Gujarat walks the tightrope

But the government has no choice but to tread carefully, largely because power sector reforms are long overdue in Gujarat, as elsewhere in the country. In 2002-03 alone, the Gujarat Electricity Board (GEB) lost Rs 2,722 crore, through subsidy and high transmission and distribution losses (read power theft).

The Gujarat Electricity Regulatory Commission (GERC), in fact, recommended reform way back in October 2000. Besides gradual corporatisation and eventual privatisation of the GEB, the reforms aim at reducing subsidies by pricing power for farmers at Rs 1,764 per HP per year under a slab system, which would eventually make way for metered supply.

Though the Asian Development Bank committed $350 million to the project, the government succumbed to the various pulls and pressures — including the earthquake, recurrent drought etc, all of which had special significance for the farm sector — and tapped only $50 million before the programme ended in 2002. Though the deal has been renewed, the bank has not released the second tranche.

In the meantime though, the state has undertaken a widespread crackdown on power theft; incidence is now 28 per cent, down from 33 per cent. Industry, which consumes 28 per cent of the power generated, pays among the highest rates in the country; domestic consumers, too, receive hefty power bills.

The farm sector, which consumes 40 per cent of the power generated, in contrast, paid Rs 500 per HP per year till the tariff was hiked to Rs 1,260 per HP per year last month. Since it is still below the GERC recommendation, the government has to bear a subsidy burden of Rs 1,368 crore annually. But the authorities have pushed back metering till 2007.

None of this cuts any ice with the Congress, which carries on its campaign regardless of the fact that its governments in Rajasthan, Madhya Pradesh and Maharashtra, post-power sector reforms, charge farmers higher tariffs than in Gujarat, and in Punjab, the Amarinder Singh government has banished the free power introduced by the Akalis.

‘‘Subsidies should continue in Gujarat because power here depends on thermal power stations, not cheap hydel power,’’ says Leader of the Opposition in the state assembly Amarsinh Chaudhary. ‘‘The GEB should also concentrate on checking power theft. Had trasmission and distribution losses been cut by even the nine per cent recommended by the GERC, the GEB would have saved Rs 1500 crore over the past three years.’’

If the Congress has managed to rattle the well-entrenched state government on the issue, the powers-that-be have spent several sleepless nights over the restlessness in the Bharatiya Kisan Sangh. In the initial meetings of the Sangh, several leaders from central and north Gujarat threatened to break away and agitate against the government. Of late, though, conciliation seems to be the key word.