Finance Commission calls for time-bound metering of all water, electricity users

All electricity and water consumers should be metered in a time-bound manner, a Constitutional body has suggested.

“We recommend that 100 per cent metering be achieved in a time-bound manner for all electricity consumers as already prescribed statutorily,” 14th Finance Commission said in its report, which was made public on Tuesday. It also said that the Electricity Act, 2003 needs to be amended to levy penalties for delays in payment of subsidies by State governments. The Commission, appointed by the President, gave its report on December 15. This is the first time the Commission was asked to consider statutory provisions relating to the pricing of public utilities.

The Commission recommended that States (and urban and rural bodies) should progressively move towards 100 per cent metering of individual drinking water connections to households, commercial establishments as well as institutions. “All existing individual connections in urban and rural areas should be metered by March 2017 and the cost of this should be borne by the consumers,” it said

It also said that all new connections should be given only when functioning meters are installed. While providing protected water supply through community taps is unavoidable for poorer sections of population, metering of water consumed in such cases also would ensure efficient supply.

Quoting a Road Ministry report, the Commission noted that out of 38 State Road Transport Undertakings (SRTUs), only two reported net profits in 2012-13 The aggregate losses amounted to ₹7,269 crore, 56 per cent of which was accounted for by just three. Current arrangements, both at the Union and State level, give rise to a potential conflict, as the rule-making body is also the implementing body. Consequently, there is no independent assessment of the performance of the SRTUs across various parameters.

“We, therefore, recommend the setting up of independent regulators for the passenger road sector, whose key functions should include tariff setting, regulation of service quality, assessment of concessionaire claims, collection and dissemination of sector information, service-level benchmarks and monitoring compliance of concession agreements,” it said.

The Commission highlighted the fact that the tariff structure in the Railways is characterised by very low passenger fares and high freight charges. Indian passenger tariffs are one-fourth of those China, one-ninth of those in Russia, and nearly one-twelfth of tariffs in Japan. To remedy this, a regulatory framework for tariff setting is urgently required. This will enable costing of services and timely rate revisions along commercial principles for both passenger and freight traffic. Keeping this in mind, the Commission endorsed the initiative to set up a RTA and urge expeditious replacement of the advisory body with a statutory body, through necessary amendments to the Railways Act, 1989.

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