Drawing on data from diverse sources, we present in this issue a statistical map on the Big Challenge of power supply – the difficult situation of unutilized capacity, unmet demand, poor discoms who cannot buy power, a broken transmission system and a series of structural deficits in need of massive repair. Affordable tariff does not flow from political tall talk or freebies as some utterly irresponsible politicians and populist political parties tend to engage in and thereby cloud the reform environment. It is a mammoth engineering task requiring enormous financial and administrative talent. In sum, it is hard work in detail.
The present government has shown both the vision and the implementation skill required for rising to the task. The manner in which it dealt with fuel linkages, stranded projects, swap provisions for fuel access to generation companies for bringing down costs is indeed smart policy. Hence we expect the government to have a firm grip on transmission lines and tariff reforms.
The transmission and distribution sector requires an investment of Rs 3 lakh crore. Removal of transmission congestion will bring down clearing price and consequently tariff. It will also save million units of power from being lost. In May 2015, 88 MUs were lost on the power exchange itself due to inter-state congestion.
We will soon see the improvement impacts in transmission as government has begun projects worth Rs 33,900 crore for the year 2014-15. These schemes will address transfer of new hydro-power from Bhutan and Gencos in Chattisgarh & Odisha. This massive rollout will also be a spur for the Make in India programme. The supply side reforms apart from ensuring 24×7 power and affordable tariff will boost investments and job creation. Verily, it is a growth enhancing measure that all states should support.
