Focus on power sector for good governance in uttar pradesh

Focus on power sector for good governance in uttar pradesh

As Uttar Pradesh Chief Minister Yogi Adityanath walks the talk and seeks to deliver on the BJP’s poll promises, he needs to focus on power sector reforms. For, without quality power supply in the hinterlands, the development delivery mechanism would remain suboptimal and anaemic. Concurrently, the Centre needs to exercise suasion on states to be much more transparent on power utility operations.
It is welcome that some fiscal benefits of UDAY, Ujwal Discom Assurance Yojana, are beginning to accrue. Reportedly, 15 states that have initiated financial restructuring of power utilities, by issuing bonds against discoms’ debt, are likely to see cumulative interest saving of Rs 7,250 crore this fiscal. But what’s required is institutional reform and transparency. Average revenue realisation remains below the average cost of power supply nationally. Given our widespread energy poverty levels, power subsidies might not be ruled out, but these need to be transparently budgeted and provided for, for instance, via Aadhaar-linked bank accounts. The way ahead is to mandate quarterly publication of state power utility results, and a time-bound programme for stock market listing of state power utilities.
The point is to make a clear break from the perverse practice of politically mandated tariffs, tolerance of theft, open-ended subsidies and consequent woeful quality of power. Instead, good governance calls for 100% metering of power supplied 24×7, complete with reasonable utility bottomlines to provide for investment and plough-back. We need proper market design so that efficient power producers can supply, distribute and seek custom at competitive rates. Given sustained power demand in the offing, power utilities can actually provide steady returns for the long term.