For generations of Indians, power situation in India has been one nagging problem and a running joke. Political promises of uninterrupted power supply became caricatures. So when Prime Minister Modi promised it during his poll campaign, many derided. But he did it in Gujarat. Everyone has seen it. The PM has set a date of 2022 by which every household in the country will have 24×7 power. And it is all being led by government with the ‘fierce urgency of now’. Last month while inaugurating the Phase II of Balighar project near Jammu, the Prime Minister said all of the 18,000 villages will be electrified in the coming 1,000 days.
At the heart of the power agenda is the discoms revival. Losses, Debt, Legacy networks – the problems are complex and serpentine. And the government has responded by ambition of vision and implementation. And it is all in the spirit of Team India. Therefore UDAY has been launched, an optional scheme of relief, health and discipline for the states’ electricity portfolio. Many states have shown their eagerness, Andhra Pradesh has communicated officially.
Under UDAY, the states are being encouraged to take over 75 per cent of the debt of the ailing SEBs / discoms, which will not be calculated as part of their fiscal deficit till 2016-17. Selected states would be able to sell the balance 25 per cent debt as state-backed power bonds which will carry interest rates of government securities plus 50 basis points. This way, interest cost on the debt taken over by the states will go down to around 9 from 15 per cent.
The ailing discoms will get fiscal space. For operations, UDAY will enable strengthening of sub-transmission and distribution network in rural and urban areas, metering of distribution transformers, feeders, separation of agriculture and non-agriculture feeders. It has set a target for state electricity boards (SEBs) / discoms for reducing the aggregate T&C losses to 15 from 22 per cent at present and cutting intra-state transmission losses.
Rs 1.8 lakh crore are estimated to be saved in this fashion yearly. Saving is a major thrust of end use also. Hence the push for LED consumption through various government missions for municipalities and households, its aggressive pricing, etc. Apart from the financial savings there will be overall reductions in CO2 emissions.
India needs massive supplies of power and clean power. From MW to GW is the new framework for renewable – solar, wind and hydro. And projects in sync with this are underway.
Thus, it is a showcase of success in economics, politics and public policy.
