India’s power slipping away?

Published Mar 18, 2013 12:15am

ONCE in a blue moon, an Indian bureaucrat gets it right. R.V. Shahi, the union power secretary in 2003, took on a backwater job that few wanted, and resurrected the country’s electricity sector.

Fundamental to his initiative was setting up a regulatory regime for utilities, non-existent for 50 years. Utilities in India, called state electricity boards (SEBs), had hitherto operated mainly as dispensers of political largesse. Electricity was given away to vote banks like farmers, theft was unbridled, balance sheets were considered scraps of paper. No surprises then that SEBs would bleed to death, but a forgiving government would step in to wipe their slate clean. Good money followed bad, with the vicious cycle repeating ad nauseam.

Shahi took on a clueless political class, and brought archaic issues to the forefront. Soon states like Gujarat, and even poorer ones like Orissa, set up regulatory commissions that set new tariffs and freed their SEBs, somewhat at least, from the stranglehold of the politicos. As the country’s economy started growing, the politicians themselves realised that the electricity equation had changed.

No longer was there much dividend in doling out power. A growing middle class wanted consistent supply, and was willing to pay for it. Industry demanded power of better quality. If left unaddressed, India’s power woes would put its growth in jeopardy.

When Manmohan Singh became prime minister in 2004, he realised India’s need for more power. In 2005, he and George Bush stunned the world by announcing a nuclear deal. Consummating it consumed Singh. While the layman did not understand its contours, he trusted Singh was doing something about India’s power situation, and re-elected him.

Shahi retired, unheralded and sans promotion, typifying India’s bureaucracy in which careerism often trumps accomplishment. But he had converted the moribund power ministry into a hotspot, with politicians and bureaucrats vying to plug in. Recent power minister, S.K. Shinde, was elevated to the home ministry. A new renewable energy ministry was created, headed by Farooq Abdullah.

Few expected much of him, but he announced that India will target 20 gigawatts of solar energy by 2020 from a base of five megawatts in 2009 (one gigawatt is 1,000 megawatts). A pipe dream it may well turn out to be, given the global downturn in the solar industry, but Abdullah is not known if not for grand gestures.

Utilities in Mumbai and Delhi have been privatised. With balance sheets coming in focus, they have had to curtail theft, which used to average around 30 per cent.

India faces the same conundrum in electricity as in food. Much of its population does not have access to either, but the government claims a bounty of both and wants to export it.

The aforementioned nukes are slated to add generation of 15 gigawatts by 2020. How ironical that the Americans, prime-movers of the initiative, are languishing with liability concerns, while free-riders France and Russia have forged ahead with reactor construction.

India ditched the gas pipeline from Iran ostensibly due to security concerns. In reality, discovery of large reserves of domestic gas by the private sector, as well as the lure of importing shale gas (a form of natural gas) from the US, which has been touted to be cheaper than the traditional Iranian gas, seems to have made the Indians balk.

Oft derided as the dirtiest resource, coal is the cornerstone of India’s generation. The country is the world’s third-largest producer, as well as consumer of coal. Steep demand for electricity trumps climatic concerns.

Wind energy is an area in which India has thrived, with close to 20 gigawatts of installed capacity. An Indian company, Suzlon Energy, is the world’s fifth-largest wind turbine supplier. Another success story is to be found in smart meters, where Secure Meters has beaten the likes of General Electric to sell hundreds of thousands of smart meters to western markets.

To meet projected demand, India must double its current power generation of 200 gigawatts by 2035. It is in danger of falling short. Electricity theft is still rampant across the country, SEBs continue to bleed, technical problems with the grid remain unaddressed, and politicians keep doling out power. Three hundred million people lack access to supply. In China and Brazil, theft is as rampant as in India, but both countries are curbing it through smart meters. India disdains them, in part because the neta-babus (bureaucracy) fear losing the gravy from lineman corruption.

Gujarat used to serve rural areas through one network, which encouraged households to avail of the cheaper agricultural rate. By bifurcating supply, households now cannot game the system. Other states might want to follow suit.

Most of India dreads the onset of summer. Homes sweat, industry cribs. Air-conditioning, which should be de rigueur in factories and schools, is the true differentiator of class. Instead the powers that be, who themselves are fully air-conned, refuse to accept that making the facility pervasive would dramatically increase productivity.

