The Hindu : National : Manmohan to review Electricity Act

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Friday, Dec 17, 2004

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National

Manmohan to review Electricity Act

By Our Special Correspondent

NEW DELHI, DEC. 16. The Prime Minister, Manmohan Singh, is expected to review the controversial Electricity Act, 2003 tomorrow, so that suitable amendments can be made during the next session of Parliament.

The Act is already in operation, though certain deadlines included in it such as the unbundling of the State Electricity Boards (SEBs) have been put on hold. The Left parties have expressed reservations on certain provisions and want the Government to amend them.

Objecting to the unbundling stipulation, they said the experience of unbundling the SEBs had been poor. It did not resolve fundamental problems such as losses of the SEBs or subsidy from the Government or transmission, distribution and commercial losses. On the other hand, it had led to multiple organisations in the power sector, hampering coordinated working.

Also, the Act burdened the State Governments with a lot of responsibility but with almost no authority. The Left parties told the Prime Minister that the Act bestowed effective decision-making such as tariff fixation on the Electricity Regulatory Commissions, which had no executive responsibility at all. "While the regulatory bodies had a significant role, they cannot be a body which can overrule or ignore the declared objectives of the State Governments," they said.

Statutory distinction

Another point of criticism was that the Act made a statutory distinction between rural and urban areas and mandated the elimination of subsidies and cross-subsidies. "This has serious implications for agriculture, power-looms, streetlights, water works and 75 per cent of the rural population. The Act, if not amended, will divide the masses into rural and urban areas," the parties informed Dr. Singh.

Tomorrow's review meeting will basically involve the Prime Minister, the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, and the Power Minister, P.M. Sayeed. The meeting is expected to consider the objections of the Left parties in the light of the review of the power sector that would be undertaken by the Prime Minister's Committee on Infrastructure which is looking into the developmental plans for the sector.

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