India’s Achilles’ Heel

India stands at the brink of the revolution. The country seem dream spangled across. Undeniably, there is festive fervour across the corridors of industries. Much has been talked, projected and perhaps vaguely planned about the revival of the country on the lines of growth & development.

Quite literally, for everything you need energy, India’s energy sector seem bit behind that though. As much as 300 million people in India live without the electricity. The importance of energy is most apparent when it is absent. Over 300 million people in India live without the electricity. And even those who have it gets it sporadically. Also, it is expensive and loss-making to generate, transmit and to distribute. With specifically subpar performance at the distribution as that remains the key to revenue generation, badly affecting the entire value chain. As much as Electricity Act(2003) was a landmark along with the recent facelift of an Amendment(2014), it has not helped much in changing the grassroots reality. An act is just a framework for things to be done, implementing, executing and administering it remains the key points to get them translated.

The EA 2003 was designed as a forward- looking, procompetitive policy and institutional framework for developing the power sector. Superseding current legislation, it delicensed thermal generation, set timelines for open access to transmission and distribution—providing choice to power procurers and end-users—and introduced power trading as a licensed activity to foster competition and encourage private sector entry into generation and transmission. The EA mandated unbundling and corporatizing the SEBs, along with establishing independent central and state regulators and the Appellate Tribunal, with the aim of creating a more accountable and commercial performance culture. Subsidiary policies that followed laid the groundwork for competitive bulk procurement of power, multiyear tariff frameworks, rural electrification, and renewable energy expansion.

The Centre owns a quarter of power generation capacity and supplies fuel for over two-thirds of the power. It should give power only to State electricity boards that charge a single price for their power, which must cover long-term costs of generation. State governments must corporatize state electricity boards; if they want to give any consumer subsidies, they must finance them from State budgets. The same principle of long-term viability pricing must be applied to the Centre’s coal, oil and power enterprises. The Centre must buy floating thermal power plants like those in the West Indies, anchor them in ports, and use them to supply power to those States whose governments corporatise their electricity boards. The Centre must abolish all imposts on coal and oil products and create a national energy exchange where they are freely bought and sold; that will minimise the costs of energy. If it must impose taxes, they must be the same per Btu for all forms of energy and only on energy consumed by final users. As with power, the Centre must create an integrated, efficient transport industry. The railways must offer door-to-door delivery services to every factory, mandi, and port, and give free access to road transport companies. The Centre must build a dozen new medium ports with a draft of 15 meters, and finance the creation of a commercial fleet of Sub-Panamax vessels up to 50,000 tons to provide freight and passenger service along the coast as well as with our neighbouring countries. Sea transport will develop our coastline, move traffic away from crowded and expensive on-land routes, and promote our links with the Indian Ocean area.

That being said, Policy is made by policymakers, brought into the public sphere by media, administered by civil servants, enjoyed or suffered by common people and reshaped by democratic processes. Those who are elected may think they have arrived and only have to wave a magic wand; those who have elected them may soar with hope. But good policy requires a robust process of which elections are a small part. The new government still has to design the process, let alone implement it.

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