanisms behind judicial practice.

What we find

3.9% of decisions imposed costs; 96.1% did not. Where imposed, costs were justified as punishment for delay/illegality - not as routine indemnity. In 60 decisions, the court itself recorded conduct that maps onto Section 31A triggers. Costs were imposed in 4; in the remaining 56, no cost order followed. This selective enforcement blunts deterrence. With no articulated scale or factors applied, lawyers cannot advise clients on realistic exposure.

Why the default drifts to "zero-cost"

One, Section 31A(1) gives courts/tribunals discretion to determine costs. Section 31A(2) supplies a loser-pays presumption, but only if the decision-maker chooses to engage. Written reasons are required for departing from the presumption - not for declining to consider costs at all. This creates a one-way gate.

Two, interviewees repeatedly flagged a cultural aversion to "appearing punitive". For judges approaching retirement, the post-retirement arbitration market sharpens this caution: visible toughness on costs can be perceived as party-unfriendly, potentially affecting future appointments. That behavioural preference often persists into arbitral roles.

Third, Section 31A lists factors but lacks practical scales. In our four cost-imposing cases, sums ranged from Rs. 1 lakh to Rs. 40 lakh - with thin links to documented outlay. Practitioners consequently cannot price risk ex ante; costs become a lottery, not a calculable exposure.

How reasons are (not) written

Most orders end with a formulaic "no order as to costs", even when the judgment itself records behaviour that Section 31A treats as cost-triggering: obstruction, delay, frivolous claims, wasted hearings, or refusal of reasonable settlement.

Two of the four cost-imposing judgments offer only a one-line figure; two provide a brief narrative (e.g., "taking a chance") and sometimes cite one cost figure from the record, but none works through Section 31A's checklist or ties quantum to documented expense and deterrence. The resulting spread (Rs. 1-40 lakh) looks unanchored. For users, this reads like gesture, not governance.

What needs to be done

Our proposal aligns with the 246th Law Commission (2014) and the T.K.V. Committee (2024). One, create a rebuttable default: award reasonable, receipted costs to the successful party. Require brief reasons (even 1-2 sentences) when withholding costs. This small change collapses the one-way gate that currently rewards inaction. Two, keep indemnity as the baseline and add calibrated uplifts for documented delay tactics, non-disclosure, wasted hearings, or unreasonably rejected settlement offers - all already listed in Section 31A(3). Three, consider importing a narrow, high-threshold wasted-costs power (on the UK model) against improper or negligent conduct that needlessly increases expense. This targets the source of delay when it lies with representatives rather than clients.

Limitations

We included only one jurisdiction (Bombay), a two-year window, and interviews that exclude sitting judges and in-house counsel. Arbitral awards and proceedings were out of scope (confidentiality), though interviews illuminate arbitral practice.

Conclusion

Section 31A promised efficient, fair, and predictable cost allocation. In the Bombay High Court's arbitration-related litigation, it has largely delivered neither indemnity nor deterrence - except at the margins of overt misconduct. A rebuttable default in favour of reasonable costs, brief reasons for exceptions, receipt-anchored scales, and conduct-linked uplifts would realign daily practice with Parliament's indemnificatory intent and close the deterrence gap that now fuels speculative petitions.

Read the full working paper "From Statute to Zero-Cost: Section 31A and the High Court's Zero-Cost Culture", here.

The authors are researchers affiliated with TrustBridge Rule of Law Foundation.

Anchor pension policy to its core design principles

by Renuka Sane.

Pensions policy, at its heart, stems from paternalism. When people stop working, they stop earning, and if they haven't saved enough, face the risk of destitution in old age. In most societies, the state feels compelled to step in with tax-payer funded cash transfers in the form of old age pensions. Over time, these commitments have expanded to cover entire populations. Yet financing the consumption of all elderly citizens through welfare transfers is fiscally unsustainable. As a result, pensions policy has focused on how to force individuals to build wealth during their working life. This coercion is justified on the grounds that people tend to underestimate their future needs, and discount the future too heavily. Assessment of pension policy, therefore, must recognise that it flows from the state's decision to compel individuals to save for their own future consumption. The legitimacy of this coercion depends on whether it contributes towards preventing poverty in old age. This article examines pension policy from such a perspective. The design of means-tested transfers for the already impoverished elderly, while significant, is not addressed here.

Four elements of a sustainable pension

This paternalistic foundation shapes the four defining features of a funded pension system. First, participation is mandatory. Second, the savings are illiquid. Third, the structure is low cost. Fourth, it converts savings into a stable stream of income in retirement. These features make a pension different from other forms of saving or investment. Take away one of them, and the system begins to resemble an ordinary investment account rather than a vehicle for old age income security.

