Confront affliction in power sector too

Confront affliction in power sector too

There is policy action on the vexed power front. A moratorium of three months on repayments has been extended to state power distribution companies (discoms) as for other debtors. This should not be taken to mean permission for continued inaction on the key challenge of stamping out power theft and ending the policy of open-ended giveaways. A broken power sector could have tragic consequences as, for example, when oxygen pumps and whole intensive care units (ICUs) go crashing down as a result of power breakdowns and concurrent fault in backup diesel generation.

The outstanding dues of discoms now add to over ₹86,000 crore and rising, thanks to political patronage for non-payment, rampant revenue leakage and theft. The political executive both at the Centre and the states now need to appreciate and communicate to the voters that assured supply of quality power is not possible without consumers paying realistic user charges. Mounting dues of financially moribund discoms would cripple generation and supply and surely lead to massive non-performing assets (NPAs) for banks. The discoms’ total outstanding debt to banks and financial institutions is put at ₹2,28,000 crore for 2018-19. The UDAY scheme, or Ujwal Discom Assurance Yojana, launched with much fanfare in 2015, has not quite worked any magic on discom finances.

A recent Asian Development Bank Institute paper says the quality of power is grim pan-India, with most rural and semiurban areas getting no more than 12 hours of power supply on average. Such poor supply conditions would constrain muchneeded agricultural and industrial value-addition beyond a few urban centres. A viable power sector is the foundation of the nation’s aspirations for a $5 trillion economy and much else.