How power crisis can black out Modi’s plans to reboot India in drak

New Delhi,12 June-2014, MK Venu: The Modi-led BJP government is grappling with a major power crisis in North India. There is a severe power crisis in Uttar Pradesh where power cuts range from 8 to 12 hours a day.

How power crisis can black out Modi’s plans to reboot India in drak

Prime Minister Narendra Modi. AFP

Many other North Indian states too are facing several hours of load shedding. Even New Delhi, where power supply has been normal in recent years, is facing massive load shedding this summer, prompting the Power Minister Piyush Goyal to stay up all night to assuage irate residents and push private power suppliers hard to meet the needs of the people.
In Jharkhand, angry residents led by senior BJP leader Yashwant Sinha gheraoed the electricity office and were arrested after officials filed an FIR against the protestors. The power crisis has turned into an ugly political battle between the Centre and the non BJP government in Uttar Pradesh. The BJP must realize it is now in power at the Centre and must deal with non BJP governments in a more conciliatory manner to solve many problems facing the nation. Blaming the non BJP state governments for everything will not help Modi in getting their cooperation to deal with critical problems facing the country.

After all, one of the promises made by Narendra Modi is to treat all Chief Ministers as equal partners in development. So the Centre will be advised not to blame the non BJP state governments for everything going wrong in the country. Prime Minister Narendra Modi. AFP The BJP needs to show some generosity at this stage if it wants to move away from the bitter, negative politics of the past three years and create a conducive atmosphere to help resolve developmental issues.

President Pranab Mukherjee also emphasized in his presidential address that 2014 should be “the year of healing” as we leave behind the bitter politics of the past. In this context, Rajiv Pratap Rudy’s speech in Lok Sabha, in the debate on the Presidential address, was particularly graceless when he said the Lok Sabha outcome were a result of 65 years of failed governance. Rudy would be advised to go through Atal Behari Vajpayee’s famous address to Parliament after winning the 1999 elections when he gracefully accepted that a lot had been achieved in 50 years since independence though things were far from satisfactory. So as the BJP confronts serious developmental problems it must at least admit that our failures cannot be blamed totally on parties other than BJP. For instance India’s power sector is a mess for which all governments, at the Centre and in the states, have been responsible.

Electricity is the backbone of the economy and very few state governments have had the courage to implement power sector reforms by making the state electricity boards economically viable. Uttar Pradesh has witnessed the maximum load shedding this summer because its peak demand in summer goes up to 18,000 mega watts and in the winter months it consumes less than 13,000 mega watts. The power minister is right when he said that the Centre is willing to supply more power to UP but the state refuses to buy more power because the cost of power is more than what the people pay for it. So the more power UP buys from the Centre, the more losses it accumulates. So it prefers load shedding to buying more power to supply. This problem is not confined to UP alone.

The Chairman of Central Electricity Regulatory Commission (CERC) told this writer that most state electricity boards supply power at below cost and incur huge losses. The total annual losses incurred by State Electricity Boards (SEBs) today is Rs 70,000 crore and this was less than Rs 24,000 crore ten years ago. So this problem is not confined to just Uttar Pradesh. It is happening across India. The Electricity Regulator also said the country has 2,50,000 mega watts of power capacity and the actual peak demand in summer is no more than 1,55,000 mega watts. So the country clearly has surplus capacity available. But the state electricity boards do not generate power beyond 55 percent to 60 percent capacity. Why? Because if they generate up to 90 percent of their capacity then they will incur that much more losses. This is a peculiar situation where there is enough power capacity but it is not being supplied because the states do not want to sell at a loss. Why does this happen?

This is a political issue because governments have not been able to persuade some people to pay more so that the very poor can be subsidized. This is the fundamental problem which needs to be politically resolved. Can Modi rise to this challenge? Narendra Modi will do well to call a meeting of all chief ministers to take a collective decision on this urgent question. This has to be done fast because the power cuts will come in the way of economic recovery as it is the most critical input to industry. A study by industry body ASSOCHAM says shortages are likely to force over 25 percent micro, small and medium enterprises (MSME) in several states, mostly in north India, to close their businesses. To add to this problem, the weaker monsoon is also predicted to be concentrated in northern states. Clearly, this is a national problem which the Modi government must tackle urgently without unnecessarily politicising it. It is incumbent upon the government to take other regional leaders along in this endeavour.

In his reply to the debate in Lok Sabha on the Presidential address, Modi did say he would seek everyone’s cooperation in executing his government’s development goals. He even surprised everyone by seeking guidance from BJP’s arch rival in UP, Mulayam Singh Yadav. For UP will be the litmus test of BJP’s development plank which seeks to build and consolidate a new social coalition under a backward caste Prime Minister. This would not have been lost on Mulayam Singh Yadav. Clearly, as Mao once said, politics will not be like a dinner party in the future. Especially after the initial honeymoon period is over for the NDA.