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for future requirements should be through a transparent competitive bidding mechanismthat follows process as per the guidelines issued by the Union Government. Thecompetitive bidding mechanism allows for the bidder to bid on a competitive returnbasis and the process is transparent and time-bound. All new public sector projectswill have to take the competitive bidding route.In general, State Regulatory Commissions have been hesitant to increase tariffs, withsome states going without tariff hikes for up to 7-8 years (Figure 3-32). T&D losseshave decreased over the last six years but still are more than 25 per cent, with onlyAndhra Pradesh, Punjab, Gujarat and Tamil Nadu achieving losses less than 20 percent. Bihar, Jharkhand, Orissa and Madhya Pradesh utilities have T&D losses of morethan 40 per cent (Figure 3-33).Figure 3-32: Average retail tariff in selected Indian statesAverage unit price (Rs)5.004.003.00MaharashtraRajasthanGujaratTamil NaduKarnatakaAndhra Pradesh2.002006-20072007-2008 2008-2009 2009-2010 2010-2011Financial yearsFigure 3-33: T&D losses in selected Indian states (2004-2009)35Loss (per cent)3025202004 2005 2006 2007 2008 2009YearsThe financial health of most state utilities is deteriorating. At the end of 2009-10, all thestate utilities together registered a loss of Rs 820 billion (Table 3-13). The five states of124