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Journalism of Courage
It8217;s that time of the year, couple of weeks before the budget, when policy mantras are dusted off and showcased by commentators, only for the government to resolutely ignore them. There8217;s one mantra that simply can8217;t be ignored any more, though: power policy reform. But Saturday8217;s postponement of the chief ministers8217; conference on the subject indicates the government reckons there8217;s still time for inaction. Most likely, the coming state polls partly informed the decision.
It is impractical not to recognise politics as a policy constraint. But it is irresponsible not to recognise that a power crisis can short circuit growth. All kinds of data confirm this. To take one: in December 2005, manufacturing grew at a modest 5.9 per cent, pulled down by the slow growth in electricity generation at 2.9 per cent; overall industrial growth was pulled down to 5 per cent. What these numbers foretell won8217;t be chased away by frenetic activity at power policy fora. Which is to say, reform does not mean another round of discussion on the electricity act, or another planning commission paper on free power, or tax incentives for power projects. Robust reform will have three broad components. First, a comprehensive energy policy that straddles many technologies and sources. The Kirit Parikh report frames these issues quite well 8212; most importantly on how India can trade its potential for huge thermal power generation, with the consequent implications for greenhouse emission norms, for global support and capital for its nuclear power projects. The Manmohan-Bush deal is a key first step in this plan. Coal, of course, will still be a key source. The second reformist project must figure out how to increase the efficiency of coal mining. Small changes in the current Coal India-controlled set up must start, preparing the ground for amending the 1973 nationalisation Act.
