Power ruts

The last hint of spring has fled the plains,and summer is upon us. Cities are loud with the sounds of summer not the slow buzzing of insects but the drone of air-conditioners and the squeak of fans. And,of course,the muffled groans when the power goes out again. And it isnt just the cities: over-all,the power deficit in the states,particularly in the North,is likely to hit crisis levels. Punjab,for example,might face a peak-hour shortfall of over 20 per cent. And this is more than a minor inconvenience. The shortfall serves as a hurdle for industrial production,with many industrial units scaling back production because of power constraints. According to particularly alarming figures from a study originating at the Associated Chambers of Commerce and Industry of India ASSOCHAM,this might lead to a fall in industrial production in the North and West by 30 per cent in the months of May and June. These figures coming on top of a year in which small- and medium-sized enterprises have been struggling to maintain production following collapsing demand and choked-off credit could prove to be disastrous for Indias hopes of recovery.

Why,so many years into liberalisation,are such severe bottlenecks permitted to exist? Is it,perhaps,a lack of funding? It would be convenient if that were the case,of course; but things arent that simple. A multitude of foreign companies have been interested in joint power sector projects; the World Bank has loaned money directly to the Power Grid Corporation of India to finance its efforts against transmission and distribution losses. PowerGrid itself thinks that 9000 crores of debt can be raised to finance itself,credit crunch or no credit crunch.

So what has been the stumbling-block? In the end,political will and effectiveness. The largest obstacle to streamlining electricity supply remains the middleman in this case,the state electricity boards. These deeply politicised bodies are inherently anti-reform; unsurprisingly,crucial open access provisions of the Electricity Act of 2003,intended to allow producers to sell electricity as directly as possible to end-users,remain incompletely implemented. Though inter-state power trading is picking up steam. And it isnt merely a state problem: the Electricity Act was the brainchild of a committed power minister,Rangarajan Kumaramangalam,pushed through against a potent lobby within and without the NDA. His successors in the UPA have dropped the ball completely. As

India swelters through another summer,there should be clarity about where the blame lies.