PM targets ‘culture of subsidies’, asks states to clear power dues

Addressing the closing ceremony of ‘Ujjwal Bharat Ujjwal Bhavishya - Power @2047’ programme, the PM wondered that if the common man could pay their electricity dues regularly, why states did not

Prime Minister Narendra Modi on Saturday asked the states to clear dues of power utilities amounting to ₹2.5 lakh crore, and termed the culture of subsidies as “a serious disorder” in Indian politics. He also flagged the “lack of investment” by the states in reducing transmission and distribution losses in their energy systems.

**EDS: HANDOUT PHOTO MADE AVAILABLE FROM PIB ON SATURDAY, JULY 30, 2022** New Delhi: Prime Minister Narendra Modi during the Grand Finale marking the culmination of the ‘Ujjwal Bharat Ujjwal Bhavishya – Power @2047’ programme, through a video conference, in New Delhi. (PTI Photo)(PTI07_30_2022_000290B) (PTI)

“People will be surprised to know that different states have outstanding dues of over ₹1 lakh crore. They have to give this money to power gencos (generation companies). Power distribution companies (discoms) are owed more than ₹60,000 crore. These companies are unable to get even the money committed for subsidy on electricity in different states. This arrear is also more than ₹75,000 crore,” Modi said. “About ₹2.5 lakh crore owed to those responsible for activities ranging from the generation of electricity to the door-to-door delivery is trapped.”

Addressing the closing ceremony of ‘Ujjwal Bharat Ujjwal Bhavishya - Power @2047’ programme virtually, the Prime Minister also wondered that if the common man could pay their electricity dues regularly, why was it that some states failed in paying theirs.

“I request the states whose dues are pending to clear them as soon as possible. I want to remind all the stakeholders that the health of the electricity sector is everyone’s responsibility,” he said.

The PM’s comments come at a time when India has been battling a severe coal crisis, resulting in critical stocks at domestic thermal power plants. Since March, the power ministry, from time to time, has asked states to ensure basic payment discipline to Coal India Limited (CIL), gencos and discoms to ensure continuous electricity generation.

The comments also come in the backdrop of the Aam Aadmi Party (AAP) announcing to replicate its Delhi model of ‘free electricity’ to low consumption users in poll-bound Gujarat and Himachal Pradesh, both being ruled by the Bharatiya Janata Party (BJP). The AAP first launched the large-scale power subsidy scheme in Delhi after it came to power in 2015. According to the Delhi government estimates, the scheme benefits 86.6% of the domestic consumers. The scheme has now been implemented in Punjab after the Arvind Kejriwal-led party won the assembly elections in the bordering state earlier this year.

Several political parties, including the BJP and the Congress, have also made similar poll promises in the lead-up to various state elections.

According to the power ministry data, seen by HT, as of June 30, Delhi owed a negligible amount of about ₹3 crore to gencos, while the same for Maharashtra stood at ₹21,565 crore and Tamil Nadu ₹20,990 crore. Besides, discoms have a huge amount pending as subsidy from states under various schemes. The Congress-ruled Rajasthan has the outstanding dues worth ₹15,597 crore, while Punjab owed ₹9,020 crore to discoms for power subsidies and Maharashtra ₹3,399 crore.

Referring to the trend of offering subsidies on electricity bills, Modi said, “With the passage of time, a serious disorder has come into our politics... This strategy may sound like good politics in the short term. But it is like postponing today’s challenges for tomorrow, for our future generations. This thought process has pushed the power sector in many states into huge problems.”

The Prime Minister said losses in India’s power distribution sector are in double digits, whereas in developed countries across the world, it is in single digit. “This means we have a lot of wastage of electricity and therefore we have to generate more electricity than we actually need to meet the demand. There is a lack of investment in reducing distribution and transmission losses in many states,” he said.

Earlier, speaking at the inauguration of the Bundelkhand Expressway in Uttar Pradesh on July 16, Modi cautioned people against those who try to attract votes by distributing ‘free revadis’ (freebies) and said the practice was harmful for the country and has to be wiped out from politics. To this, Delhi chief minister and AAP national convener Arvind Kejriwal said giving people free services such as electricity, water and health was not freebies.

“To give free education to the country’s children, to give free healthcare to the needy is not ‘free ki revadi’. We are laying the foundation of a developed country… this should have happened 75 years ago. Free ki revadi is when politicians write off thousands of crores of loans to help their friends and broker tenders for a select group of capitalists from foreign governments,” Kejriwal had said.

On Saturday, Modi also launched the Revamped Distribution Sector Scheme with an outlay of over ₹3 lakh crore over a period of five years from FY 2021-22 to FY 2025-26. The scheme aims at providing financial assistance to discoms for modernisation and strengthening of distribution infrastructure, focusing on the improvement of the reliability and quality of supply to end consumers.

Modi also laid the foundation stone of green energy projects of NTPC such as the Green Hydrogen Mobility Project, which is a pilot project for five fuel-cell buses to be run on green hydrogen in and around Leh in the Union territory of Ladakh. The second is the Green Hydrogen Blending Pilot Project at NTPC’s Kawas Township, which will be India’s first Green Hydrogen Blending Project aimed to help reduce the usage of natural gas. He also launched the National Solar rooftop portal.