PM's power reforms upset Left

'SEB losses add up to Rs 21,000 cr'

Even as Prime Minister Manmohan Singh set the pitch for reforms in power sector by voicing concern over the Rs 21,000 crore accumulated losses of state electricity boards today, the Left parties protested against his Saturday's statement on discontinuing free power to farmers.

Addressing a conference of states' energy secretaries in Shimla, Singh warned that India's energy deficit was 11 per cent and stressed the need for reforms in the power sector to make it the engine of economic growth.

"Today, energy shortage is 11 per cent. Over the years, SEBs have become financially sick with losses of over Rs 21,000 crore. There is a need to reform the power sector to ensure that it becomes the engine of growth," Singh said.

Stressing that trifurcation of SEBs or "unbundling" was not a goal in itself, but the goal has to ensure efficiency, economy and enhancement of power generation, he said, "I want to know why there has not been a boom in private investment in the power sector."

The key element underlying reforms in many states was "unbundling", whereby the generation, transmission and distribution of power is to be handled by different companies, he said.

The prime minister, however, conceded that cross-subsidy remained a critical element in the sector and would continue "for a long time so that certain sections of society, for whom power is an absolute necessity and cannot afford, can continue to get power at affordable less-than-cost rates."

In New Delhi, the Communist Party of India (Marxist) disagreed with him and asserted that free power should be made available to needy farmers.

Concerned over shortage of electricity, the prime minister had yesterday said he was not in favour of providing free power to farmers as it hindered additional electricity generation.

"Giving free power will not help in self-sufficiency in power generation and it could be an obstacle in additional power generation," the prime minister had said while dedicating the 1500 mw Nathpa Jhakri Hydel Power Project to the nation.

"Free power should be made available to needy farmers," CPI(M) General Secretary Prakash Karat said in Chandigarh today while reacting to the prime minister's statement.

He said it was important to introduce the criterion of "gradation" in power distribution, so that poor farmers could get free electricity.

Karat, however, added that his party was not in favour of giving free power to farmers in those states which had not extended the facility so far. Karat reiterated the Left demand for a review of the Electricity Act of 2003 and said privatisation of power would merely add to the burden of farmers.

"The Congress government will not be able to give free power to farmers if the Act is implemented," he said. The Left parties claim that the government has not delivered on the promise of reviewing the Electricity Act 2003 as promised in the National Common Minimum Programme (NCMP).

The prime minister however, rejected the charge that the Left parties were sabotaging the economic policies of the Centre. Singh told a press conference in Shimla that "I continue to enjoy very good relation with the Left colleagues. I greatly value their assistance."

He said, "Sometimes their (Left) perspectives differ from ours but we have been able to resolve all these problems amicably. I have no doubt that the future will not be any different than what was witnessed in the last one year."