Regulator as threat: Delhi’s power scene

Regulator as threat: Delhi’s power scene

It’s high time we revisited the approach to regulation and appointment of regulators if they are to serve the public interest Shakti Sinha To quickly recount some of the key gains from the privatization of power distribution in Delhi, aggregate technical and commercial losses have come down from around 55% to 15% at present. Load shedding has reduced from 5% to around 0.3%, or from 891 million units in 2000-01 to 43 million in 2012-13. Photo: Priyanka Parashar/Mint  Delhi’s power sector reforms, which had eliminated outages and enabled the system to meet peak load of 5,653 MW last summer, is on the verge of a collapse. The blame would lie squarely on regulators, with successive incumbents closing their eyes to reality. Their sins of omission and commission brought on by lack of expertise, populism and failure to stand up to the political executive have led to this avoidable situation. Delhi risks reverting to its earlier levels of shortages, corruption and insensitivity to the needs of the city and its citizens, bringing it on par with its neighbouring states. To quickly recount some of the key gains from the privatization of distribution in the city, aggregate technical and commercial losses have come down from around 55% to 15% at present. Load shedding has reduced from 5% to around 0.3%, or from 891 million units in 2000-01 to 43 million in 2012-13. Pre-privatization, the system could barely meet the peak load of 2,879 MW. To put this in perspective, but for the improvements made, to meet the present peak load, Delhi would need to buy 12,000 MW, instead of 5,653 MW that it did. This would not only mean an effective doubling of purchase price but a total collapse of the system as it cannot take such loads. What is often forgotten is that Delhi’s per capita consumption is the highest in the country, 1,651 kWh as against the national average of 778 kWh. To give some idea of Delhi’s consumption patterns, the sales of air conditioners were 266,000 units in 2009-10, 366,000 in 2010-11 and 345,000 in 2011-12. On the other hand, the sales of inverters and UPS units were 369,000, 331,000 and 262,000 in...

Nitish visits ruins of socialist shibboleths – Ravi Shanker Kapoor

Nitish visits ruins of socialist shibboleths – Ravi Shanker Kapoor

Bihar Chief Minister Nitish Kumar tried to achieve many goals at the recent rally in Delhi, but the portrait of the ambitious leader that emerges is not very flattering. As we shall see, his objectives, statements, and demands lack any novelty; any chief minister of any state could have said similar things 10, 20, or 30 years ago. It is an open secret that Kumar aspires for the office of Prime Minister, something that is being viewed with expectation by ‘secular’ parties, including the Congress. There were enough hints of Kumar’s ‘secularism’—many Muslim supporters sitting in the front row, an Urdu prayer, a placard thanking the Bihar government for providing land to the Aligarh Muslim University, and so on. The dominant theme, however, was his reiteration of the demand for the special status for Bihar. Unsurprisingly, histrionics were the hallmark of his address: “We are not begging for special status. It is our right.” In a bid to elicit support from Chhattisgarh, Goa, Jharkhand, Orissa and Rajasthan—the states which have earlier sought special status—Kumar said, “We are happy that UPA government has agreed in-principle to grant our demand. But now we want it to be implemented soon. Do it now or it will be inevitable after 2014 elections. Only he who holds the hands of backward states will sit in Delhi.” Kumar’s bombast and symbolism emanate from his dirigiste ideology. The basic premise of this ideology is that only a few divinely ordained Wise Men and Women in New Delhi know what is good for the country and the people. They are in-charge of all the resources; in their wisdom, they distribute or redistribute these resources to states which, in turn, have their own Wise Men and Women. Growth, development, progress—everything is a function of the wisdom of these divinely ordained beings. Problems do arise because of the differences among Wise Men and Women, despite their divinity. But these problems, according to the dirigiste canon, can be resolved by fine-tuning the terms of engagement. The fundamental flaw of this ideology is that the supposedly Wise Men and Women happen to be politicians, bureaucrats, and hangers-on; and one has to be gullible to expect wisdom...

