Focus On Power Distribution
Mr Coehlo has now completed his work and made several important recommendations. The starting point of these is the recognition that the existing system under the SEBs is no good because it has been captured almost entirely by politics. This is because power has been on the concurrent list of the Constitution, which has left the states as the major players in the power sector. But given their economically awkward ways what often happens is that they end up treating power almost as a public good, which means that its consumption is not predicated on payment for it. Political interest groups override commercial or efficiency considerations in power pricing. Power tariffs fail to cover even the cost of electricity generation. It is little wonder, then that the SEBs suffered a negative return of 17.7 per cent in 1996-97 up from 15.1 per cent in 1995-96.
Indeed, it is this aspect that has made the agricultural sector the fastest growing consumer of electric power. With the share of agricultural consumers growing faster than the industrial consumers, the present irrational tariff structure spells certain doom for the states. It is here that corporatisation, which ushers in greater accountability, should help in tackling some of these politically-induced problems. However, aware that corporatisation alone may not be of much use, Mr Coehlo has also recommended privatisation of the distribution system so that in time it becomes more efficient. He has also suggested breaking up SEBs into more viable distribution zones. This makes sense because at present SEBs in the large states have to cope with problems associated with size without either the management techniques or the manpower.
The next government would do well to pay heed to these recommendations and set in motion a process whereby they can be implemented speedily because peak deficits have worsened from around 8-9 per cent in 1991-92 to around 11 per cent now. The overall energy deficits have continued to reel at around 18 to 20 per cent. If industry and other user sectors have not so far raised an alarm over the shortfall, it is only because of tardy demand for power because of the overall general economic slowdown. Even the power ministry says that demand for power has slowed down to around 6 per cent against the normal 9 per cent. But should there be a quick revival in the industrial sector, it will coincide with the onset of summer, when domestic consumption also peaks.