connections thereby resulting in sub optimal utilization of the network and

Connections thereby resulting in sub optimal

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connections, thereby resulting in sub-optimal utilization of the network and loss of potential revenues. The central fact remains that we cannot expect the residual consumers to take connections with the prevailing connection charges. The problem we need to address is how much to lower and when. Access to some of these services can and should be subsidised for certain category of consumers. A differential access charges policy can be introduced and the subsidy can directly cover the revenue foregone by the service provider. This would atleast bring the system to an efficient level of asset utilization, besides adding to the monthly revenue stream, and all this without any additional cost. To sceptics who doubt the ability of these residual consumers to pay even the monthly tariff charges, my contention is that most of these services are very reasonably priced and are even subsidised for certain categories of consumers. For example, the monthly water tariffs in Vijayawada is Rs 40 for the Below Poverty Line (BPL) households, while it is Rs 80 for the others. All the other utility services - electricity, telephone, cable TV - suffer from this problem. All of them are examples of economically inefficient systems and are provided by both Government and private service providers. It may be appropriate for the governments and private service providers to have a re-look at how access to these civic services can be increased to its optimal level. Further, as we have already seen, eliminating or reducing bariers to access can be a helpful policy tool in even containing pilferage of these services.
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