Every Independence Day, the Indian prime minister highlights the need for more electricity and reduction in losses. Despite his promises, energy woes are strangulating the country. Manmohan Singh perhaps forgets that his obsession with power was precisely what won him power in 2009. R.V. Shahi in the meantime has been consigned to oblivion. If Singh wants to match his own rhetoric, he might consider appointing Shahi as his energy czar and empower him to reform the sector.

The writer is a freelance journalist.

sunil_sharan@yahoo.com


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Comments (21) (Closed)


Just Guess
Mar 18, 2013 03:17am
South Asia = Mismanagement by its leaders
Amjad Wyne
Mar 18, 2013 04:31am
Mr Sharan writes, "In China and Brazil, theft is as rampant as in India, but both countries are curbing it through smart meters. India disdains them, in part because the neta-babus (bureaucracy) fear losing the gravy from lineman corruption" - Pakistan has the same issue.
rohan
Mar 18, 2013 04:54am
Gujrat and Modi leads the way of growth.......
Ravi Ingale from University of Pune..
Mar 18, 2013 08:58am
South Asia influenced by India.
SecularFundamentalist
Mar 18, 2013 09:55am
pakistan india can come up with smart south asian grid where a stock exchange like grid can established where the surplus power can be diverted to the power hungry areas
Raj
Mar 18, 2013 11:00am
You are dreaming in technicolors , aren't you?
zohra
Mar 18, 2013 11:04am
No south Asia but Pakistan is mismanaged by its Boots. Indian GDP has crossed that of UK.
Bill Carson
Mar 18, 2013 12:13pm
who have surplus power?
G.A.
Mar 18, 2013 01:19pm
@zohra- what does 'GDP' mean to a talented child begging on the streets of India and probably will for the rest of his/her life all thanks to corruption and mismanagement that all of South Asia could do without.
Shahid
Mar 18, 2013 01:59pm
Who is Modi? What is his significance as of now? Are 2014 elections over yet? Aren't you jumping the gun kid? Do you think Online support translates into votes always? If yes then why did Modi's party lose miserably in HP and soon gonna lose in Karnataka? Dream on of this mass murderer ever becoming PM!!! InshaAllah he never will. Muslim_Indian
GulJan
Mar 18, 2013 06:47pm
Maybe or maybe not but Indian 8 states have more poor than 25 countries combined.
nandkishor
Mar 18, 2013 07:43pm
we can not achieve power surplus bcoz of our population growth..
Geekay
Mar 18, 2013 09:00pm
You wrote well. Perhaps, little more data on most deficient states and surplus ones would have added more essence to this article.
Shruti
Mar 18, 2013 11:14pm
Well as dreamy and flowery your statement sounds, GDP growth means a lot to even to the poorest. The per capita income of India has gone up in the last decade and the percentage of population below the poverty line and illiteracy have substantially gone down. GDP is a macro term for the economy, but it has a everything to do with grass-root growth!
khurshid
Mar 19, 2013 04:18am
The story in Pakistan is different from india in power sector.
JP Gupta
Mar 19, 2013 03:05pm
A lot can happen provided trust exists betweem these two countries.
Shree
Mar 19, 2013 03:54pm
Modi is an able administrator and demonstrated his capabilities. It is unfortunate that his admirers are seen as communal and anti-muslims rather than rational thinking Indians. I am a secular minded person but I support Modi. Corruption and inefficient governance is root cause of problems. If anti-Muslim plank could win elections, then Shiv Sena would have been ruling India from New Delhi. You can not win 3 consecutive elections with a recounding success without doing good work. Back to the topic, talking of state electricity boards in India, under Modi's governance Gujrat State Electricity board has started giving profit without any increase in the tarrif. It is turn around from loss. All he did was preventing theft. Also, Gujrat has 24/7 power supply and is power surplus state.
Gunjan
Mar 19, 2013 04:55pm
I agree that increased GDP would eventually do good, if (ever) it reaches the masses. But, the clap-traps of GoI of poverty reduction are just that. It's a race against population anyway. And then, they keep fidgeting with defining poverty lines. Tomorrow if they decide to reduce poverty line to Rupee 1/day, almost entire India would be above PL. Stats are great tools, but hold no meaning without contexts.
amit
Mar 19, 2013 05:42pm
bro y are u crying here every one know after looting billion's of dollar congress days are limited .
Bbbb
Mar 19, 2013 11:43pm
They don't like DRS for the same reason -;)
Bbbb
Mar 19, 2013 11:44pm
Hahahaha, and the homeless have crossed.....?