Jammu & Kashmir is often projected as a power deficit state, with valley painted as black in revenue generation and collection. It is said that J&K is fed on outside power supplied by National Power Grid Corporation or National Hydro Power Corporation (NHPC).
In J&K, with a few hydro projects generating 1211 MW of power under its control and management, seven hydro power projects are being controlled and managed by NHPC.
As revealed under a central RTI application the NHPC generating 2009 MW and having earned profit of Rs.19442 crore during 14 years did not return these to J&K which had also to pay above Rs.4000 crore annually for purchase of additional energy from NHPC.
The Chenab Valley Power Projects Private Ltd. has been launched in the format with 49% share given to JKSPDC, 49% to NHPC and 2% to Power Trading Corporation – a subsidiary of NHPC.
Doubtlessly in any form of government in any part of the world poor states deserve and ought to be given some relaxations/concessions in the matters of levy and rate of taxes, fees, duties and budgetary allotments or else rich states will grow richer, poor poorer, resulting in punctured wheel of an otherwise efficient vehicle.
The judicially planned growth strategy guides to this goal say the economic scientists.
From the long line of inherited opinion on the subject matter, experts hold that J&K has the hydro power potential of 20,000 MW-30,000 MW. Assume the minimum of 20,000 MW only of which 16475 MW have been identified.
This comprises 11283 MW in Chenab basin, 3084 MW in Jhelum basin, 1608 MW in Indus basin and 500 MW in Ravi basin. NHPC generates 2009MW (Uri-I=480MW,Uri-II=240MW, Salal:690MW, Dulhasti:390 MW, Sewa: 120 MW, Nimo Bazo : 45 & Chutak : 44 MW) while as State Sector has generation of 1211 MW (Baglihar: I= 450, Baglihar: II = 450 MW + 311 MW from various small Projects) and 42.5 MW in private sector making an aggregate generation of 3262.5 MW (3220 + 42.5 MW) per annum. The peak load need of J&K is stated to have been estimated between 2500 and 2800 MW.
Taking the higher side of 2800 MW for consumption, J & K should have a gross surplus of 420 MW(3220 MW -2800 MW) which means profit of Rs.290.32 crore – rate of profit earned by NHPC during 14 years i.e. Rs.19442 crore 14 years 2009 MW x 3220 MW= Rs.2226 crore 3220 MWx420 MW.
However, liquidating Rs. 90 crore for debt redemption of Baglihar Project J& K will be still left with a net surplus of Rs.4200.32crore (Rs.4000+200.32 crore) and will not have to pay anything what to talk of pay more buy less. The needle of thought points towards figures of estimation, generation, transmission& distribution losses, AT& C losses and royalty on the roulette of power.
J&K is said to have recorded 60.5 percent AT& C losses for the year ended 3/2020. However it is not alone but followed by Nagaland with 52.9 percent, Arunachal Pradesh with 45.7 percent , Bihar with 40.4 percent, Tripura with 37.9 percent etc. Taking severe climatic conditions into consideration J& K is no worse in transmission losses.
According to Economic Survey of India 2021, India’s T&D losses are over 20 percent of generation which is more than twice the world average. Regarding fear of technical, managerial, and administrative incapability of JK SPDC handling the affairs of power projects vis-à-vis NHPC.
Baglihar power project provides an ample proof of local competence & expertise making it a success despite heavy financial constraints and damages force majeure. NHPC. With all its easements executing Dulhasti project had more time over-run than Baglihar with only three years which can be safely taken as performance indicator of the efficiency & the effectiveness of JKSPDC.
The losses suffered by local manufactures in public & private sectors in J&K are also due to non-availability/less availability or low voltage of power during working hours. This renders the employee idle by virtue of which products normally expected to be manufactured in a normal timeframe drag upon time.
This, as a logical worldwide phenomenon, increases the unit cost with resultant higher sale price, thereby catching less buyers making the forced wind ups of any industrial activity. This position results into JK with widening revenue deficits. It is to point out that availability of raw material, local or imported, for a finished product is no problem.
Nor road connectivity for valley is a hindrance as how long can a road remain closed due to geographical or political weather conditions. That is why doling out of huge industrial incentives, subsidies, tax holidays, tax remissions have suffered unsatisfactory results. Although development of agriculture, horticulture, animal husbandry, handicrafts etc. cannot be under estimated yet the power has precedence as a key to set the spindle in motion.
If power scenario is improved, wherever possible, it will boost all round development with resultant effect on employment and revenue generation. It is an indisputable fact that consumption of power shall always increase due to increase in population and use of gadgets which suggest discovery and usage of other sources of energy also.
It is said that J&K spends Rs.6, 200 crore annually on purchase of power while its revenue realization is just Rs. 2,600 crore on account of tariff collected from the consumers; thus making a deficit of Rs. 3,600 crore.
Surprisingly in a reply by KPDCL to a query asked under Right to Information Act disclosed that there were pending energy bills worth Rs.2,348 crore mostly against the government departments including some private hospitals as per news reports as on 11.9.2021.
There are also chances/ reports of deliberate pilferage and avoidable use of electricity consumption by consumers telling upon its functional and the financial health.
The consumers are also to make judicious and honest use of energy. Moreover, returning of Dulhasti power project to J&K was recommended by the Rangarajan Committee appointed by Government to look into state’s anemic finances and suggest remedies.
The committee had also recommended one time debt write off by providing financial packages to J & K. Promise of return of two power projects of 390 MW Dulhasti and 480 MW Uri in the Agenda of Alliance of the PDP-BJP coalition Government (1-3-2015 to 19-6-2018) was one of the government’s pronouncements in this behalf.
Non-consideration of agreements, recommendations and promises have their due consequences with replenishment of resultant deficits a sine qua non. Every central government is to respond quickly with fruitful action towards the genuine demands and concerns of a state/UTs as the relationship between them is fiduciary in nature.
Strong and stable subordinate units mean stronger centre besides contribution to healthy national psychology, strength and oneness. Central/state and the private utilities are to gird up their loins. If J&K is provided sufficient power it can certainly improve its position and there is no problem if the surplus power is taken to other states/UTs which form the country.
The author is a former Sr. Audit Officer and Consultant in the A.G’s Office Srinagar.
Disclaimer: The views and opinions expressed in this article are the personal opinions of the author.
The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.