The Hindu Business Line : Power plans

A little more than a decade and a half after he initiated high-profile reforms in the power sector as Finance Minister, Dr Manmohan Singh was preaching the same message at a Chief Minister's conference on Monday, now as the Prime Minister. Dr Singh used the occasion to highlight the problems of the power sector — target subsidies, add generation capacity as it would otherwise trip economic growth, reforms, competition and the like. He also announced the setting up of a professionally managed board in the Power Ministry, a Group of Power Ministers to look into issues affecting the sector, and a sub-committee to work out finance issues. The Prime Minister's worry about power shortage spoiling the growth story is hardly misplaced. Of all the infrastructure bottlenecks that threaten to derail growth, availability of quality power at the right price is one that has been talked about the most.

That the points raised by Dr Singh are still relevant can be seen from the stand taken by some States, especially Tamil Nadu, that feel a one-size-fits-all approach is not the way to tackle the power sector problems. Tamil Nadu, one of the few States that has still not unbundled its power utility, is against privatisation. Therein lies the problem in the power sector. The issues are known and have been debated and discussed for long. But the States that have to act are hardly willing to do so. They find it politically expedient to subsidise large sections of consumers, mostly at the cost of efficiency. energylost in transmission or simply stolen — referred to as aggregate technical and commercial loss — is still high. Capacity addition has fallen woefully short of target. For successive Plan periods, the country has barely managed to reach half of the target addition, an abysmal record by any standards. Besides, the budgetary allocation for the power sector does not get fully spent. Most of these are administrative problems. In that context, a professionally managed National Power Project Management Board in the Ministry is welcome. But was the absence of such a body the reason for the poor performance? What will it accomplish that agencies such as the Central Electricity Authority, and repeated discussions and reminders by Ministry officials have failed to do.

The private sector's interest can at best be described as lukewarm. Those opposed to private sector participation can say that getting funds for the huge investments that are needed is not a problem. More than the money it is the latest technology and the best management practices that are needed for the robustness of the power sector. Till the States are convinced that they indeed have to get their act together, the power sector will continue to be a worry for all concerned.