Let us begin with the first feature: mandatory participation, where individuals are forced to save a proportion of their monthly income into a pension account. But, compulsion requires an employment relationship so that contributions can be enforced. Extending such schemes to the informal sector where workers move between jobs or remain outside formal payroll systems is a challenge. Further, there is the question of what contribution rate to mandate: if it is set too low, the accumulated savings will be inadequate for retirement; if set too high, it will unduly constrain consumption during working life.

The second feature, illiquidity, is put in place to provide income in old age, not to finance mid-life consumption. This design feature is always contested. Individuals argue that since it is their money, they should be able to access it when they need it. Such demands become greater when contribution rates are very high. Policymakers often give in, allowing partial withdrawals or loans against the accumulated corpus. But withdrawals can leave retirees with inadequate balances, defeating the entire purpose of the mandatory contribution.

The third feature, low costs, is crucial because of the long horizon of pension saving. Fees and commissions, even if small annually, compound heavily over decades. High costs can erode a significant portion of the final corpus. Keeping costs low is especially important because participation in a pension scheme is compulsory; having coerced individuals to save, policy cannot then channel their money into high-cost funds that primarily enrich fund managers. The global experience suggests that keeping costs low requires deliberate policy design. This can be achieved through two ways.

1. Auction-based system for selecting limited fund managers (as was the case of India's National Pension System (NPS)). The larger the corpus with a fund manager, the lower the fees. For example, Vanguard S&P500 ETF has assets of about US$1.5 trillion, and an expense ratio of about 0.03% (3 bps). When fund managers are given a specific mandate to manage a large corpus, costs can be negotiated down. Pension policy, especially when the market is very small, must then decide between the competing trade-offs of multiple managers and choice vs. limited fund managers and low costs.

2. Limit investment options to low-cost passive index funds. Over long periods, index funds typically outperform most actively managed funds, net of costs. Critics argue that restricting investment options stifles innovation and deprives individuals from exercising choice. But the idea of unfettered choice has also been questioned, given that most individuals may not be equipped to make complex financial decisions. These trade-offs become relevant because of the forced nature of savings.

A reasonable middle ground lies in offering a limited number of fund managers who provide a restricted menu of low-cost index fund options. Index funds with equity exposure provide for an upside and international exposure can help reduce risk through diversification.

The final feature, a retirement income, is what completes the cycle. This can be achieved through an annuity, which converts the accumulated balance into a guaranteed stream of payments for life. In the case of an inflation-indexed annuity, the payments are adjusted for inflation throughout retirement. While annuities provide longevity insurance (and can sometimes provide inflation protection), they are often unpopular because they appear to offer poor returns and lack flexibility. Pricing of annuities may be a challenge when the bond market is itself underdeveloped. The compromise in many systems is to mandate partial annuitisation requiring that a fraction of the corpus be used to buy an annuity while allowing flexibility for the rest. The other alternative is to design systematic withdrawal plans that allow for gradual withdrawals from the corpus. This doesn't insure against longevity risk, but is often preferred for its simplicity and flexibility.

It is important to emphasise the word funded when outlining the four features. If taxpayer resources are used to finance retirement, features such as guaranteed returns can be built in. However, such arrangements are often vulnerable to funding pressures over time. If the system is to remain self-sustaining, the investment risk must rest with the individual unless that risk is explicitly priced and paid for.

Pensions in India

The central question for any government, then, is how to achieve these four features. Let's consider how the EPF, NPS fare on these parameters, especially relative to a mutual fund that is not a pensions product.

Feature	Mutual fund	EPF	NPS
Mandatory	No	Yes (for formal sector)	Somewhat
Illiquidity	No	Cannot withdraw 25% of corpus	Yes
Low cost	No	Somewhat	Yes
Retirement income	No	No	Yes

A mutual fund is not mandatory, or illiquid, or low cost. It makes no promises of a retirement income. These features are not expected from a mutual fund, as it is not a pensions product.

EPF

The Employees Provident Fund (EPF) functions effectively on the issue of mandatory contributions, as it is meant for formal sector workers, where employment is defined and contributions are linked to payroll. However, its contribution rate, around 24%, is high, making it burdensome, particularly for low-income workers. Early withdrawals from the EPF have been a persistent concern. The EPFO has recently restricted withdrawals to 75% of the corpus (and hence 25% of the corpus is illiquid till retirement), which is an improvement, but still undermines the purpose of a pension product. The EPFO needs to consider a calibration of the contribution rates. The administrative costs, borne implicitly through an employer levy of about 0.5% of wages, make it relatively expensive. Moreover, it offers no choice in investments and provides a guaranteed rate of return, which limits both flexibility and upside potential. Finally, by paying out a lump sum at retirement, the EPF exposes individuals to longevity risk. From a pension design perspective, the EPF would benefit from reforms across all four foundational elements of a pension system.

