In this Idea Exchange, Veerappa Moily, who handles the Power and Corporate Affairs portfolios, speaks about the power situation in the country, sedition law and why ?it?s not possible to unbundle? the Koondankulam project. The session was moderated by Maneesh Chhibber of The Indian Express

Veerappa Moily: The power sector is the soul of the country, it pushes up GDP. From 2007 to 2012, in terms of capacity addition, the private sector has grown in a big way?the state sector has been reduced to 23.43%, the central sector to 21.56%, while the private sector is at 55.02%. That is mainly because the Electricity Act, 2003, introduced reforms dismantling many discoms. As of today, we have a capacity of 1.99 lakh mw and it will rise to three lakh mw in the next year.

The black-out crisis of 30-31 July was due to multiple reasons. There was overdrawing from the northern grid and western region. We transmit power through the Grid Corporation of India and frontlines but we have no control over it and we cannot regulate it. We need regulation at the state level. That is why we say independence should be given to the state regulators. After the blackout, I called the chief ministers of states on the northern grid and we discussed how to maintain discipline. Everybody is behaving well now, and that is why I say this will not happen again. The states have problems like the sanction of power projects, transmission lines, etc. We have worked out debt restructuring for them.

There are five grids?north-east, north, east, west and south. We have two frequencies. The southern grid is not integrated with the national grid. As a result, fuel is a problem for the south. Power produced in any other part of country cannot be fed to this grid and the southern states cannot draw power from the national grid. After a review, I found there is one project where the transmission line needs to be connected from Raichur to Sholapur. If that is connected, the southern grid can be integrated with the national grid. Then power produced in Arunachal Pradesh can go to Kanyakumari. This line will be completed by 2013 and it will be synchronised by January 2014. It will be one frequency and that will solve the problem in the country.

YP Rajesh: After the blackout, you said that in future, chief secretaries of errant states would be punished to ensure there is no repeat. Is that a long-term solution?

Whenever anything happens for which the state governments are responsible, they should take responsibility. We are glad that 25 states have revised their power tariffs. So a lot of improvements are taking place.

MK Venu: How will the coal controversy affect the target for power generation in the next five years?

I have had detailed discussions with the power producers. I have taken up the issue with the PM. I had meetings with the coal minister and coal secretary. The coal that is not utilised is available with the coal ministry. On the recommendation of the power ministry, we can de-allocate it and in 2013, we can produce 25,000 mw of power. The CAG report has given us a shock. There will not be large-scale cancellations. We have checks and balances in place. Just because coal is allocated to power producers, they cannot utilise it as they like. Before it is taken out, they have to enter into certain agreements. Even while selling the power, they need to get into a competitive bidding process. The power ministry has put up the revised power bidding rules on its website. There is no question of passing on the windfall profit to these people. Even if there is a windfall profit, it will go to the consumer.

Appu Esthose Suresh: There seems to be an increasing trust deficit between the government and CAG. How will this impact policy reforms in the long run?

We think that we have not done anything wrong. We should not be afraid of CAG. With CAG, there is a culture of suspecting everything. A mindset change has to happen in CAG. But it is discharging its duty, it is doing its job.

Dilip Bobb: Is there a need for a major change in policy when it comes to exploitation of natural resources?

After the landmark Supreme Court decision in the Reliance case, it is the law of the land that all natural resources belong to the government. We are adapting, changing. In ultra mega power projects, we have gone through a bidding process. For gas, too, there is a bidding process. There is also a well-defined process for allocating coal. Anything that belongs to the government has to be given through a transparent method. We need to amend the present Act. The Centre only has a supervisory role. So when the states send the proposal for approval, the proposal goes to the screening committee where the state representative is present. Only after it has gone through the screening committee does it go to the minister or to the Prime Minister. Once the screening committee okays it and the state has approved it, if the central minister does not agree with the decision, an ulterior motive is attributed to him. We are not like the judiciary. In judiciary, the judge is supreme. But here, the minister or PM has to go along with the process. This is the limitation one has to work with. The CBI has been asked to investigate cases relating to suppression of facts, with malafide intentions. We have not hidden anything.

Appu Esthose Suresh: Is there a method to the madness of the CAG reports? For the past one-and-a-half years, every CAG report has targeted the government.

CAG suspects everyone. That may be their job. I believe the reform mindset should enter every field of activity?private sector, government or regulator. An organisation like CAG should consider the circumstances and the solutions. Accountability and transparency are important. CAG should come out with constructive solutions.

D K Singh: Given the recent controversy surrounding cartoonist Aseem Trivedi, what is your view on the sedition law?

The sedition law was used by the colonial power. My firm view is that it has to be drastically amended. Today, we have a democracy. You cannot treat our citizens as slaves or subjects of the Crown.

Maneesh Chibber: You were the first minister to say that CAG is overstretching itself, taking upon itself powers that are not given to it, constitutionally. Now many others are saying it. Do you feel vindicated?

There is no question of vindication. If I recollect properly, I said CAG should not deal with policy decisions. I do not think CAG has that power.

Ifrah Mufti (EXIMS): The Mumbai Press Club has asked for the sedition law to be dropped from the penal code. What do you think?

