How to reform UP’S troubled power sector
difficult, the goal may be reached soon thereafter. The BJP has drawn up a ‘24X7 Power For All’ plan for Uttar Pradesh, which promises twenty-four hours electricity supply to all rural and urban domestic and industry consumers from late 2018. Currently, rural areas receive around 18 hours supply. This in itself represents a notable improvement above the supply situation of recent years. Towards reforming the financial performance of the state’s discom, the BJP is also acting on various fronts. They have built upon programmes started by the previous Sp-government to extend metering, improve billing and revenue collection, and to cut down on theft. The BJP has expended significant political capital by pushing through substantial increases in electricity tariffs for domestic and agricultural users, helping to bring down the gap between cost of supply and revenue collected. However, losses at the state’s discoms remain high. With elections due in 2019, the BJP may find it politically unpalatable to take further steps to raise tariffs and cut down on losses in the coming year.
Electoral support has, for decades, been mobilised on the promise of cheap or free electricity in UP. In the 1970s and 1980s, cheap electricity was promised to farmers. In the 2000s, it was the weavers who were wooed with subsidised power. Losses are typically significantly higher in VIP districts.
A window of opportunity to change the status quo is open in Uttar Pradesh. If the BJP can deliver on reliable access for all — and link success on this front to public acceptance of regular tariff increases and timely bill payment— then the seeds of transformation in the power sector may be sown.
When the BJP last ruled in both Lucknow and New Delhi, between 1997 and 2002, they pushed through extensive structural reforms of the power sector, against significant opposition. However, shortly after doing so, they back-tracked on tariff increases, required by the state’s discoms to support a financial turn-around, fearing upcoming electoral defeat. It remains to be seen whether a story of bold ambitions from the BJP giving way to electoral pressures is repeated this time around.