Admitting that Transmission and Distribution (T&D) losses in Jammu and Kashmir is one of the highest in the country, Finance Minister Dr. Haseeb Drabu on Wednesday said the JK government spent Rs 12,000 crore in ongoing fiscal on power purchases and liquidating past liabilities in the sector.
Drabu, who presented his third Budget as Finance Minister of the state, said: “Despite this high level of public spending, the power situation on the ground -in winter in Kashmir and in summer in Jammu - hasn't improved.”
Referring to T&D losses, the FM said, “This is one of the highest in the country, even when compared to hilly States.
The point is that the problem is not with buying less power; in fact we are buying more than the average household uses in the country. The problem is in supplying and consuming it.”
“In terms of supply, it is the inadequate and outdated T&D infrastructure and in terms of consuming it is misuse. First is a case of inefficient transmission distribution and second is the question of efficiency of use,” he said adding that only solution is investment in T&D infrastructure which ”we have made provision for but it will take time.”
The Minister said vast majority of people don’t pay electricity tariff in line with their consumption.
“Despite the tariff in JK being one of the lowest in the country, our power collections are consistently one third or one fourth of what is budgeted,” he said adding, “It is a fact that a vast majority of users don’t pay electricity bills at all or in line with their consumption. At the same time, we promptly pay our telephone, mobile, internet and cable TV bills without bothering for the rate as threat of immediate disconnection is there.”
“We use power indiscriminately for cooking and heating, treating it as a right and a free resource. Is this sustainable in the long run? Certainly not!” he added.
Backing his claims with figures, Drabu said J&K should be buying 3200 MUs to provide electricity to its 20 lakh households.
“Instead, we buy 6400 MUs for the household segment at an average consumption of 6 units per household after accounting for T&D losses of 30 per cent,” he said.
“I have always maintained that the development of the power sector holds the key to the fiscal autonomy of the State. As stated in my state budget, the power deficit in financial terms is a little more than Rs 2500 crore after adjusting subsidy element and reasonable T&D losses. If this deficit is taken care of, we would have no budgetary deficit.”
He stating that for government, money is not a binding constraint. ”As we speak, the Government is ready to buy more power and supply it down the line. But for now that is not the solution. Even if we buy more power today, we cannot carry it because of transmission and distribution capacity constraints. And these, unlike a money constraint which can be overcome overnight, are hard constraints. Despite adequate resource availability, creating T&D capacity across the state will take time.”
He also stated that due to unrest, infrastructure creation in power sector took hit. “Unfortunately, last year not much infrastructure creation could be done because of the prevailing situation. Had the last six months of last year not seen the turmoil, we would have been better off this winter. Having said that, there are some home truths; key concerns and policy issues which we need to face and provide answers and policy responses,” he said.
Drabu stated that government has been infusing Plan funds into various State PSUs/Corporations to meet their Capex requirements.
“In case of the J&K SPDC, the Corporation has received an amount of Rs 4300 crore approx as the plan funds, in addition to Rs. 793.09 crore given to it for BHEP-I under PMP,” he said.
“Similarly, it has been selling power to the J&K PDD and as on 31.03.2016 there was an outstanding of about Rs 2400 crore on this account. I am happy to announce that after adjusting power supply dues, the balance Rs 1900 crore would be converted into equity, raising the equity contribution of the State Government in the J&K SPDC.”