NPS

The National Pension System (NPS) did not encounter challenges of coverage when participation was mandatory for government employees. The total AUM of NPS in September 2025 was about US$178 billion (Rs. 15.8 lakh crore), of which 85% was with the three public sector fund managers (SBI Pension Funds Pvt Ltd, LIC Pension Fund Ltd, UTI Retirement Solutions Ltd). The Pension Fund Regulatory and Development Agendy (PFRDA) has capped investment management fees for all pension fund managers, which continue to be some of the lowest in the world (between 3bps - 9bps). As the total corpus grows these may further come down. The NPS permits equity exposure but limits international investments, thereby constraining diversification opportunities. The scheme allows only three partial withdrawals during the entire subscription period and limits the amount that can be withdrawn. It would do well to reserve these safeguards, which reinforce the principle of lliquidity that underpins any pension scheme. It requires artial annuitisation at retirement and offers a systematic ithdrawal plan, with ongoing efforts to design additional tructures that can strengthen income security in old age. These are steps in the right direction.

Despite these advantages, the transition to the Unified Pension Scheme (UPS) has brought forth a fundamental challenge for the NPS: building a base of contributors for whom saving is compulsory. The natural tendency will be to compete in the market for voluntary savings. More recently, under the Multiple Scheme Framework (MSF) fund managers are permitted to design and offer multiple schemes tailored for different subscriber segments. While this will allow more choice for subscribers, it runs the risk of diluting what makes the NPS a pension product. A mature mutual fund industry already caters to voluntary investors, and an excessive focus on marketing voluntary contributions risks undermining the NPS's defining advantage - its low-cost, low investment options structure.

Conclusion

Retirement schemes, whether the EPF or the NPS, are only one component of an individual's broader savings portfolio. Yet, for the portion that is locked into a dedicated pension scheme, fidelity to the four core design principles is crucial. This is especially important as both schemes, and particularly the NPS, consider various reforms related to the design of different schemes, valuation models and withdrawal options. The focus of a pension system should remain on expanding wholesale participation through large-scale group subscriptions, rather than competing directly in the retail savings market.

The author is a researcher at TrustBridge Rule of Law Foundation.

Announcements

Researcher Position in Policy oriented Research

Policy oriented research: we build knowledge on the working of government and how improvements can be made, and carry the knowledge through into connections into the real world reform process. We stand on the modern understanding of the Indian state and the difficulties of the Indian development journey, that fuses public economics, law and public administration, as seen in the ISOTR book. The X in XKDR Forum stands for Inter-disciplinary: we integrate diverse strands of knowledge into innovating on the question at hand. Of particular importance are the fields of public finance, legal system reform, household finance, and climate change. Our thinking in each of these fields takes from and feeds into the big picture of Indian development strategy.

We are looking for someone with interest and experience in regulation of global finance and cross-border flows.

The right person for this role will hold an undergraduate degree in Law such as B.A.L.L.B. (Hons.) / B.B.A.L.L.B. or graduate degree in Law such as an L.L.B. Familiarity with FEMA, banking laws and regulations, and corporate law is a plus. Of great importance is collaboration with the quantitative researchers in XKDR Forum.

Please look us up at: website, youtube channel, open source releases, annual conference, newsletter on substack.

The remuneration offered will be commensurate with your skill and experience and will be comparable with what is found in the Indian research ecosystem.

Interested candidates must email their resume with the subject line: Application for "Research Associate" at XKDR Forum, to Ms. Shyna Adhiya at careers@xkdr.org by 30th November, 2025.

Electricity cost recovery and the political imagination: A comparison between private and public distribution in India's biggest cities

by Ajay Shah and Susan Thomas.

The problem

The Indian electricity system has major problems. It suffers from a central planning problem, where officials control the resource allocation, which undermines efficiency and innovation. It has a carbon emissions problem, with the lack of an effective path into the clean energy transition. It has a public finance problem, where debt sustainability in some states is materially affected by theft and by subsidies are paid for by the exchequer. As an example, in Mehta et al. 2024, we show that for Tamil Nadu, "A complete electricity sector reform versus business-as-usual translates into an FY 2028 outcome for the debt/GSDP ratio of 32.47% vs. 43.53%, and an IP/RR ratio outcome of 19.71% vs. 26.12%".

