The Indian power sector is presently going through a process of reform and restructuring, Independent regulatory commissions are being set up, and vertically integrated utilities are being unbundled into corporate entities. Efforts are also being made to facilitate competition wherever feasible, and the choice of an appropriate power market model assumes significance in this context. The recent reforms in the Indian power sector have exemplified changes in the players' role for providing policy directions, regulating, and running the sector for over 50 years. New institutional entities are being established in the power sector, and a healthy relationship between these institutions is presumed crucial to ensure a sustained development of the sector and to realize the reform goals. A three-phase, nine-step action plan for reform encourages an integrated national grid; tariff setting, DSM options, energy conservation, and T&D loss reduction as possible strategies to overcome the problem of power deficit.