Power Strug­gle

En­sur­ing elec­tric­ity ac­cess to all house­holds is a great po­lit­i­cal move but might de­rail the fis­cal re­forms un­der­taken by Dis­coms.

Business Today - - CONTENTS - BY ANILESH S. MA­HA­JAN @anileshma­ha­jan

En­sur­ing elec­tric­ity ac­cess to all house­holds is a po­lit­i­cal move, but might de­rail the fis­cal re­forms un­der­taken by Dis­coms

Over the next 14 months, the gov­ern­ment wants to il­lu­mi­nate ev­ery home in In­dia – that’s a stag­ger­ing 4,05,11,995 house­holds. The move, how­ever, might just end up plung­ing into dark­ness power dis­tri­bu­tion com­pa­nies, or Dis­coms, al­ready strug­gling to im­ple­ment fis­cal re­forms un­der the Ujwal Dis­com As­sur­ance Yo­jana ( UDAY).

The am­bi­tious Saub­hagya (Prad­han Mantri Sa­haj Bi­jli Ghar Yo­jana), which Prime Min­is­ter Naren­dra Modi an­nounced on Septem­ber 25, is po­lit­i­cally sound, but for dis­tri­bu­tion com­pa­nies, sheer lo­gis­tics make it vir­tu­ally im­pos­si­ble to fin­ish the task in the given time- frame.

There are sev­eral rea­sons for this. Nearly 95 per cent of these homes are in ru­ral or re­mote ar­eas and get sub­sidised elec­tric­ity. Dis­coms bal­ance their losses on these sub­si­dies with higher tar­iffs for in­dus­trial and com­mer­cial units. As­sum­ing eight hours of power (one KV load) in each new elec­tri­fied house, the ad­di­tional de­mand would be 80,000 mil­lion units each year, ne­ces­si­tat­ing the cre­ation of ad­di­tional ca­pac­ity of 28 Megawatts. To even out the ex­pected rev­enue loss, In­dia would re­quire com­mer­cial and in­dus­trial units to con­sume at least 55,000 mil­lion ad­di­tional units in the next 14 months, an un­likely sce­nario.

The av­er­age rate of elec­tri­fi­ca­tion at present is 9,288 house­holds per day. To en­sure that the gov­ern­ment’s com­mit­ment is met, Dis­coms would need to elec­trify at least 87,311 homes daily. This means Dis­com em­ploy­ees across the coun­try would have to work at ten times their cur­rent speed, con­tin­u­ously, for the next 425 days, with no break. An un­re­al­is­tic ex­pec­ta­tion, by any stan­dards, though ex­perts in­sist it can be done. Of the 18,452 vil­lages where there was no power, elec­tric­ity has al­ready reached 14,486 in the last 13 months.

Power min­istry of­fi­cials say, in the re­main­ing 3,966 vil­lages, elec­tri­fi­ca­tion would be rel­a­tively eas­ier be­cause only end-point con­nec­tiv­ity is needed. “Some fam­i­lies were liv­ing tech­ni­cally out­side the vil­lage perime­ter, some did not have BPL ( Be­low Poverty Line) cards, and some did not have the know-how to ap­ply for an elec­tric­ity con­nec­tion. The ad­di­tional funds pushed in by the gov­ern­ment – `4,000 crore as special mid-fis­cal sup­ple­men­tary gross bud­getary sup­port will help speed up last-mile con­nec­tiv­ity to such house­holds,” an of­fi­cial spokesper­son said.

That, how­ever, is eas­ier said than done. Dis­coms would be now un­der im­mense pres­sure to pro­vide elec­tri­fi­ca­tion to “low-pay­ing cus­tomers” – free con­nec­tions for BPL and in 10 EMIs for above poverty line fam­i­lies. Bud­getary sup­port only pays for in­fra­struc­ture cre­ation and the free con­nec­tions.

Even sup­ply­ing elec­tric­ity to these ad­di­tional homes will be a night­mare for the dis­tri­bu­tion com­pa­nies. The orig­i­nal blue­print for elec­tri­fi­ca­tion was that all vil­lages would be elec­tri­fied by May 2018. Elec­tri­fi­ca­tion of in­di­vid­ual house­holds would have then com­menced, on a premise of bet­ter in­fra­struc­ture. At this junc­ture, most states haven’t been able to meet even their com­mit­ments to re­duce losses.~

To even out the ex­pected rev­enue loss, In­dia would re­quire com­mer­cial and in­dus­trial units to con­sume at least 55,000 mn ad­di­tional units in the next 14 months, an un­likely sce­nario

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