It is the prerogative of state governments to provide electricity subsidy to certain groups, but it should be 'revenue neutral' on distribution companies, Power Minister Jyotiraditya Scindia today said.
He also said electricity generated from natural gas will have no takers because of high generation cost. The government had approved the doubling of natural gas prices to USD 8.4 from April 1, 2014. This is expected to result in higher power tariff.
Scindia said his Ministry will move the Cabinet in a month's time with a proposal to amend the Electricity Act 2003 and the National Tariff Policy with the objective of reforming the power sector.
Scindia's comments on subsidy come against the backdrop of Delhi Chief Minister Arvind Kejriwal announcing reduction in power tariffs by up to 50 per cent for consumers using up to 400 units a month. Congress leaders in Mumbai Sanjay Nirupam and Priya Dutt have demanded the same in Mumbai.
Haryana also cut power tariff today.
"It is the state government's prerogative if it wants to subsidise certain group of customers on electricity tariff," Scindia said at a press conference here.
He added however that discoms should be revenue neutral'.
"Whatever is the price of power, if I decide to give subsidy to certain consumers, that is my prerogative as state government. No one can take that right away from me. But I must foot the bill for that. So, there should be transparency and accountability across the system," Scindia said.
He added: "We have put in place a policy framework for the sector, which will allow investors to get returns. This will allow discoms to operate efficiently and take away political and government interference from this very politicisation of power."
On CAG audit of private distribution companies in the Delhi, he said: "If one has done nothing wrong and there is nothing to hide, what is the issue."
Scindia also said Prime Minister Manmohan Singh headed CCI, since its inception, has accorded clearance to projects worth over Rs 1 lakh crore.
"CCI (Cabinet Committee on Investment) is an extremely robust and effective mechanism, we have pushed close to Rs 1,10,000 crore worth of projects through it, these projects were stuck up for some reasons at some point."
As many as 13 power projects were cleared by CCI in April 2013, freeing up stalled investment of around Rs 33,000 crore.
CCI, constituted in January last year cleared 18 projects with an investment of over Rs 83,000 crore, in August.
The panel also approved setting up two hydro power projects in Arunachal Pradesh which were stuck due to environment issues.
The environment clearance for UMPPs without linking it with the forest clearance of the linked coal blocks has also been approved by CCI. Thereby paving way for faster implementation of power projects.
