India’s antiquated systems are standing in the way of speedier growth of the nation. At the same time, political will is lacking in the introduction of reforms; and in some cases, the reforms that were introduced were half-baked and failed to produce the desired results. Yet, change is in the order of things and reforms are the need of the hour. So too with the present move by the central government to introduce major changes in the electricity distribution sector. Amendments to the Electricity Act 2003 were introduced in the Lok Sabha on Monday and the proposals were later sent to the Parliament’s standing committee on Energy for a review. The hope is that this will end state monopoly over power distribution and private entities will have a level playing field.
Notably, the first set of reforms in the power sector was to allow private players to produce electricity and sell it to state electricity boards that did the distribution to consumers. This helped in ending the era of frequent load-shedding and nights of darkness. Today, state-owned power distribution companies are running in heavy losses and the governments are made to pay through their noses to sustain them. As per the present reforms, while governments are free to subsidize power, they must pay for it rather than burdening the discoms. From the existing distribution networks, consumers are free to choose the company they want to draw power from. This is bound to introduce competition and end monopoly that is the bane of any sector. The seriousness of the central government to set things right in the power sector – the principal promoter of economic growth – is evident from the Rs 3 trillion scheme it floated to inject strength to the power distribution segment. This is against the pitiable situation of rising dues of discoms to power generating companies of the order of Rs 1.12trillion.This thus is time to act and act tough.
It should come as no surprise that employees in the state electricity boards under the banner of the Leftist unions have organised a nation-wide strike a day ago to protest against the government’s reforms steps. Their main worry is their own vested interests will be affected once private players enter the distribution field. The Left, which has lost its mass base across India, survives and thrives by collection of crores from unions by way of levy and other fees. Policies must be decided by governments and not by unions. The government must keep people’s interests supreme and take a tough stand when needed.
