Vajpayee admits failure of power reform

Vol 5, PW 2 (14 Mar 01) People & Policy

India's prime minister is clearly not blind to the crisis affecting India's power sector.

In a hard-hitting speech to a conference of 16 chief ministers called to Delhi for an electricity summit on 3rd March, Atal Behari Vajpayee laid bare some unpleasant truths: "Even today, as many as 80,000 of our villages are without electricity," said Vajpayee. "Less than 40% of our rural households have access to electricity.

To make matters worse, only 40% of the power supply in India is billed. And not all those billed are made to pay.

The combined effect of all this is the stupendous losses of our state electricity boards, which now stand at an unsustainable level of Rs24,000cr ($5.28bn) each year." Vajpayee's speech - the full text is attached with this issue of Petrowatch-India - is surprisingly candid in its admission of failure: "Why has this situation arisen It is principally because we failed to address the problems in this sector with a comprehensive and long-term national vision. Our efforts were partial, and the parts did not connect and complement one another.

Generation, transmission, distribution and consumption of electricity are parts of an integral cycle. Reforms in the crucial initial stages failed to take this into account.

We should have focused on reforms in distribution before, or at least simultaneously with, those in generation."Quite!