Rural electrification is the panacea for all ills,says former Power Minister Suresh Prabhu

Free electricity to farmers is said to be one of the stumbling blocks in the country’s march towards economic success. It is referred to as political largesse distributed by wily politicians, causing enormous losses to State Electricity Boards and hindering the growth of the power sector. But what is the situation on the ground, rather, in the field?

According to Mr. Suresh Prabhu, who was India’s Minister for Power from October, 2000, to August, 2002, the farmers’ organisations with whom he had interacted when he was a Minister had said to him, “Thank you very much for giving us the good news that we get free electricity! But we can get free electricity only when we get electricity”.

The government had then consulted all the State governments and it was unanimously decided to do away with the idea of free electricity. And this decision was implemented for two years. Sadly, after the government (led by Mr. Atal Behari Vajpayee) failed to win the 2004 elections, it was back to square one.

Mr. Prabhu alleged that the first announcement by the then newly-elected Chief Minister of Andhra Pradesh, the late Mr. Y.S. Rajashekhar Reddy, before lakhs of people was about free electricity to farmers.

Thankfully, the government had put in place the Electricity Act, 2003, under which it was obligatory for State governments to provide for a subsidy in their budgets in case they wanted to give electricity free of cost or at a cost lower than that decided by the electricity regulator.

“In fact, the law says (and this was a clause that I had introduced deliberately) that the lower tariff would not apply unless the amount of subsidy was paid upfront. That upfront payment is not happening, but it (the provision of subsidy) is now working and the State Electricity Boards do not have to carry the burden (on paper, at least) of giving political largesse to the people.

“Free electricity is an aberration of public policy... governments should not do charity at the expense of the State Electricity Boards. There is a regulator in place and you can actually go to the regulator (citizens have the right to do so) and say that because of this aberration, I have to bear the charges (for free electricity) and because the State Electricity Board is not collecting from somebody (else), it is I who have to pay. You will actually succeed, in case you try this.”

Mr. Prabhu, who was speaking on “Rural electrification” at the last meeting, made the above points in response to a pointed query by Camellia Panjabi who asked when things would change, especially vis-a-vis the populist sop of free electricity to farmers.

He told Camellia and his audience that it was on account of the Electricity Act, 2003, that as against the dismal scenario of 2003, when most companies were quitting the power sector, today, most of the investment in the power sector was coming from the private sector.

Over the next ten years, 80% of the investment in this sector would come from the private sector and 20% from the government. More and more corporates were earmarking capital expenditure for this sector.

Mr. Prabhu was introduced by Shailesh Haribhakti who pointed out that he was an innovative person who did something different rather than merely pursuing the accounting profession. He had passion, commitment and depth of knowledge, especially with regard to issues related to rural lighting.

Apart from serving as the Union Minister for Power, he had also served India as Minister for Environment and Forests and for Chemicals and Fertilisers.

He was elected to the Lok Sabha on a Shiv Sena ticket four times from the Rajapur constituency in Maharashtra (in the 1996, 1998, 1999 and 2004 general elections), before losing in 2009.

Mr. Prabhu started by pointing out that in India there was a tendency to segregate problems and to divide them into smaller entities so that they were easier to solve. But in the process there was a danger of oversimplifying issues and losing sight of the larger picture.

As far as rural electrification was concerned, no one in a city like Bombay bothered about it because it had constant power supply; it was hard to recall the last time there was a blackout here. In most other places, there were few occasions when there was constant power supply.

(Mr. Prabhu recalled that there was a total blackout in Bombay, caused by a grid failure, when he was the Union Minister for Power. To prevent such occurrences, it was decided to follow “grid discipline”; a manual was prepared, and followed, and there had been no recurrence of the problem.)

This did not mean that the residents of Bombay could turn a blind eye to the problem because, increasingly, the problems of rural areas were becoming the problems of urban areas and of the country as a whole; just as it could not be said that a person had cancer only on his/her little finger, because the cancer could grow to become a cancer of the entire body.

India had about 600,000 villages but despite the installed capacity of generating 170,000 megawatts of electricity, 45% of the households did not have power. This meant that out of a population of 1.2 billion, about 500 to 550 million people did not have electricity. In other words, a population equal to that of most of the countries of Europe never had electricity.

Further, even for the 55% of the population that did have connections, barring a few cities such as Bombay, Surat, Delhi and Hyderabad, electricity was available only for a few hours every day. As a result, the rural areas lagged behind the rest of the country as far as the human development indices (through which one measured the progress and development of a society) were concerned.

Thus, there was a direct connection between electrical supply and the human development index. There was also a connection between electricity and many other things.

India produced about 135 million tonnes of food grains last year. But most of the agricultural activities were carried out not with surface water but ground water. This entailed pumping out water with the help of pumps – and the use of huge quantities of electricity.

Similarly, most of the drinking water was obtained from underground sources, once again requiring pumps and a lot of electric power. In many rural areas, hospitals failed to perform surgeries in the absence of electricity, thus resulting in unnecessary deaths.

The list could go on and on, b