A root cause of these difficulties is subsidised and stolen electricity. As there is no free lunch, the lost revenues have to show up as a combination of explicit budgetary allocations for electricity subsidies, or distress for the distribution company. The precise mechanisms through which electricity is stolen are surprisingly subtle, e.g. as shown in Mahadevan 2024, which casts a shadow on conventional measures of AT&C losses. While there is some movement in favour of more transparent on-budget subsidies (Jaitly and Shah 2024) in states such as Karnataka, the overall problem reflects a combination of transparent on-budget subsidies, weak bill collection, and theft.

Figure 1: Feedback loops in the Indian electricity system

Source: Figure 10 (page 15) from Jaitly et al. 2025.

 

As Figure 1 shows, there are multiple positive feedback loops in operation in the Indian electricity system, which are grinding away, worsening the distress. Inadequate payment leads to SEB distress, which in turn forces high tariffs on paying C&I consumers, driving them to exit the grid and further worsening SEB finances. Inadequate payment for electricity, by many firms and households, is the core problem which then plays out in various ways.

The developments in Pakistan in recent years give us illustrations of how such causal forces could play out in the future in India (Economic Times, 2025). Conversely, the imposition of a single price for electricity applied to all buyers of electricity would materially change these feedback loops by alleviating financial distress in electricity distribution.

Household data as a research tool

A significant amount of theft of electricity is surely done by firms, who have high incentive to put in effort to obtain stolen electricity. But the overt political problems of subsidised electricity for households or agriculturists, and the political economy problems of a large number of persons stealing electricity, are uniquely present in the household sector. Household survey data offers valuable knowledge about the problems. Instead of starting from budget disclosures and the data as reported by distribution companies, we go bottom up by asking households what they pay for electricity. There are grounds for trusting the CMIE CPHS measurement of electricity expenditures at the household level (Das et al. 2024).

Figure 11 (page 19) from Jaitly et al. 2025 shows how electricity expenditures in the household data in Tamil Nadu are unusually low by Indian standards. While this appears out of line when we think that Tamil Nadu is richer than the overall Indian average, there is a need for more careful analysis which compares similar households and juxtaposes different arrangements for electricity distribution.

The gains from private distribution

In the present research, we focus on two groups of the biggest Indian cities with alternative electricity distribution arrangements. Bombay, Delhi and Calcutta have private distribution. Bangalore and Madras have public sector distribution. Using the CMIE CPHS data, we work out the median household expenditure on electricity in these two groups of cities. These are large datasets: In 2024, Bangalore and Madras add up to 1,641 households and Bombay, Calcutta and Delhi add up to 2,667 households. Given these large sample sizes, the median estimates are statistically robust. Weighted estimates are used, which can be interpreted as populated-weighting across the cities.

 

Figure 2: Median household electricity expenditure in large cities, private vs. public electricity distribution

Source: Authors' calculations using CMIE CPHS data

Figure 2 shows these facts. This shows much superior cost recovery for households in cities with private distribution. Further, it shows that over the years, the payment per urban household under public sector distribution has actually declined in nominal terms. With private distribution, it has risen. This rise is consistent with increased ownership of electricity-consuming appliances over these three years, by urban households, and the rising price of electricity in the context of overall inflation based on the inflation target of 4%. That expenditures by households under public sector distribution have not risen, in nominal terms over three years, is a remarkable finding.

While we may broadly think that household prosperity in Bombay, Delhi and Calcutta is similar to that seen in Bangalore and Madras, we control for this by placing households into nationwide urban consumption quartiles.

Quartile	Median Cons.	Median electricity (private)	Median electricity (public)
	(monthly)	(monthly spend)	(monthly spend)
Q1 (poor)	10,536	500	0
Q2	14,755	665	0
Q3	19,307	775	0
Q4 (rich)	29,522	1500	75

The quartiles are formed based on the all-India distribution of urban household consumption as seen in the CMIE CPHS data in 2024. The all-India median urban consumption runs from Rs.10,536 a month for the poorest quartile to Rs.29,522 a month for the richest quartile. With this in hand, all the urban households in Bombay, Delhi, Calcutta and then Bangalore and Madras are placed into the appropriate quartile bins. Since the bins are based on all-India urban consumption, households in each group (private distribution/public distribution) will not be equally split across the quartile bins. As we are studying the biggest cities in India, more households are likely to be slotted in higher consumption bins. We report the median value of the monthly electricity expenditure for the two groups.

