Manmohan for rationalisation of power subsidy schemes

Prime Minister Manmohan Singh today said irrational pricing of energy was the major cause of problems in the energy sector.

The country must, therefore, opt for an economically-rational pricing policy, with built-in incentives for consumers to try and conserve energy through its optimal and rational utilisation, he said.a

Subsidies would be required, but they should be transparent and justified on stated economic, social and political grounds, Singh said, while speaking at the National Energy Conservation Awards today.

"I am aware that in an unequal society with unequal distribution of income and assets, it will not be politically feasible to adopt a purely economic model for energy pricing. Today, we are offering subsidies to a wide range of users without a proper analysis of their economic and social rationale," Singh said.

Seeking a national debate on "the need for economic utilisation of energy and a rational pricing policy", he said a rational pricing policy was required for all forms of energy, including petroleum, LPG, kerosene, water and electricity.

The experience of the last decade showed that we might have placed the cart before the horse by encouraging private investment in generation without adequately addressing questions of pricing and distribution, Singh added.

Thus, while the government was trying to find resources in the public sector to step up power generation, there was investment taking place in the private sector to ensure better quality distribution.

He said considerable theft of power was not getting captured and was instead being reported as "transmission and distribution losses or as free power being supplied to rural areas".

Speaking on the occasion, Power Minister PM Sayeed said industrial units participating in the energy conservation drive had collectively saved 615 mega-watts of electricity during the last six years.

Sayeed said energy conservation was the key to achieving global competitiveness and sought large-scale participation from building owners and contractors in developing and designing new structures that helped save energy.

Power Secretary RV Shahi, who was also present, said during 2004, 366 participating industrial houses managed to save about Rs 763 crore up from Rs 277 crore in 2003.