The Hindu : National : Justify power subsidy on economic, social grounds: Manmohan

Online edition of India's National Newspaper
Wednesday, Dec 15, 2004

National

National

Justify power subsidy on economic, social grounds: Manmohan

By Our Special Correspondent

NEW DELHI, DEC. 14. The Prime Minister, Manmohan Singh, today said that subsidy on power offered to consumers should be justifiable on stated economic, social and political grounds.

Launching a national campaign on energy conservation, Dr. Singh said that ideally rational and economic pricing of power (that is, power at cost price without subsidy) would have a built-in incentive for energy conservation, but added that ``I am aware that in an unequal society with unequal distribution of income and assets, it will not be politically feasible to adopt a purely economic model for energy pricing. What it means is that whatever subsidies we offer to consumers must be offered transparently and be justified on stated economic, social and political grounds.''

Dr. Singh said that at present subsidies were being offered to a wide range of users without proper analysis of their economic and social rationale. The free supply of power in rural areas had the effect of not only encouraging excessive use of power, but also of encouraging the wasteful use of groundwater, with the result that groundwater levels in many parts of the country were falling at an alarming pace and the excessive application of water was encouraging irrational cropping patterns.

In this context, Dr. Singh suggested that experts, policy-makers, public figures and concerned citizens should encourage a national debate on the need for economic utilisation of energy and on the need for a rational pricing policy. This multi-faceted approach should be adopted in the pricing of all forms of energy including petroleum, LPG, kerosene, water and electricity, he said.

Stressing the need for energy conservation, the Prime Minister said almost 56.5 per cent of the rural households had no access to electricity and in many States this figure was as high as 80-90 per cent. Where electricity was available, the quality was often far from desirable, he said and pointed to the massive and wasteful private investment in upgrading quality and ensuring reliability of supply. The Prime Minister also gave away 39 awards to industrial units for outstanding performance in energy conservation. The 297 industrial units, which participated in the award scheme for 2004, had collectively saved around Rs. 763 crores by taking energy-efficient steps.

Printer friendly page
Send this article to Friends by E-Mail

National

News Update

Stories in this Section