Bharat empowered

Khamba toh laga diya tha saat saal pehle, taar bhi tha, per bijli ab aata hai – kucch der ke liye , (Pole was put almost seven years back, there was wire as well, but electricity comes now. It is for some time though)”, says Chote Lal, whose village falls in Muzaffarpur, Bihar.

Lal is not the only one. Kuldeep Singh, a migrant from Rajasthan, says in his village, “ Bijli toh tha lekin kab aata tha maloom nahi…aab kucch kucch ghante ke liye, chaubees ghante mein, mere ghar pe aata hai bijli. Subah bhi aata hai. (We had electricity but when it will come we never knew. Now, out of 24 hours we do get light for a few hours. In fact, we get it in morning as well). ”

This has truly been a remarkable transformation over the last decade. Despite the financial mess that is the power sector (nearly ₹2 lakh crore in non-performing assets and staggering losses of distribution companies), there has been a huge uptick in household electrification. The gap between ‘village’ and ‘household’ electrification has closed; the former would merely mean a pole and a wire getting to a village. A process that began with the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) launched in 2005 has truly gathered momentum with the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) launched in 2015 and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), begun in September 2017.

The difference between Saubhagya and the earlier schemes is that it is universal in character, connecting both above poverty line and urban consumers. Saubhagya plans to complete the electrification process by December 2018.

According to the Saubhagya portal, of the 18 crore households, 3.3 crore households (18 per cent) still remain to be electrified as of October 2017 ( see graphic ). If the recent rate of connecting households is any indicator, total electrification looks possible. However, experts such as former union power secretary Ajay Shankar, now Distinguished Fellow, TERI, believe total electrification will perhaps become a reality “in a year-and-a-half”.

According to “WEO 2017 Special Report: Energy Access Outlook”, brought out by International Energy Agency, “(In India), half a billion people have gained access to electricity since 2000, with electricity now reaching 82 per cent of the population, up from 43 per cent in 2000. If this pace is maintained, India will achieve universal access in the early 2020s. The pace has accelerated in recent years, with an additional 40 million people gaining access each year since 2011.”

Shankar explains: “No one could have visualised where we are today. When the RGGVY was begun in 2005, 1.25 lakh villages (a quarter of the total) and 7.8 crore rural households (at that time over half of all households) did not have electricity. However, household electrification has zoomed after 2011-12, when it was 56 per cent, while village electrification is almost complete today.” While political parties in the fray compete for credit, a Saubhagya-led push is under way.

Since 2005, over ₹50,000 crore has been invested in rural electrification and connections. “This throws into relief the lack of political will in earlier years,” observes Sreekumar N of Prayas Energy Group. The Modi government may step up this outlay, with former power minister Piyush Goyal announcing in September 2014 that ₹75,600 crore would be spent on rural electrification. Budget 2018-19 has set aside ₹16,000 crore for Saubhagya. The rural electrification push has been centrally driven over the years, with the Union government accounting for 90 per cent of the outlays. This push is part of a larger power sector thrust. Supply is no longer a constraint, owing to huge increases in capacity addition in recent years. But the crux lies in translating this surplus into power for all. Here, there is many a slip between cup and lip, as it were.

Supply and demand solutions

“Strangely, demand constraint coexists with power outages of 120 hours every month in rural areas (25 hours in urban areas). This is because on the distribution side, discoms are reluctant to bear a loss of ₹4 a unit by supplying to rural areas at a cost of ₹7.5 a unit. As a result, rural infrastructure and its maintenance is poor. At the consumer end, owing to the existing tariffs, more than 40 per cent of households in India use less than 50 units a month,” explains Sreekumar. Meanwhile, 23 per cent of thermal capacity is stranded also because of the industrial slowdown, contributing to the NPA crisis, he adds.

Ashok Kumar Khurana, Director General, Association of Power Producers (APP), agrees. “We have adequate capacity to meet growing power requirement – 24x7. But the issue is last mile connectivity, affordability. Fuel price and taxation/levies on coal and transmission cost have increased considerably over the last four years, making thermal power an expensive proposition for poor households.”

All this calls for a fresh policy approach — which is in evidence. For example, the ₹75,600-crore allocation includes ₹43,000 crore feeder separation for agriculture and rural domestic consumption. The former power secretary explains: “Following the example of Gujarat, States have separated the supply for the two, so that home electricity money can be collected. It must be kept in mind that compared to the subsidy of ₹40,000-50,000 crore a year for irrigation, subsidy for households is manageable. The financial health of discoms has little to do with the household sector.”

On subsidies, Khurana argues for Direct Benefit Transfers to farmers. This would make the industry competitive and reduce the tariff burden on consumers, he says. Shankar agrees, adding that decentralised solar would reduce the cost of power to agriculture.

 

 

Consumer-level challenges

Apart from policy brush-strokes, micro-level reforms are crucial. Minister of State (Independent Charge) for Power, RK Singh believes smart, prepaid metering could ensure the consumer is not cheated. “It will give poor consumers the flexibility to recharge prepaid meters online through mobile phones, with a small amount at any given point in time. This will do away with the human element in meter reading, billing and recovery of payment due from consumer, and hence the corruption at the lowest level.”

Shankar concurs: “Prepaid meters can make a big difference to the poor, as the experience in South Africa shows. They feel they are in control of their consumption.”

As for providing electricity at an affordable price, the Minister concedes it is a challenge. “But it is possible to provide the first 100 units at a subsidy of ₹5 a unit and raise the tariffs thereafter, so that the poorest are able to lift their living standards without the discoms paying the price,” Shankar says.

Finally, there are unpleasant ground realities to deal with. The Minister recognises the need for a ‘social change’ to weed out contractors and touts who lure gullible consumers with inflated bills. Earlier, getting an electricity connection would require multiple rounds of government offices, even paying bribes. It was unimaginable for the poor to get an electricity connection, he says.

Apart from the supply, quality and affordability of the supply are crucial, explains Sreekumar, “so that the consumer goes beyond using it for purely livelihood purposes to propelling business activity. For that, three-phase supply is essential.”

Under-served customers of power cannot be neglected. Governments understand this sentiment.

Inputs from A Srinivas

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