Subsidies in electricity tariffs in India are currently designed in a way such that industrial and commercial sectors pay higher rates to finance subsidies given to the residential and agricultural sectors. These cross sector subsidies have led to wastage, contributing to severe shortages in the electricity sector. This study provides a critique for the existing pricing policy and suggests suitable alternatives to ensure efficient allocation as well as equitable distribution of the countrys energy resources. Results obtained from sector-wise estimation of elasticity of demand for electricity...