There is still a long way to go, but India has moved from scarcity to surplus power and easily available fuel
ON MARCH 31, WHEN THE DEADLINE for states to opt into the Ujwal DISCOM Assurance Yojana (UDAY) ended, all but four states had chosen to sign up for power minister Piyush Goyal’s plan. UDAY is one of the most sweeping reforms of the electricity sector since 2003, when it was formally opened up to the private sector. The new reform was initiated in September 2015, to clean the books of electricity distribution companies of their cumulative outstanding of more than Rs 4 lakh crore. In the past 18 months, Goyal has ensured that states gradually take these debts onto their own balance sheets, thus freeing up the finances of distribution companies to make good on their commitments to invest in system and service upgrades.
In the past three years, Goyal has had generation capacity ramped up by nearly 87 GW—both by flagging off new projects as well as by debottlenecking stranded ones. He has also ironed out policy, quality and regulatory hurdles in coal production, raising output from 462 to 554 million tonnes. Even so, the poor health of distribution companies stalls his march. Coal India is holding up production and Indian thermal power plants are running at less than 60 per cent capacity. This is visible in the power outages that many parts of the country still face. However, the early results are promising—in 2014, urban India witnessed 16 hours of power cuts on average. Today, that has been reduced to about 6 hours. When it comes to rural power, Goyal is busy—in the past two years, 13,469 villages have been provided with electricity connections; 4,039 more are slated to get connections in the next 18 months.
Along with oil and gas minister Dharmendra Pradhan, Goyal is putting together a plan to increase energy availability and make it affordable. Both ministers face a series of legacy challenges to this push, including corruption, inefficiency and a lack of overall direction. “From the days of scarcity, we are moving towards days of easier availability,” says Pradhan. For his part, the minister for oil and gas has also pushed a new policy—the Hydrocarbon Exploration Licensing Policy (HELP)—which gives private sector companies a free hand in the marketing and pricing of gas. Pradhan aggressively pushed 20 million free LPG connections to BPL families in the past year, under the PM Ujjwala Yojana—which is funded by subsidies forgone by affluent consumers.