Political uncertainty weighing heavy on the minds of the ruling Congress and NCP appears to be behind the shortsighted populist measure of declaring a 20 per cent reduction in power tariff across sectors in the state. Whether it is NCP president Sharad Pawar or Chief Minister Prithviraj Chavan, or Sanjay Nirupam, who has just ended his fast after being assured an audit of power discoms in Mumbai — a la the Aam Aadmi Party government in Delhi — economic feasibility has been sacrificed for politics. Forgotten is the fact that in 2004, then chief minister and now Union Home Minister Sushil Kumar Shinde had promised free power as part of his manifesto, only to junk it following the polls.
The argument given is that financial implications are secondary as the ruling coalition is fighting a battle for political survival. The Shiv Sena-BJP as well as a resurgent AAP are snapping at its heels in Maharashtra. The report by a committee led by Industries Minister Narayan Rane has suggested concessions for just 10 months, between January and October 2014, which would cover both the Lok Sabha and assembly elections in the state. The resultant financial burden, of Rs 7,200 crore, the committee believes, can be met by borrowing Rs 15,000 to Rs 20,000 crore more in the poll year. Apparently, that is just a drop in the ocean as the state is already reeling under a debt of Rs 2.81 lakh crore.
Given that Maharashtra still has maintained its financial discipline despite this, the concession in power tariff, it can be assumed, is no more than public posturing for the polls.
It was tariff paid by the industry in the state that was actually a matter of concern. However, any such concession to it, without a corresponding offer to the domestic and agriclture sectors, may not have gone down well in an election year.
The industry pays Rs 9 to 11 per unit for electricity, already effectively cross-subsidising the agriculture and domestic sectors. This puts Maharashtra in an unfair position to draw industry compared to neighbouring states such as Chhattisgarh, Gujarat, Madhya Paradesh, Orissa, where the electricity rates are Rs 5 to 6 per unit.
Availing 45 per cent power, industry generates 51 per cent revenue for the state. Agriculture consumes 25 per cent and accounts for 11 per cent revenue. However, the numbers that matter right now are not this.
Shubhangi is a senior editor based in Mumbai
