Day 1 in power, Cong switches off reforms

This has also raised serious questions over the future of several World Bank-funded programmes in the state meant to restructure the power sector and institutionalise reforms.

Compare the Andhra farmers’ power bill to that of farmers in other Congress-ruled states and you will realise that Naidu wasn’t that harsh to his farmers on this count, at least.

• Andhra, under Naidu, charged a mere 30 paise per unit of power for agriculture.

• Karnataka, under S M Krishna, has an agri power tariff of 40 paise per unit

• In Punjab, under Amarinder Singh, it’s 57 paise

• Highest is 90 paise in Congress-ruled Maharashtra

• 60 paise in UP where a Congress-supported government is in power.

Power in Andhra costs Rs 3.20 per unit of which less than 10 per cent or a mere 30 paise is paid for by farmers while the rest comes either through cross-subsidy with commercial and industrial power supply and direct subsidy from the state government. Now Reddy plans to waive this charge as well.

What’s more surprising is the fact that this comes after the Congress promised free power during elections in Punjab and then had to levy a tariff of almost 60 paise per unit because the state exchequer was bankrupt. Andhra seems to be repeating the mistake.

Earlier this year, the Andhra Pradesh State Electricity Regulatory Commission (SERC) said that at 11,350 million units of power consumed by the agriculture sector, the subsidy bill for the state would be Rs 664 crore. Last year, the agriculture consumption was 12,400 million units taking the annual bill for free power to farmers in excess of Rs 700 crore.

When contacted, Jairam Ramesh, secretary Congress’s Economic Cell said: ‘‘It is a commitment of the Congress manifesto in Andhra Pradesh and that is why it will be fulfilled. It is our duty to alleviate the distress of the farmers and free power is one such measure.’’ When asked how free power would alleviate the distress and whether this squared with the party’s policy, Ramesh said: ‘‘Farmers’ welfare is also our duty.’’

He should ask his potential ally, the Left. Speaking to The Indian Express from Kolkata, CPI(M) leader Somnath Chatterjee said: ‘‘It all depends on the government’s ability to raise resources for such free power. Populism is not the answer to solve such problems.’’

Central Electricity Regulatory Commission chief A K Basu said that while he had heard about this announcement ‘‘it is too early to comment.’’ Let the government be formed, he said, ‘‘and let us wait for decisions before we comment on them. In any case, power tariff is on the Concurrent List and there is very little the Centre can do in this respect.’’

Says Savita Mahajan, Assistant Dean, Indian School of Business, Hyderabad: ‘‘Industry does foresee a problem if the next government takes subsidies too far. The free power being offered to farmers, for instance, is worrisome. Because ultimately, where will the money come from? It should not end up in compromises on the infrastructure front, which is really the core issue.’’