Chairman Mao had famously said that "power flows from the barrel of the gun". The Indian version of the slogan could well be "power flows from electricity wires"-supplied free of cost, of course.
People get lured by the promise of free and unlimited power supply without bothering to find out what such a handout will cost and who will foot the bill. The beneficiaries (mostly farmers) soon realise that they are not even getting the quality or amount of electricity they used to get when it was not free. The inescapable realisation in most cases is: free power means no power or bad power. The rationale is simple. One can give free power only if one can generate and distribute it without any cost. Or else someone else will have to pay for the largesse-willingly or unwillingly.
| PICTURE SPEAK |
|"I prepared a declaration to be signed by all political parties that they will shun populism". |
Post-Green Revolution it was discovered that there was not sufficient surface water to meet the growing demand for irrigation. The response should have been to build more capacity to store water through measures like disilting of tanks and water harvesting. Instead we promoted drawing of ground water as if that was available in unlimited quantity. As water levels depleted with excessive drawings, electricity was used to pump it up. The farmers using electricity had higher input cost than the farmers using surface water. Again our response was shortsighted: we decided to give power free to farmers to pump water. Not only was the power free, the consumption went unrecorded with no meters to monitor the usage. That is the root cause of many ills we face today.
The state electricity boards (SEBs) could not carry the burden of this philanthropy and had to raise the price of power for paying consumers. This distorted tariffs. The SEBs started showing all their unaccounted consumption as "agriculture consumption" and it became an excuse for power thefts. Price distortions also provided a reason to justify thefts-since the tariffs are excessively high, people are forced to steal, went the logic. The entire governance collapsed and the SEBs went into the red due to huge transmission and distribution losses. Bankrupt SEBs could not even provide quality power to existing consumers, leave apart expanding electrification.
The farmers began to realise that free power in reality meant no power, and worse, they were being blamed for the ills of the sector without even being given electricity. Today over 80 per cent of irrigation is from ground water, causing massive depletion of water tables and threatening the water security of many villages. Most agriculture pumps are power guzzlers since there are no meters to record the units consumed.
Earlier, I started a dialogue with farmers all over the country. We organised 2,500 roadshows, mainly in rural areas, to talk about the evils of such self-destructive policies. Farmers said they did not want free power, but assured power at an affordable price. We tried to restore the viability of SEBs, without which power reforms and growth in electrification is impossible. I put a special provision in the electricity draft bill (which has now become an Act) that unless the state government is willing to pay for the subsidy to its SEB upfront, the tariffs fixed by the electricity regulator will be charged. The governments must pay for their benevolence through their own and not someone else's pockets.
To cut competitive populism in announcing free power, I prepared a common declaration to be signed by all political parties that they would not indulge in such populism. The declaration was discussed with many parties informally but before I could make it a formal common agreement, I ceased to be the power minister. I prevailed on all chief ministers to charge minimum rates to all consumers.
Thanks to the Electricity Act 2003 states now have to pay for free power from their budget. As far as farmers are concerned, what they need is more income through better pricing of their produce and assured supply of inputs-including power. It is interesting to know that the Left governments in West Bengal and Tripura do not provide free power. Can the Left not be right?
The author is an MP and was Union power minister from 2000 to 2002.