Free power drawing to a close in India

Friday, 25 October 2002, 07:00 Hrs
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NEW DELHI: The days of free electricity seem to be drawing to a close in India, with depleting resources and a crippling power industry pushing states to undertake bold reforms.

Today India generates 105,056 MW of electricity. But as a result of poor metering, thefts and free electricity, only 55 percent of it is metered and 41 percent dues realized, according to power ministry sources.

Of the three states providing free power to farmers, Punjab last week decided to roll back the facility given in 1997. The state was providing around 7,000 million units free to farmers annually.

Madhya Pradesh too has brought 1.65 million farmers under the tariff net, leaving out only 50,000 poor, tribal consumers.

Tamil Nadu, which provides nearly 10 billion units of electricity free to farmers, is expected to stop the facility within a month. The state electricity board has approached the power regulatory body to clear a tariff levy.

While the charges may be nominal, it is nonetheless a start, feel experts.

"In the last five to six months, several initiatives have been taken by states to turn around the power sector under the Accelerated Power Development Reform Programme (APDRP), creating a good impact," power secretary R.V. Shahi said.

Under the incentive based APDRP, New Delhi has sanctioned projects worth 70 billion to enable states to push ahead reform projects, including metering and reducing transmission and distribution losses.

So far 15 states have signed up for power reforms that aim, among other things, at reducing power losses by four percent annually.

Welcome changes are evident -- West Bengal has brought in anti-theft legislation in July and arrested 800 people for pilfering electricity.

Andhra Pradesh and Karnataka have enacted anti-theft rules, while Madhya Pradesh has gone further by setting up a special police cell to tackle power thefts.

Punjab and Uttar Pradesh too are in the process of drafting an ordinance to stop power thefts.

Business bodies like the Confederation of Indian Industry (CII) have long advocated rational user charges from all consumer segments as India continues to grapple with a widening gap between power demand and supply.

India's current generation capacity is around 12 percent, or 12,582 MW, short of peak load needs.

"Political interference in the operational autonomy of state electricity boards (SEBs), lopsided tariff structure -- with high tariffs for industrial segments cross-subsiding domestic and agricultural segments, a high level of transmission and distribution losses and lack of subsidy payments from state governments are some key issues that have led to the financial fall of vertically integrated SEBs," states CII.

V. Raghuraman, energy advisor in CII, said: "A study on power supply has clearly indicated that consumers across all segments give more importance to access to electricity and availability of uninterrupted supply than to the price of power."

The study covered over 3,200 respondents across 15 states.

While most states are still charging rural consumers just a nominal tariff of less than Re.1 per unit, industries have to cough up anywhere between 3 and 6 per unit as against the average of 2.50 per unit or even lower in most countries including China.

Said Ravi Wig, convenor of the industry cell of the Bharatiya Janata Party, "With the global market opening up, cross subsidization by overcharging industry is no longer possible if the sector is to be competitive."

Source: IANS
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