Betting on the power game

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: India's nuclear deal with the United States has led to an almost violent clash of ideologies and political wills. The smoke generated from such debates has relegated the real issues to the background. Amidst the din of warring ideologies we seem to have forgotten that problems like those pertaining to energy security can only be settled by seeking refuge in the coldness and starkness of statistics rather than the heat of emotions.

The real issue is whether India can do without nuclear energy or not. What kind of allies it should seek in kindling nuclear energy and what treaties and agreements it should negotiate is a more secondary question. Being an emotional breed, as is evident from the steady diet of soap operas most of us thrive on, Indians have overlooked the practical question pertaining to the need for nuclear energy and attached primacy to the secondary question.

Here I endeavour to do exactly the opposite.

If there is one phenomenon, which can sabotage the Indian growth boom it is power shortage. A sampling of such shortages indicates outages that account for a total of 12 hours per day in towns like Bulandshahar in Uttar Pradesh and load shedding of epidemic proportions in Maharashtra often numbering 40 hours on the trot. Uttar Pradesh meets only 75% of its total power demand of 8,000 MW and industrial Maharashtra currently faces a power shortage of 5,000 MW.

With power demand known to motor along at the rate of economic growth, the race between demand for power and its supply seems to be as hopeless as that between the hare and the tortoise; in this case it will take more than a fable to put the latter ahead of the former.

There are two kinds of constraints to the expansion of power supply. One exists in the form of institutional constraints. These are short-run constraints — resources in the form of coal and water exist but the state electricity boards or unbundled state electricity corporations simply do not have the resources to undertake investment in new power plants; private sector expansion has been allowed, but has not been forthcoming till very recently because of lack of faith in the ability and willingness of the state to meet its infrastructure and finance commitments to the private sector as well as incomplete reform of the fuel markets supplying the power sector.