Legal Regulations on Public Utility Services In India

“A service in which a tendency to a local monopoly necessitates, the intervention of a public authority to defend the interest of the consumer”: R.G Hawtrey, British Economist

It is said that “Being a social animal, a man can’t live in isolation”. Along with companionship, a human being needs basic facilities to live life. These basic needs are also known as Public Utilities. It includes food, water, clothing, shelter, etc. The government provides these public utilities to the common man.

1. Postal Services
2. Power Facilities
3. Telephonic Services
4. Water Facilities
5. Insurance Service
6. Transport Services

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Public Utility Services (PUSs) have certain essential features that make them recognizable in comparison to other types of business. It serves the consumers in a superior way. The PUSs provides services at low-cost.

The life of an individual is disturbed if they don’t get public utility services. So, there should be consistency, efficiency, and fairness in the supply of services. Government should provide these services at a reasonable rate.

The government invested a lot in the management of PUSs. For example, the Indian Government spends immense money on Railways.

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The Indian Government purchases engines, wagons, and other electricity-related materials that are important to run railways. According to a report, Indian Railways spent 55 paise on every rupee spent in the case of passenger trains.

In Local Area operation, the PUSs agency serves within a particular market area. For example, a water supply system performs in a particular area or town. The water service supply is restricted to that area, providing little scope for market expansion.

To keep away any kind of duplication in regulating utility services, a monopoly position is needed. There is no competition in the supply of vital public utility services.

The state manages and supervises the PSUs’ subjects. As PUSs services are crucial in nature, the Government oversees the policies and their working status in the public interest.

The government gives special power to Public Utility concerns to maintain regular and satisfactory supply. Public utilities are common monopolies. A franchise is a charter that contains authority, power, and immunities. A public utility concern can use public property such as a street when needed. The government gives them power with faith and they shouldn’t misuse these powers.

The affairs of Public Utility is in the hand of the government. The nature of PUSs depends upon the services offered by them. This undertaking assures a continuous supply of services to consumers without any prejudice.

1. Departmental Matter- run by a Department of Central, State, or Local Governments.
2. Public Corporations are formed under a Special Act passed by the legislature.
3. Government Companies booked under The Companies Act 13.

The particular franchise of PUSs is given certain rights. These rights include

• To collect low prices.
• Withdrawing services under recommended conditions after notifying the customers.
• Using the streets and buildings for mending appliances.
• To provide service subject to acceptable rules which ensure quick payment such as reading, investigation, etc.

Also, special franchises are obligated to supply a fair amount of services to all customers at a reasonable price. They serve up to their capacity without any motto of profit. Their duty is to maintain public safety.

The Indian Constitution has a unique structure with the federal government in its constitution. It means that power is divided between Central, State, and Local Governments.

An authorised body acting as a government agency or instrumentality is a ‘State’ as stated in Article 12 of the Indian Constitution.

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There is rarely any risk in conducting Public Utility Service. Since they are organised as a monopoly, there is less competition. There is a lower risk of change in consumer tastes as PUSs supply goods and services necessary for human life.