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Home News Power Sector News Privatise distribution, reduce subsidy, increase tariff - Ahluwalia

Privatise distribution, reduce subsidy, increase tariff - Ahluwalia

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Union Minister for Power Sushilkumar Shinde and Planning Commission Deputy Chairman Montek Singh Ahluwalia The Planning Commission Deputy Chairman Montek Singh Ahluwalia asked states for  bringing in franchisees for distribution of electricity in politically sensitive areas and increase electricity charges and use power subsidy to improve essential services like drinking water, education and health. Only rationalisation of tariff, the Commission argued, can ensure sustainable growth of the ailing power sector, which is essential for promoting inclusive growth.

"The way the current situation (can) be handled is through some combination of tariff increase and serious efforts to reduce AT&C losses," Planning Commission Deputy Chairman Montek Singh Ahluwalia said while addressing the states' power ministers conference in New Delhi.

Addressing the state power ministers' conference, Planning Commission Deputy Chairman Montek Singh Ahluwalia said tariff revision would lead to growth in the ailing power sector.

 "The states should not waste money subsiding power; instead the funds should be used to provide basic amenities like drinking water, education and health care," he said.Ahluwalia, a strong opponent of free power to irrigation pumpsets, said free power supply would encourage farmers to exploit ground water beyond their needs. Instead, supply quality power to farmers by levying tariff," he told the states. He also asked the states to regularly revise power tariff and ensure the financial viability of distribution companies.

In the energy sector, he said, "we need to recognise that the objective of inclusive growth will not be served if the power sector is not made economically sustainable."

Ahluwalia also pitched for bringing in franchisees for distribution of electricity in politically sensitive areas to reduce losses.Power Minister Sushilkumar Shinde urged the states to facilitate land acquisition for speedy execution of power projects.

With the Centre targeting capacity addition of 88,000 MW over the next five years, the states should fast-track land acquisition, he said.

Expressing concern over the accumulating losses of electricity distribution companies, estimated at over Rs 1 lakh crore, the Minister said. "the biggest challenge before us to make them financially viable".It may be noted that the Centre is planning a Rs 2 lakh crore debt relief package for the ailing power distribution companies, which will be placed before the union cabinet this month-end.

Source- Deccaan Herald

 

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