Targeting power subsidies

Grappling with a gamut of problems across production, distribution and revenue mobilization spheres in the power sector, the government has finally decided to target what it calls the "subsidies" to address its burgeoning financial losses. This, like many other piecemeal interventions, is unlikely to work. While this exercise might help the government in analyzing the quantum of additional resources it has to put to match the gap between the production and the selling costs of electricity, this measure alone cannot help in addressing the rot in the power sector. One immediate consequence of this measure could be enhanced costs of power to the consumers, especially those who are covered by metered distribution and pay for the electricity they consume. This measure, almost certainly, would not be able to address the fundamental reasons for power losses – that is unmetered distribution, systemic losses and pilferage. The fact remains the state is yet to achieve full metering of the whole range of consumer systems, which include both civilian and non-civilian consumers. The unmetered segments continue to consume disproportionately higher power – far more than what has been allowed under the flawed agreement-based consumption mechanism between that category of consumers and the power department. All governments have lacked the political will to bring this segment under metered distribution. While some progress has been made to improve distribution systemic efficiency in recent years, the fact remains that the power distribution infrastructure in the state remains one of the poorest in the world. The distribution-related power losses, as a consequence, comprise a major chunk of the overall losses. The third area of concern that remains is pilferage, including in metered consumer segments. While there are plenty of moral arguments why such a situation is despicable, and should not happen in the first place, this rot has to be fundamentally fixed by the government itself. And that could be done only if the government is able to address corruption in the power department through effective downward and upward accountability systems. Targeting subsidy is only a piecemeal measure. There has to be a strategic and overarching approach to stem the rot in the power sector in J&K.

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