From the late nineties onwards, States began to use the concurrent powers bestowed to them under the Constitution to deal with the power sector, to enact laws for power sector reforms. These amendments freed up generation for the private sector, unbundled the monolithic electricity boards into separate entities for power generation, transmission and distribution and constituted electricity Regulatory Commissions, which would set tariffs and standards for generation and distribution. Read more »
Even as privatization of the generation sector was happening, another idea gained currency as a frontline strategy of reform; unbundling of the power sector. At first sight, the idea seemed reasonable enough. By the late nineties, State Electricity Boards had become unwieldy, leviathan organisations. Those of larger States, such as Uttar Pradesh, were Railway-like in their sizes; They had the largest numbers of employees compared to other public sector undertakings on their rolls, ranging from specialist engineers who ran generation plants to legions of linemen and bill collectors, who were the frontline workers that consumers usually saw (or did not see).
By the late nineties, about five years after liberalization, it was clear that the travails in the electricity sector were pegging the country back. That was when the Government of India got into the act.Privatisation was the flavour of the season and the Government of India was not immune from the belief, peddled by a flotilla of foreign consultants and international aid and lending agencies, that bringing in private capital into the electricity sector would boost generation of power.However, there was a problem here; why would anybody invest any money in the sector if the power tariffs were such that nobody could make a legitimate profit? To cure that, the government of India issued an order in 1996, which to my mind would rank as one of the biggest policy blunders of the government. The order permitted the entry of the private players into the power sector, on a declaration that a return of 16 percent would be assured on private investment. The rationale for this order was that other countries including our neighbour, Pakistan were doing it with good results. Read more »
There is no doubt that the electricity sector is in a shambles. How we got where we are, reads like a Greek tragedy; no one individual or level of government is completely responsible and yet collectively, we have managed to mess up things magnificently.
Last week’s blog evoked plenty of reaction. Obviously, discussions on the power sector touched a responsive chord. Read more »
I ended last week’s blog with the observation that production of electrical power nearly always involves some form of rotary motion. At first sight, one might wonder whether this is a blog on public finance, or is to assist 8th Standard students in understanding the basics of electricity. Read more »
Last week, two nagging issues of public importance forced their way into prominence. The first, based on the repeated and long power cuts in Delhi, was the alleged failure of the government to anticipate and remedy the shortage of electric power. The second was a more localized failure, that of garbage disposal in Bangalore. The villagers of Mandur, located on the outskirts of the city, have been resisting the disposal of garbage in an unscientific land-fill in their locality, resulting in stockpiles of rubbish clogging the city. Read more »
The Jawaharlal Nehru National Urban Renewal Mission saga continues. Where did I put those conditionalities?
In the beginning, the Government of India did not insist that States ought to implement the conditionalities imposed by it, for securing funds under the JNNURM. A period of adjustment was given to States, to implement the two directives of the Government of India, namely, to enact a public disclosure law and a law for public participation. Read more »
Today, the Government of India has announced that it will scrap the Jawaharlal Nehru Urban Renewal Mission (JNNURM) and replace it with a new scheme for building a hundred smart cities. This signals the death of an idea and possibly, the rolling out of a new one. Read more »
This story does not have a happy ending.
My blogs over the past few weeks described how the Panchayat members in Karnataka conducted participative surveys in their constituencies, to create local databases of families. We were struck by the enthusiasm shown by Panchayat members in collecting data from their constituencies. Some of the innovations, such as the practice of taking pictures of people standing in front of their houses and adding these to the database, were picked up and replicated in several Panchayats. Read more »