Launching a Rs 3 lakh crore package for distribution sector reforms and a clutch of NTPC’s renewable energy projects, he pointed out that discoms owe more than Rs 1 lakh crore to generation companies as they have not received the committed subsidy, while power bills of government departments and urban local bodies remain unpaid.
He said that India’s power sector losses run into double digits while developed countries have managed to keep it to single digit.
“This means that we have been wasting lot of power and, due to this, are having to produce more than what we need to,” he said, launching a package for distribution sector reforms and a clutch of National Thermal Power Corporation Limited’s renewable energy projects.
He also warned against the freebie culture in politics – the second time this month that the PM had attacked what he called the practice of using freebies for votes at the cost of long-term development. His first salvo on the “revadi culture” had come on July 16 when he inaugurated the Bundelkhand Expressway.
The warning was amplified by the Supreme Court on Tuesday when a CJI-led bench sounded an alarm and suggested that the Finance Commission consider regulating flow of funds to states which have been dispensing subsidies.
“Serious distortions have crept into our politics over time. In politics, there must be courage to tell people the truth. But in some states we see a tendency to push the issues under the carpet. This may look politically profitable in the immediate run. Not addressing the challenges today is like passing on the burden to our children, future generations,” the PM said.
“The generation companies are producing electricity but not getting paid… Just as a household will go hungry without cooking fuel even if it has condiments or a vehicle will not run without fuel, everything will come to a standstill if there is no power. If the power sector in one state gets weakened, it has repercussions for the entire country,” he said.
The distribution sector has emerged as the weakest link in the power sector and subsidy – or free power – is a major reform impediment as delayed payments by state governments push the utilities into a debt trap.
TOI had on July 26 reported how discoms can be back in black if the states honour their subsidy commitment of Rs 76,337 crore and government bodies clear Rs 62,931 crore bills estimated as of March 31.
Unpaid subsidies and government bills leave discoms with little money to upgrade networks to reduce “high double-digit” line losses. Therefore extra power has to be generated to meet demand after accounting for such losses, raising electricity cost for consumers, he said.
Though the PM did not name any state, his statement is being seen as targeting the ‘free power’ plank of several regional parties, especially Delhi CM Arvind Kejriwal who has made it AAP’s campaign leitmotif.