The sedition law will have to be there, but it needs a drastic change. It has to reflect the democratic ethos.

Praveen Raman (EXIMS): There is a feeling that proposed amendments to the RTI Act will dilute it.

Many changes were contemplated, but they were given up. It is not that easy to amend the RTI Act. Our UPA chairman is very serious about not changing the law. It was our initiative to bring in the RTI law.

Ranjeeta Ojha (EXIMS): State governments have been doling out free power to the agricultural sector to win votes. Don?t you think the practice of giving free power to the agricultural sector should stop?

As I said, 25 states have upwardly revised their power tariffs. As far as the farmers are concerned, I do agree with you. Giving free power is not correct. At the same time, they require a lot of support.

Shruti Srivastava: The lenders to Deccan Chronicle Holdings had written to you regarding the mismanagement in the company. So you got an early warning?

Serious malpractices have been reported but I have not received any substantial complaints from anybody. Some top bankers talked to me. I said we have already instructed the Registrar of Companies to make a proper inquiry and send a report to us. I have already said that we would like to expedite the process.

YOGESH RAJPUT (EXIMS*): How do you plan to handle the Koodankulam issue?

Before the nuclear power plant was established there, a lot of consultations were held and there was a very strict, rigorous procedure. All the safety measures have been taken. And now it is already synchronised. There is no question of going back. There are a lot of misconceptions and apprehensions there. Of course, we need to do a lot of advocacy. But years and years of discussions and interactions have gone into this, the problems have been addressed, resolved. Still, there are people who refuse to understand. I don?t think we can convince those people. It has been concluded by experts that the plant is very safe. Now after it has reached this advanced stage, unbundling a project like this is not possible. If you unbundle here, it will also unbundle somewhere else.

Maneesh Chhibber: The monsoon session of Parliament was washed out with the BJP demanding the PM?s resignation. Can you have a system where a political party holds the entire parliament session to ransom?

This is a question of the maturity of democracy itself. Here is a report from CAG. It is not an SC or HC judgment. It has to undergo a certain process for finality. It has to be referred to the PAC. The respective ministries or political parties will then get to give their opinions. For example, the power ministry is going to tell them nothing has gone wrong, there is no question of profit. If any of the allottees of coal blocks have made mistakes, we have the power to cancel the allocation. A person cannot be hanged without being given a proper trial. If the principal of natural justice cannot be understood by a party like the BJP, I am afraid democracy is at peril. They will have to go through these processes. Otherwise, it means they have no faith in the PAC which is presided over by their own senior leader. They have no faith in Parliament. If you are not prepared to avail of that forum, it means you have no faith in the institution of Parliament. Suo motu, BJP or NDA takes the decision to demand the resignation of the PM?it is not done in any democracy.

Sunny Verma: How will you ensure that in the revised power bidding documents, the windfall profit doesn?t go to private companies? Recent reports say many companies have benefited from cheaper coal and higher electricity rates.

I have a revised standard bidding document and a model PPA. Once it is adopted, it will be applicable to even the state sector. All the state regulators will have to adopt this kind of an overarching principle in the development of location-specific power projects on a mandatory transfer basis after the termination of the PPA. Nobody can flout the standard bidding document. Nobody can defraud the consumers. Ultimately, the interest of the consumers will be of utmost importance.

Shobhana Subramanian: What stage has the electricity boards? debt restructuring reached?

The proposal has been circulated. Discussions are over. The ministries concerned have agreed. Now, it has gone directly to the Cabinet.

Aleesha Matharu (EXIMS): You had recently said that you did not feel pessimistic about India?s economic growth. But where does this optimism come from?

I am optimistic even today. We are going to ensure not less that 8% power growth. Our fundamentals are still strong, they have not been eroded. But after the last Budget, certain pessimistic sentiments spread all over the world against India. There were two factors: retrospective tax and the Vodafone case. The other is with regard to GAAR rules. The present finance minister is addressing these issues. Of course, Parliament could not pass many important Bills. We need things like GST and a direct tax code. There are 14 pending Bills which are directly connected to our economic development. But if we tackle the issues of retrospective taxation and GAAR, the pessimism will go away.

The pessimism is transitional. Corruption is a matter of concern. We wanted a progressive Lokpal Bill, but it was not allowed to be passed. The Public Procurement Bill is still stuck. The Whistleblowers? Bill, is stuck. But CBI has been acting on cases of corruption. It has been allowed to act independently. We are not hiding anything. Even on the coal issue, it was referred to the CBI. That shows the attitude and pure mind of the PM. He?s a man of integrity, he does not have anything to hide.

Shishir Tripathi (Exims): What is the long-term solution to the ethnic conflict in Assam?

We cannot find a solution to this overnight. What happened recently was most unfortunate. We have taken positive steps: 30 tribunals have been appointed by the UPA government for registration and verification of foreign nationals. We have also taken steps to fence the borders on the Bangla side. But often, it is not a case of Bangladeshis versus Indians. Many a times it is Indian versus Indian. This is what has happened in the recent incidents. It is more an economic problem than an ethnic one, and that is what needs to be addressed.

Transcribed by Pragya Kaushika & VN Apurva

*EXIMS: Express Institute of Media Studies