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One more opportunity

Though late, the Government of India has put together a restructured Accelerated Power Development and Reform Programme (APDRP) at a total cost of Rs.51,577 crore to run through the rest of the Eleventh plan period. In the first phase, the programme will entail an outgo of Rs.17,033 crore to the States that are ready and committed to pushing ahead with reforms. Even during the Tenth plan period some of the progressive States undertook basic reforms in this vital sector and they may be reaping the dividends already. For those who want to take up the next stage of reforms and for those who need to get started on it, the APDRP will provide another opportunity. Now that most of the States are going through a severe power crisis and are resorting to power cuts and unannounced load shedding, they must have realised the importance of conserving electricity and optimising its use. The objective of the programme is to accelerate reforms in the distribution sector, reduce technical and commercial losses, and establish a baseline data and IT applications for energy accounting or auditing. Basically, the APDRP should pump in funds to enable the States and their electricity boards to tone up distribution and bring down power losses to reasonable levels. While clearing the programme, the Cabinet pegged the power loss at 15 per cent for States to be eligible for the grant-cum-loan benefit.

Revamping the distribution system and reducing the technical or commercial losses — often a euphemism for theft — assumes importance in view of the fact that on an average the transmission loss for the State electricity boards is about 35 per cent. It is shocking that a little over one-third of the power generated and fed into the grid is either lost or stolen and does not get billed. Many of the States reeling under a summer power shortage this year face a deficit of between 100 MW and 400 MW. Because of a so-far deficient monsoon — it has just showed signs of revival — hydel generation fell to new lows and even the normally power-surplus States could not spare anything this year. If only the States had contained their transmission losses and theft to 15 per cent, they could have bridged the gap between generation and demand to a large extent. Ultimately, it is only by increasing power generation that the growing demand can be met. The States should seize this second opportunity given by the Centre to complete the reforms process. Energy deficits have a debilitating effect on industrial production, and at a time when the economy is under severe inflationary pressures, production has to be stepped up and the growth momentum maintained.

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