Is this the Budget we want? – Pankaj Bhatiya

Is this the Budget we want? – Pankaj Bhatiya

This budget has once again amply proved the fact that with changing economic scenario the annual budget has lost its prestigious status as the most important annual event in terms of economic policy announcements by the government. Nowadays it is just a mere briefing on income expenditure statement of the government in current and coming financial year. On one hand the economic value of budget is going down, the political value is becoming much more significant. How else can we explain the over emphasis on the women in this budget after the inhuman act in national capital few months back? The victim’s family in this case is yet to get the due justice but the central government seems to have already done its part by naming the proposed Rs. 1000 Cr fund for women security & safety after Nirbhaya. Was the Delhi gang rape case a result of insufficient funds allocated for women security in India? Even a lay man can answer this correctly. Another women centric announcement of setting up India’s first women PSU bank with a capital of again Rs. 1000 Cr in the same budget is clear indication that the congress party is trying hard to retrieve its much battered image after Delhi gang rape as otherwise there is no viable economic reason behind this announcement. Shouldn’t lot of other more pressing issues in banking sector have got precedence over a Mahila PSU bank?  Are women of this country not getting desirable banking services by existing so called male dominated banking sector? Is the fairer sex being discriminated in access to best banking services? We are living in an India where some of the biggest private sector banks are being successfully headed by women and there is no dearth of women in senior executive ranks in PSU banks as well. Moreover all these banks are there in market for the business and to make profits (I assume this is true for PSU banks as well in changed competitive scenario) and why and how the hell any of these banks would like to discriminate on the basis of gender. One of the major cheer factors of this budget is the containment of...

IT czars are insufferable – Ravi Shanker Kapoor

IT czars are insufferable – Ravi Shanker Kapoor

What is it with India’s IT czars that invariably makes them insufferable bores and often dangerous idiots? Consider Wipro chairman Azim Premji’s suggestion that the super-rich should be taxed more, a suggestion that was lapped up enthusiastically and implemented quickly by Finance Minister P. Chidambaram. However, before analyzing the misplaced philanthropy of Premji and Infosys founder N.R. Narayana Murthy, who welcomed the tax on the super-rich, I’ll tell a joke. Perhaps it can make you do what Budget 2013 failed to do—smile a little. A guest was aghast seeing that the host’s son, a very young boy, was incessantly hammering nails in the drawing room on anything wooden—sofa sets, tables, stools, chairs, drawers, and so on. Horrified by the brat’s activity, he asked the host, “Why don’t you stop the child? What he is doing will cost you a lot.” The host, however, was unperturbed. He replied, “Oh, there won’t be big losses. After all, we own a hardware shop.” Like the harebrained hardware shop-owner, Murthy has also missed the point: the imposition of a surcharge is an abomination, not because it will hurt the rich but because it strengthens the impression that India under the United Progressive Alliance (UPA) government is determined to bring back the bad old days of socialism, the ancien regime which fostered Leviathan, promoted venality and cronyism, discouraged endeavor, and penalized enterprise. The danger is not that Ratan Tata and Shahrukh Khan would have smaller homes or less swanky cars; the real threat is that the predatory instincts of the dirigiste beast will be sharpened. Talking to a news channel, Murthy said, “I am quite happy about this surcharge because at the end of the day, in a country like India where there is so much of poverty, people earning Rs 1 crore shouldn’t crib about paying a 10 per cent surcharge. Therefore, I welcome it. We should all pay reasonable taxes in this country. We don’t pay any tax on our dividends and long-term capital gains tax is zero. So, if you consider all those things, this is peanuts.” Peanuts or dessert, surcharge on the super-rich is bad. For, as Winston Churchill said, “There is no such thing...

Visit Us On FacebookVisit Us On TwitterVisit Us On YoutubeVisit Us On Google PlusCheck Our Feed