India has made great progress in the last 12-14 years in electricity generation and distribution.
Prime Minister Modi had made promises for electricity to all homes. In spite of the enormous progress, greater than that of the previous 30 years, we are still some way away from the target of reliable electric supply round the clock to all homes in India. The reality is that, barring Mumbai (and now probably Delhi too), even the other big cities in India cannot boast of this simple facility, let alone the smaller towns and villages.
Also, in addition to erratic power, our electricity prices, excluding the freebies to farmers and smaller consumers in many States, are very high prices. This makes many of our industries bear a burden not borne by industry in most of Asia and China, with whom our industries have to compete. And of course, the silent vast majority of the general public is saddled with very high prices. But this state of affairs has been going on for generations and for so long that the public accepts this as a fact of life, rather than something which can be changed by those responsible for electricity generation, transmission and distribution – of course supported by sensible market-friendly regulations that only the government can make.
In recent years there have been several major attempts to reform the market conditions for generation, transmission and distribution. But often the efforts have been piecemeal, dealing with only one of these in the supply chain without taking an overall holistic view. Part of the reason is that the responsibility is divided between the Centre and the States.
But the other reason that is rarely discussed is that only too often, efforts at the top to change policy and make the market oriented are stymied by the bureaucrats in charge of making the rules and regulations (what is called subsidiary legislation) which actually govern the sectors. These rules are usually extremely conservative, and are designed to move only a little away from the status quo. In law, these regulations have to be approved by Parliament, but in practice, no attention is paid to them and they are passed almost mechanically.
The cost the nation has to bear becomes clear when, on the one hand, in accordance with government plans and policy, there has been a headlong rush to build solar and wind capacity by the private and state sectors and, on the other hand, large capacities get wasted because there is inadequate evacuation or storage. The cover story sharply sets out this situation.
In a companion piece we look at the losses in transmission and the impact on the price consumers have to pay.
Hopefully, in the not-too-distant future, the Centre and States will bring some relief to all of us.