In the few villages I visited recently, complaints on the power situation were more vociferous than usual. These were admittedly in western India, chronically short of power — and in the case of western Maharashtra it includes areas facing another “drought”. This hurts more because the rest of the country is enjoying the results of a good monsoon. Now that the assembly elections are over, it may be a good time to talk about this problem, in the hope of at least taking some steps towards a solution.In spite of all the hoopla, the electricity situation in the country as a whole is really bad. As is the case, villages get the worse end of the stick. Apart from the consequences of actions of “reformers” without a strategy, there is just the simple fact that the lack of an effective policy is now showing up in real shortages.In advertisements, the authorities claim good performance. But growth in electricity generation was 3.9 per cent in 2000-01, 3.1 per cent in 2001-02, 3.5 per cent in 2002-03 and is 2 per cent this year — while demand is rising at around 7 per cent annually. As power minister in 1996/98, I found that a 7 per cent growth rate soon turns power shortages to surpluses, even though we maintain the fiction that demand rises by 10 per cent. Rural areas don’t get adequate power even when it is available, but they are much worse off when it is not. In the few 11 kva lowest level distribution stations I went to in villages from September onwards, while records were as usual in bad shape, conversation suggested that periods when power could not be routed to the village even when availability had gone down from around a fifth to a quarter of the time to less than a sixth, the availability of power in the lowest level feeders has gone down. As compared to the mid-nineties, when generation targets were discussed all the time, no one talks of the targets on a monthly, quarterly or annual basis any more. We are of course promised manna from heaven three years from now.Will the new Electricity Act make a difference? In the long run it must, for otherwise the future is literally dark. But in essence it puts at one place a lot of what we have been saying and had legislated since the mid-nineties. If we don’t cover the last mile we will have the satisfaction of saying that the law of the land is being violated, but very little else will happen. And as both Sheila Dikshit and Chandrababu Naidu have shown, good power policies are not bad politics. The villain of the piece is always stated as agriculture. That is a partial truth. Electricity boards have a nasty habit of showing all unmetered power as ‘‘agricultural’’ load and many studies have shown that up to half of this can be pilferage elsewhere — but it is a fact that at present the farmer is not willing to pay for the irregular and poor quality power that he gets.So what do we do? Two interesting ideas are worth considering. The first is to improve the quality and reliability of power, and to charge the market price for this segment of supply. In fact, ask the private sector to work this out at the lowest level. When I suggested this first, it was abused as ‘‘islanding reform’’. My reply was that a thousand islands working could finally destroy the present system. As Mao said, if you can’t fight them, surround them. When he was chief minister, the present vice president started the tatkal scheme where if you pay you get a pump connection, and he had queues of thousands of farmers wanting to pay. The scheme has been flatteringly replicated. But the state is not able to deliver and it will not allow the private sector to step in. So it doesn’t work.The second is from Sebastian Morris, the IIM professor who writes the Infrastructure Report. He says give every farmer the subsidy you give as a coupon and let him buy power in the market. The user will then push the reform. If we don’t reform the lowest level, nothing is going to happen and now we will have the legal excuse for non-performance.This kind of reform will need a proactive regulator. Unfortunately the regulators are now mainly retired bureaucrats who don’t even understand the problem, leave alone how to begin solving it. Many, it is reported, are there for past favours done. The carefully worked out attempts at bringing in professionals in the original legislation placed in Parliament were deleted. No one of course is really talking of the long run in a meaningful way. In western India where the cheapest energy can come from pithead power stations in the eastern coal belt, the large projects are languishing as fly by night operators make money from import contracts. The public/private initiatives required are just not started, since the incentives are not there. Reforms without a strategy don’t go far.
