Is there light at the end of the tunnel?

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The Eighth Annual Conference on Indian Economic Policy Reform on Development Research: Lessons for Indian Policy, held in Stanford University, concluded last week. It is no surprise that electricity reforms figured prominently as an area of endemic weakness in our economic strategy. While the issues and challenges are well-known, the paper of Frank Wolak presented at the conference concentrated on efficient demand management for a more optimum equilibrium between demand and supply of power. The paper suggests going beyond time of pay metering to hourly metering of power and the variations in pricing will minimise volatility of supply and induce consumers to conserve power when its cost is high. Many of these prescriptions may be sensible, but they may not be applicable to Indian conditions. In India, even the coverage of metering is less than complete and issues of free power, cross-subsidy, transmission and distribution losses and open access continue to be the dominant concerns.

The prime minister took some more initiatives to convene a special meeting of chief ministers some time ago on power-related issues. The recommendations contained in the resolution adopted at the end of the conference are more meaningful to our conditions than some of the more refined versions of the power sector reforms.

First and foremost, the goal of power for all by 2012 depends on significantly augmenting generation capacity. Monitoring the timely commissioning of projects by a newly proposed National Power Projects Management Board can reduce implementational delays. Hopefully, the states would heed the advice to create a similar apparatus. Time and cost over-runs of power projects apart from design deficiencies, faulty fuel linkages, tardy land acquisition and failure to assess likely tariffs, all need to be addressed holistically. Even with respect to central sector projects, state governments have a crucial role to play. It now needs to be seen how this Project Management Board is manned, the quality of its coordination and more than anything else, its ability to resolve problems in a timely fashion. Mere monitoring can add to knowledge and enhance expertise but resolving problems, including dispute resolution, is crucial for project management. Hopefully this will not be a mere monitoring body but function as an empowered group. The power ministry must yield authority and space for this body function as an autonomous entity.