Montek flays power reforms

Deputy chairman of the Planning Commission Montek Singh Ahluwalia made no bones about his unhappiness at power reforms. Addressing the Econo...

Deputy chairman of the Planning Commission Montek Singh Ahluwalia made no bones about his unhappiness at power reforms. Addressing the Economic Editors8217; conference, Ahluwalia said he was 8216;8216;not at all satisfied with the power sector reforms8217;8217; in the country.

He added that there was little the Centre could do here. 8216;8216;It8217;s the states that have to get down to the task,8217;8217; Ahluwalia emphasised.

Ahluwalia, who is a key member of the committee on infrastructure headed by Prime Minister Manmohan Singh, did admit that carrying out reforms in the sector had turned out to be 8216;8216;more complex than was expected8217;8217; and that they had 8216;8216;underestimated the complexity of the problem8217;8217; and 8216;8216;there were no easy solutions8217;8217;.

He said over the last 10 years, electricity boards had turned weaker and did not approve of the current trend of consumers moving towards captive power generation. The deputy chairman, who spoke at length on this subject, said that the privatisation experience of Orissa and Delhi was 8216;8216;mixed8217;8217; and was therefore 8216;8216;neutral8217;8217; to the whether states want to go ahead and privatise or would like to retain it under state-control.

In his opinion, what was important was that states carry out distribution reforms and introduce open access a measure that allows consumers choice before the mandated deadline of January 1, 2009, as that would put competitive pressure on the boards to improve performance. He said states should also charge 8216;8216;reasonable wheeling charges for this objective, failing which, the entire objective of introducing open access would be self defeating.8217;8217;

On subsidies, while he was not against payment of subsidies, more often than not these were not properly targetted. While a study estimates SEB losses to be around Rs 28,000 crore, he said a pilot study done for two states by the Planning Commission shows that it could be double this amount.