Why the latest round of power sector reforms may fail

UDAY misses the real reason for the current state of power sector in India - a lack of political will

National Award winning documentary ‘Katiyabaaz’, based on power theft in the bustling industrial town of Kanpur started a conversation on the crumbling power distribution in the country, last year, the same year when NDA government came to power promising ‘24X7 Power for All’.

A 'katiya' or 'kanta' or ‘kundi’ – as it is known in different parts of the country is not just a fatal attempt to get free access to power; it’s mockery of our power sector.

This business of power theft, of politicians promising free power, and of local authorities turning a blind eye to it could impede the success of the ambitious UDAY scheme of the NDA government aimed at providing 24X7 power to all.

Ujwal DISCOM Assurance Yojana (UDAY) is indeed an all-encompassing scheme for reforming the power distribution sector. It has a clear focus on technological improvement, urges states to be accountable for losses and inefficiency of their distribution companies (discoms), and suggests measures for operational improvement.

The scheme was announced in the wake of state-owned discoms defaulting on their loans for years, leaving the banking sector exposed debt of as much as Rs 3.5 lakh crore.

The first step the scheme suggests is the taking over of discoms' debt by the state government and sold as bonds in the market. This will clear the books of the discoms at least for the short term and bail out the banks. (This is not the first attempt to restructure discoms in the country; previous attempts have failed miserably with states defaulting on the measures suggested by the Centre)

(ALSO READ: Katiyabaaz - Power struggles in a dystopic system)

The reason I use the word ‘suggest’ is because electricity is a state subject and the Centre can only be guiding authority. Of the three components of the power sector, generation and transmission are easier to turn around as these are with the Centre. However, distribution, which is with the states, is usually the broken link in the whole connection.

Power supply is not governed by the electricity regulator in this country, but by the people in power; be it chief ministers promising free power, local thugs thrashing power company executives asking for payment, or MLAs promising farmers subsidised or free electricity, to name just a few.

“People want free electricity because subsidy is ingrained in us just like corruption is. Sab politics hai free power ki, economics aati nahi hai inn netaon ko (this is all politics of free power, these politicians don't understand economics),” a political analyst in Kanpur told me when a private company hired to reform the discom was pushed out of the city by local politicians.

An editor in Delhi once rued the fact that electricity could never come to his village in Bihar as when infrastructure was built, there was not enough power supply. But Bihar has improved power supply lately, I told him. He grinned and said: “People had sold the poles and power lines by then.”

On top of it, electricity department officials were beaten up when they told the villagers had to pay for power supply.

But urban areas are not better off. In several satellite areas in Delhi, the power supply companies have not received a single penny of payment for past many years.

“Madam hamare neta ne kaha ki ek paisa mat dena inn bijli waalon ko. Tum sab ko bijli free hai ((Our leader has asked us not to pay our electricity bills as power is free for us),” a cab driver, resident of Najafgarh who was complaining of power cuts told me. And by neta, he didn’t even mean the MLA, who is the elected representative.

Uttar Pradesh one of the states at the forefront to accept UDAY reform plan. UP is election bound in 2017. Economics might lose to politics again.

The policy clearly states that reform needs to percolate till the level of the last lineman. I faintly recall a dialogue by Loha Singh, the protagonist in Katiyabaaz, “Hum hi lineman, hum hi engineer, Kanpur ki bijli ka raaz, katiyabaaz (I am the lineman, I am the engineer. The secret of electricity in Kanpur is Katiyabaaz).”

The reforms will have to fight such katiyabaazs at all levels. The Gujarat state government has asked the police force to join hands with the energy department to ensure ‘nuisance-free’ bill collection and metering.

Coordinated efforts need an iron political will, a whip-cracking authority, and consumer awareness. In the 72-page presentation on UDAY, I sadly didn’t find anything like this. And those wondering whether we will get 24X7 power soon – please pay your electricity bills and stop voting for those promising free power.