Revisit power subsidies: PM

Consensus on energy policy needed, says Manmohan Singh

Prime Minister Manmohan Singh today called for a political consensus on rational user charges for electricity and implied that the issue of subsidy for power needed to be revisited.

With this, he seemed to have hit a raw nerve not just within the United Progressive Alliance but also within his own party.

"Electricity is today a basic necessity. However, it is necessary that users remember it as an economic asset and hence, has to be valued and used judiciously. Every user of energy must be made aware of its economic and environmental cost," he said while launching the Rajiv Gandhi Gramin Vidyutikaran Yojana here.

The scheme was launched across the country through a video conference in which 12 chief ministers and the Bihar Governor participated.

"Even when governments offer subsidies to certain categories of users and there is scope for that, they must understand the relevance of this subsidy and have respect for the asset being provided to them. I, therefore, urge our political leadership to take a more long-term and rational perspective in pursuing our energy policy," he said.

He also said the challenge of economic generation, distribution and pricing of electricity had to be addressed in a non-partisan manner in order to ensure the rapid spread of electrification across the country and attract investments to the sector.

"I would very much like this to be a subject matter of broad national consensus cutting across party lines in our country," Singh said.

The scheme, aimed at providing electricity in all the remaining 74,000 villages by 2009, was launched in the presence of National Advisory Council Chairperson Sonia Gandhi.

Singh's remarks were qualified by Gandhi who also spoke at the function. Gandhi said delivery systems needed to be improved before there could be any discussion on user charges.

This is the Congress' position as stated in its 2004 election manifesto: that subsidies must be targeted but the quality of delivery systems must be improved.

Gandhi also underlined the government's commitment to ensure proper monitoring and involving panchayats for proper implementation and achievement of physical targets.

The Bharat Nirman programme and this scheme were steps in the direction of increasing rural prosperity and top priority would be given to development of agriculture, employment, education, health and rural electrification for which increased allocations were on the anvil, she said. Finances would not be a constraint in meeting rural development targets, she added.

Giving details of the scheme, Power Minister PM Sayeed said the government had allocated Rs 5,000 crore for providing subsidy under the scheme.

It would give priority to eastern and north-eastern parts of the country. Uttar Pradesh, Madhya Pradesh, Rajasthan, Maharashtra and Andhra Pradesh would also be on the list of priorities, Sayeed said.

The scheme integrates the existing programmes "" minimum needs programme, Kutir Jyoti programme and accelerated rural electrification programme.