Madhya Pradesh power sector reforms have been reached from where further progress appears challenging due to the following major Problems; the slow rate of addition to power generating capacity; the lack of noticeable improvement in the governance, management and level of service to consumers; the failure of efforts to induct the private sector into the distribution; the inability to find a solution to the problem of subsidized supply of power to agriculturists; the chaotic condition of governance of LT distribution with inter alia , the level of T & D losses remaining undetermined and annual loss reduction being very slow and deficits accumulated over the yeas imposing an unbearable interest burden limiting the capacity to raise fund in commercial market. For the development of any economy, power sector plays a vital and pivotal role. A secure and predictable electricity supply can enable any country to fulfill its social and economic objectives. Rationalized tariffs can overcome the deficit problem and improve the financial health of State Electricity Boards / Electricity Utilities. An improved financial health of power sector can also ensure improved conditions for schools, hospitals, and other social services. Power sector reforms can change the situation of agricultural, industrial and infrastructural development. Development of power sector requires huge financial resources. Rationalization of tariffs and Consumer satisfaction through dispute settlement panel of MPERC also reduce the problem of electricity theft and influence them for proper utilization of power. the problem of electricity theft and influence them for proper utilization of power. The study will also analyze the situation of public private partner ship in the generation, transmission and distribution of power in MP after implementation of power sector reforms .which will help to the Government, State Electricity Boards / Electricity Utilities to generate finance for the power sector development.