These results show that after controlling for affluence of the households, public sector distribution obtains much lower payments for electricity when compared with private sector distribution. In the future, this work needs to be made statistically more rigorous by setting up a matching scheme where households in Bangalore/Madras are matched to households in Bombay/Delhi/Calcutta based on asset ownership. However, the magnitude of the difference suggests the core finding is robust.

The political economy of the Indian electricity sector

These results shed light upon questions of political economy. Politicians in states like Karnataka or Tamil Nadu are used to thinking that it is difficult to force households to pay for electricity. Politicians in Delhi, Maharashtra and West Bengal have successfully squared this circle: they are able to impose much higher expenditures upon urban households, with the consequential gains for the health of the electricity system and for state public finance.

The most striking finding here is the table organised by consumption quartiles. Why do top quartile households of one group pay Rs.1500 a month for electricity while the same kinds of households of the other group pay Rs.75? This table helps expand the political imagination across the country: What are the politicians of Maharashtra, Delhi and West Bengal getting right, that others are not? There should be a strong demonstration effect here: How are politicians in Maharashtra, Delhi and West Bengal doing the right thing and politically surviving? What is the political settlement in these states that has enabled their superior durable arrangement?

A striking feature of these results lies in the fact that Delhi, which is pooled with Bombay and Calcutta in this work, actually has a large on-budget electricity subsidy program. Even though Delhi has a big subsidy program going, we have a strong result where the group of cities with private distribution includes Delhi. This suggests that private distribution adds value even under a large on-budget subsidy. This brings a new nuance to the debates around the gains from a transparent on-budget subsidy (Jaitly and Shah, 2024). Private distribution, which brings gains in collection and theft reduction, seems to matter over and above the standard public finance gains from a transparent on-budget subsidy.

Conclusion

These results reflect a summary statistic of the working of the electricity system in the two groups of cities, bringing together all aspects that impact household payments for electricity, including overt subsidies, various mechanisms of theft, and the efficiency of bill collection. Future research is required on the sources of improvement through private distribution. Is it better metering and billing technology? A regulatory framework that insulates tariff-setting from short-term politics? Better enforcement against theft?

Section 9.7 of Jaitly et al. 2025 shows the elements of information that go into monitoring the electricity reform at the level of one state of India. The analysis presented here carries this objective one step forward.

This article emphasises the comparison between five cities and not states. Potentially, there can be a divide-and-conquer approach where urban distribution reforms are separated out from the remainder of the state. Once a successful distribution company is established, its footprint can be gradually enhanced, e.g. there is a ready path for the successful private distribution model in Bombay to cover the full footprint of the Mumbai Metropolitan Region (MMR).

Jaitly and Shah, 2021, emphasise that the path to the Indian climate transition runs through the problems of the electricity sector. The political economy of electricity subsidies and theft is a key problem holding back the electricity sector. The empirical political economy results here help illuminate the questions and show pathways to progress.

Such natural experiments, with different parts of the country trying different things, represent the gains that come for the electricity system from the Constitutional scheme where electricity was largely made a state subject. When only one solution is used all through the country, there is reduced experimentation and inferior knowledge. There is much merit in the subsidiarity principle: problems should be placed at the lowest level of the government where they can possibly be placed (Shah and Varma, 2024).

Bibliography

The Price of Power: Costs of Political Corruption in Indian Electricity, Meera Mahadevan, American Economic Review vol. 114, no. 10, October 2024 (pp. 3314–44).

The usefulness of the CMIE household survey data for electricity research in India, Susan Das, Renuka Sane and Ajay Shah, The Leap Blog, 8 May 2024.

Pakistan's quiet solar rush puts pressure on national grid, Economic Times, 16 July 2025.

The lowest hanging fruit on the coconut tree: India’s climate transition through the price system in the power sector, Akshay Jaitly, Ajay Shah, XKDR Forum Working Paper 9, October 2021.

Electricity subsidies are getting better, Akshay Jaitly and Ajay Shah, Business Standard, 26 May 2024.

Electricity reforms in the economic strategy of Tamil Nadu, Akshay Jaitly, Renuka Sane, Ajay Shah, XKDR Forum Working Paper 38, February 2025.

The electricity chokepoint in Tamil Nadu public finance, Charmi Mehta, Radhika Pandey, Renuka Sane, Ajay Shah, XKDR Forum Working Paper 31, February 2024.

India needs decentralisation, Episode 47 of Everything is everything, 17 May 2024.

Announcements

10 Years of the IBC: Conference

07^th - 08^th November, 2025

In 2026, it will be ten years since the Indian Insolvency and Bankruptcy Code (the IBC) was enacted. This milestone offers an opportunity to reflect on what the law has achieved - what was envisioned at its inception, and where we stand today.

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