PM pushes for power reforms, says it’s engine of growth

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Shimla, May 29: Making a strong case for reforms in the power sector, Prime Minister Manmohan Singh on Sunday told a meeting of power secretaries from across the country that only this could be “the engine of growth.”

He ruled out implementing a uniform power policy, pointing out that every state has specific problems which need to be addressed flexibly. Mr Singh told reporters later that a rigid uniform power policy in the states could prove counter-productive.

Chairing a meeting of power secretaries, the PM made a strong case for reforms in the sector. “Today, energy shortage is 11%. Over the years, state electricity boards 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.”

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

The key element underlying reform in many states was ‘unbundling’ whereby generation, transmission and distribution of power is handled by different companies, he said.

The Prime Minister, however, admitted 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.”

Mr Singh said that his government was “enjoying good relations” with his Left colleagues at the Centre. “Although their perspective sometime differs from ours, we have been able to resolve problems amicably,” he said. Wrapping up his two-day visit to the state, Mr Singh said he was optimistic and “we will work together for the ideals laid down under the CMP.”

He also announced a package of Rs 1,120 crore, including a special plan aid of Rs 400 crore, to HP for overall development of the state. Mr Singh said the Rs 400-special plan aid would be untied — not related to any specific project.