When it comes to electricity, more than just a basic utility service, the Kerala State Electricity Board is an ideal example of a monopoly business. In Kerala, there are no private power supplies and this will not be allowed to change any time soon.
The Kerala State Electricity Board (KSEB) is a monopoly business in Kerala. The state’s only electricity distributor, it enjoys a virtual monopoly on the retail market. The utility is also in charge of enhancing and preserving the state’s electrical grid. Though it has a stranglehold on the market, it has fallen short of customers’ expectations. In 2016, KSEB was ranked as one of the worst state electricity boards in India.
Due to poor grid connectivity, Kerala has been without alternate power supplies for over years. This problem was caused by inadequate investment by KSEB in the maintenance of its power infrastructure. In March 2017, KSEB was the first state-owned company to be banned from doing business by the central government for not following rules.
It has been accused of favouring certain companies and not allowing others to enter the power market. In turn, this has led to fewer competitors and higher pricing for consumers.
In 2016, KSEB generated Rs 1,747 crore from electricity sales but spent only Rs 1,158 crore on maintenance and improvement of its network. This resulted in a loss of Rs 548 crore for the board.
Why Is the Kerala State Electricity Board a Monopoly Business?
Ever since it was formed in 1956, the KSEB has been a monopoly business. This is because the state government owns all of the company’s shares and therefore controls it. The government has used this control to fund large state-owned enterprises, such as the KSEB, at the expense of private businesses.
It also earns high profits, which it uses to fund government projects unrelated to electricity. In addition, the KSEB has been accused of corruption and mismanagement. If the state government were to allow private companies to compete with the KSEB, consumers would likely benefit from lower prices and better service quality.
How can a monopoly business be successful?
Electricity is a necessity in our daily lives, and it is only natural that we would want to have control of this essential service. However, the electricity board (EB) in Kerala is a monopoly business, and as such, it has been able to become very successful.
This article will discuss why the EB is able to be so successful and how you can create a monopoly of your own. At first, it was only responsible for distributing electricity within the state, but over time it has become a much more complex organization. It also provides technical support to other state-owned electricity companies.
This includes the generation of electricity, the transmission of electricity across state borders and the distribution of electricity to consumers. As a result, the EB has been able to charge high prices for electricity, which has allowed it to become one of the most profitable state-owned businesses in India.
What are the Pros of Being a Monopoly Business?
There are many pros to being a monopoly business. The most obvious pro is that monopoly businesses can charge higher prices than their competition and still make a profit. This is because they have the power to set their own prices, which allows them to make more money in the long run. Additionally, monopolies can dictate what products or services they will provide, which gives them a lot of control over what consumers can buy.
What are the Cons of Being a Monopoly Business?
The monopoly may be less likely to invest in new technology or product lines, which could lead to obsolescence and stagnation of the business. Finally, a monopoly may be less likely to innovate, which could result in lost market share and earnings.
How has the KSEB managed to avoid competition?
Since the Electricity Board was formed in 1956, it has managed to avoid competition by controlling the electricity market. In 2002, the KSEB was given exclusive rights to distribute electricity in the state, which gave it a monopoly over the market. This monopoly has allowed the KSEB to increase its prices without any competition.
It has also been accused of violating anti-monopoly laws by colluding with private generators. If the KSEB is not reformed, it will continue to control the electricity market and charge high prices without any competition.