High industrial tariff rates provide subsidised power to poor: Goyal

The power minister says industry should be responsible to providing power to the poor, farmers

Industrial tariff rates for power might be high but is crucial for subsidising electricity provided to rural populations and farmers, Power minister Piyush Goyal said on Tuesday.

Speaking at an event organised by industry body Confederation of Indian Industry, Goyal said the rich could not complain over a system that helps electricity reach to lower income groups. He was replying to concerns laid out by members of industry who complained that high industrial tariff for power was holding back economic growth.

"We are not oblivious to the problem and are fighting it by increasing efficiency and reducing costs for businesses," Goyal said. He added this efficiency will be best achieved through the reforms announced for government distribution companies through the recently announced Ujjwal Discom Assurance Yojana (UDAY) scheme.

The scheme, announced in November, has been touted as a bailout of India’s almost bankrupt state-owned discoms that are weighed down by Rs.4.3 lakh crore of collective debt and Rs 3.8 lakh crore of losses and can’t even afford to buy electricity from power generators.

The scheme envisages the states taking over 75% of the debt held by their discoms as of 30 September, 2015 in two years and pay back lenders by selling bonds. Discoms will sell bonds guaranteed by state governments to cover the balance 25% of the debt.

The minister also said central transmission utility Power Grid Corporation of India Ltd (PGCIL) has accomplished the highest ever yearly commissioning of projects worth Rs 30,300 crore. He said the establishment of two new international interconnections, with Nepal and with Bangladesh, will go a long way towards cementing India's working relationship with its immediate neighbors, which he remarked were better than ever.

Goyal also stressed the government's target for rural electrification was on track. "During 2015-16, 7,012 villages have been electrified till date and the remaining 11 thousand others will be electrified within the year," he said. Goyal added that electricity will reach every home in all these villages by 2018 and every home in the entire country by the next year.