March 11, 2004 

 Press Release

  The Bharatiya Janata Party coined a new slogan with an acronym – “BSP” — `Bijli, Sadak, Pani’ for the recently concluded assembly elections. Subsequently, the NDA government is claiming that in major areas of infrastructure, their performance has surpassed the totality of achievements of the first fifty years of independence. But, our study from the Communist Party of India (Marxist) on `Bijli’ — the power sector, reveals a contrary picture. This study is the third in the series, "Lies, damned lies and statistics" to nail down the falsehood advanced in the `Shining India’ campaign.

Is India Really Shining?

Lies, Damned Lies and Statistics

Infrastructure: Power Sector

The advertisements published in all the national dailies by the Ministry of Non-Conventional Energy Sources and the Ministry of Power (dates 18th and 25th February 2004 respectively) contain more rosy projections about the future than actual achievements already made. For instance it is claimed that electrification of more than 20,000 more villages would be accomplished by 2007, additional 10,000 MW electricity from non-conventional energy sources would be generated by 2012 and in the next 2 years 100 lakhs households have been targeted for giving new electric connections.

A hard look at the data for power generation and rural electrification show a completely different trend in reality. In terms of addition to the power generation capacity, the record of the Vajpayee Government has been disastrous. The Central and State governments together added only about 13,500 MW during the 9th Plan period (1997 – 2002) as against 21,000 MW added during the 7th Plan. An additional 5,643 MW added by the private sector during the 9th plan was generated largely through plants which used naptha and diesel as inputs, thus producing power at very high costs imposing unbearable burdens on the State Electricity Boards as well as the consumers.

Figures from the Economic Survey show that the trend rates of growth in total power generation in the country as well as generation of hydel and thermal power between 1997-98 and 2001-02 have been declining steadily. This exposes the hollowness of all the claims related to enhanced power generation.


Source: Economic Survey, 2002-03

Rural electrification has also slowed down considerably under this regime. During the 9th Plan period only 11,200 villages were electrified as against 1,20,000 during the 6th Plan and 1,00,000 during the 7th Plan. The Vajpayee government has also been promoting (under the guise of a technology mission) a decentralised power generating system for rural areas. This would imply that villages would be denied access to cheaper and better quality grid power and have to rely on standalone systems, which would generate power at much higher cost and of poor reliability.

Privatisation of generation, transmission and distribution of power has been a cornerstone of the Vajpayee government’s power sector policy. The Vajpayee government had encouraged multinationals like the Enron to set up high cost units, which sold power at a price which was found to be 3 to 4 times costlier than the price charged by the Maharashtra State Electricity Board (MSEB), resulting in losses for the MSEB for the first time in its history. After the MSEB and the Maharashtra Government scrapped the contract with the Enron, the Vajpayee government put pressure on the state government to settle its ‘dues’ with Enron. Even after the collapse of the Enron, the central government did not initiate any action, despite fully knowing that Indian financial institutions like the IDBI, the IFCI and the SBI had either given loans or guaranteed Enron’s loans to the tune of 2 billion dollars. The spectacle of Enron’s first stage lying idle today and the second stage aborted mid-way speaks volumes of the government’s disastrous power policy.
The privatisation of power distribution in Orissa by the BJD government led to a hike in the price of electricity by 2 to 3 times for the consumers without any improvement in power supply. After the Kanungo committee termed the privatisation move as a total failure and one of the distribution companies (discoms) AES, quit the scene, the Orissa Government had to step in and take over its operations. The record of the other case of privatisation is equally bad. The Congress government in Delhi privatised Delhi Vidyut Board (DVB) and handed over its assets to the Tatas and Reliance. In the first year of their operations, the subsidy provided by the government to these discoms amounted to Rs.2,600 crores, which was more than twice the highest loss ever suffered by the state owned DVB. Privatisation of power generation and distribution has become a tool of subsidising the multi-national companies like the Enron and domestic monopolies like the Reliance and Tata, by hiking power tariffs for the common people.