Project at a glance

  • In Bihar, 45 percent of power consumed is not paid for and is unmetered, unbilled, or pilfered
  • Power distribution companies in collaboration with EPIC-India and other collaborators, launched a group incentive scheme to reward bill payments with improved supply, and to disincentivize non-payment
  • The pilot, which was conducted across eight districts in Bihar, will be scaled up to cover the rest of the state

Why this study

Power sector is widely viewed as one of the biggest constraints on India’s economic growth. Almost half of the power drawn from the grid is not paid for and is unmetered, unbilled, or pilfered. In the Indian state of Bihar, 45 percent of power consumed falls in this category.

Working with the state-owned electricity distribution companies in Bihar, EPIC-India and J-PAL South Asia are testing an innovative group incentive program that links the amount of electricity supplied to groups of industrial and residential consumers to their overall performance in paying for the electricity they consume.


The experimental design of the project targets reducing electricity losses in order to expand power supply. A group incentive scheme was initiated by power distribution companies in Bihar in collaboration with EPIC-India researchers and other collaborators, which rewarded bill payments at the feeder level with improved supply and, similarly, disincentivized non-payment.

The primary objective was to ration better, recognize that non-payment was a collective action problem, and to try to change the social norms about payment, including low-level collusion and collective problems.

The large-scale pilot was conducted across eight districts in Bihar—Bhojpur, Buxar, Patna in South Bihar and Saran, Darbhanga, Siwan, Purnea, and Katihar in North Bihar—impacting over 28 million electricity consumers in the state.


As the proportion of paid electricity increases, the hours of electricity supplied to that community also increases. Both the implementing partners—North and South Bihar Power Distribution Company Limited—have shown strong interest in scaling up the study from the eight districts to the rest of Bihar.

While the work on analyzing data (primary and administrative) from the study continues, the distribution companies have expressed interest in continuing to implement and monitor Revenue-Linked Supply Scheme themselves in study districts. The researchers are assisting them in achieving this.

This project is also supported by Governance Initiative, International Growth Centre, Urban Services Initiative, and Private Enterprise Development in Low-Income Countries.

Background Research –  The Consequences of Treating Electricity as a Right 

Project Partners

North Bihar Power Distribution Company

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NBPDCL is a company registered under the provisions of Companies Act 1956 and is a fully owned subsidiary Company of BSPHCL.

The Company is engaged primarily in the business of distribution of Electricity. It has been vested with the distribution assets, interest in property, rights and liabilities of the erstwhile BSEB necessary for the business of distribution in its area of distribution comprising of all 21 districts of North Bihar (namely 1.West Champaran, 2. East Champaran, 3. Sitamadhi, 4. Sheohar, 5. Muzaffarpur, 6.Vaishali, 7. Saran, 8. Siwan, 9. Gopalgunj, 10. Mahubani, 11. Darbhanaga, 12. Samastipur,13. Begusarai, 14. Khagaria, 15. Saharsa, 16. Supaul, 17. Medhepura, 18. Araria,19. Katihar, 20. Purnea and 21. Kishangunj).

The Company has been given the status of a Distribution licensee as per Section14 of the Electricity Act 2003. In order to fulfill the obligations of the Distribution licensee as mandated under the provision of Bihar State Electricity Reforms Transfer Scheme 2012 and Electricity Act 2003.

South Bihar Power Distribution Company

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South Bihar Power Distribution Company Ltd(SBPDCL) has beengiven the status of a Distribution Licensee as per Section 14 of the ElectricityAct 2003 and engaged primarily in the business of distribution of Electricity andis serving more than 18 lacs consumers in 17 districts of South Bihar. Presently, we are providing uninterrupted power supply in PESU, Area, Patna i.eCapital of Bihar and also providing 18-20 Hrs assured powersupply in the entire17 district HQ of South Bihar.


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The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of the Union Cabinet on January 1, 2015. NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs. While designing strategic and long term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States. The Government of India, in keeping with its reform agenda, constituted the NITI Aayog to replace the Planning Commission instituted in 1950. This was done in order to better serve the needs and aspirations of the people of India. An important evolutionary change from the past, NITI Aayog acts as the quintessential platform of the Government of India to bring States to act together in national interest, and thereby fosters Cooperative Federalism. At the core of NITI Aayog’s creation are two hubs – Team India Hub and the Knowledge and Innovation Hub. The Team India Hub leads the engagement of states with the Central government, while the Knowledge and Innovation Hub builds NITI’s think-tank capabilities. These hubs reflect the two key tasks of the Aayog.

EPIC-India and the National Institution for Transforming India (NITI), the government of India’s premier think tank have signed a Statement of Intent (SoI) to work on issues of electricity sector reform, energy modeling and energy and environmental policy analysis. As NITI AAYOG provides policy inputs across all of India’s ministries, this partnership provides EPIC with an ideal knowledge platform to share and exchange its policy findings. EPIC-India’s projects with NITI AAYOG include an ambitious platform to roll out innovations in electricity distribution reform, arising from research in Bihar, to other parts of the country. Additionally, following the success of NITI AAYOG’s national energy planning tool EPIC-India along with NITI AAYOG is helping three Indian states develop an overarching energy and environment planning tool at a sub-national level.

The Abdul Latif Jameel Poverty Action Lab (J-PAL)

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The Abdul Latif Jameel Poverty Action Lab (J-PAL) was established in 2003 as a research center at MIT’s Department of Economics. Since then, it has built a global network of 113 affiliated professors and regional offices in Africa, Europe, Latin America and the Caribbean, North America, South Asia, and Southeast Asia. J-PAL’s mission is to reduce poverty by ensuring that policy is informed by scientific evidence. It does this by working with governments, non-profits, foundations and other development organizations to conduct rigorous impact evaluations in the field, policy outreach to widely disseminate the lessons from research, and building the capacity of practitioners to generate and use evidence. Over 200 million people have been reached by the scale-up of programs evaluated by J-PAL and found to be effective. Find J-PAL on Twitter, Facebook, LinkedIn, and YouTube.