The government said in newspaper advertisements in favour of privatization that this will provide customers with quality of service, efficiency, rural income, agricultural productivity, immediate resolution of complaints, reliability, digital service, industrial development in rural areas and 24 hours 7 days electricity service. Regarding these claims, electricity employees say that as far as digital service etc. are concerned, facilities like fault registration, 1912 call center, Vidyut mobile consumer app etc. are still in place. Privatization will cause great harm to rural income and agricultural productivity. The facilities that farmers are getting today like subsidy or free electricity for irrigation and separate rural feeders and agricultural feeders for cheap electricity, all this will end. Consumers will be forced to buy very expensive electricity. Even before privatization, the government has proposed to increase the price of electricity, so that the companies can make immense profits after privatization. As far as line loss is concerned, the employees have said with figures that line loss in the private sector is more than in the government sector. Electricity employees also say that the truth of the talk of privatization based on losses is that at present the total loss of the Power Corporation is 1 lakh 18000 crores, while the outstanding as per 2023-24 is 1 lakh 15000 crores. In this too, the biggest outstanding is of government departments and big businessmen, whose recovery will reduce the deficit. Also, the subsidy money that the government is giving right now under its constitutional obligations has also been included in the loss, which is absolutely wrong.

It is a matter of quality, efficiency, responsibility and reliability of service by the private sector. In this context, the recent plane crash in Ahmedabad is a living example of this. Where such a terrible destruction happened after Air India, run by the Government of India, was handed over to the Tata Group. Ambani’s Jio mobile network is also an example for the advocates of privatization. It was expanded by ruining the government BSNL. This company, which started its business by giving free network, is today fixing arbitrary tariffs. Now, despite the threat to the security of the country, Jio and Bharti Group’s Airtel have signed an agreement with American capitalist Elon Musk’s company Starlink.

Actually, the BJP-RSS government is helping a few capital houses to loot the country’s natural resources, public property, economic sources and labour force. Modi and Yogi’s government is also engaged in handing over the electricity department of Uttar Pradesh to a few capital houses of Gujarat. As is reported, companies like Tata, Adani and Torrent Power are engaged in buying Purvanchal and Dakshinanchal Vidyut Vitran Nigam. It is also true that whenever the BJP government has come to power in the country and the states, the privatization of the power sector has increased. During the Atal government, Enron had signed a power deal in which national interests were put at stake. The Electricity Act 2003, which opened the way for privatization at the national level, was passed during the BJP rule, and the division of the electricity board in Uttar Pradesh. Now the Modi government has come up with the Electricity Amendment Bill, which will end the system of subsidy and cross subsidy. According to an estimate, farmers will have to pay Rs 10,000 per month for irrigation connections of 7.5 horsepower. This will badly affect agricultural productivity. Not only this, the situation is so bad that Grant Thornton Company, which gave a false affidavit in America and was punished, was appointed as a transaction consultant against the rules, whose proposals have also been returned by the Electricity Regulatory Commission with objections.

In this privatization also, a big loot of government property is being carried out. According to the employees organizations, the Dakshinchal and Purvanchal Discoms, whose privatization has been announced, have works worth Rs. 42,968 crores going on in the Redeveloped Distribution Area Improvement Scheme. Also, under the business plan, works worth thousands of crores of rupees have been done and are still going on in Purvanchal and Dakshinchal. This money being spent from the government treasury made from the taxpayer’s money will be handed over to corporate companies for free. Not only this, there is an attempt to sell all the property and capital that the Discoms have for a pittance. This is the reason why no one is being told anything about the e-tender of these Discoms. Even rejecting the policy of transparency, information about this will not be available online because the government has put a condition that only those who participate in this tender process will be able to know about these tenders.

In fact, this privatization being done by the BJP government is against national interests, it is very important to make a political issue and to run a big dialogue campaign to alert the general public about the harm caused by it. Till now, only the top bureaucrats of the electricity department are being targeted by the employees organizations in the movement, which is not enough. There is a need to broaden the anti-privatization movement. Not only the Vidyut Karamchari Joint Sangharsh Samiti, but going beyond this, an anti-privatization platform should be formed for its leadership center. There is an immediate need to include anti-privatization parties, farmers’ organizations, various labour and employee organizations, student-youth organizations, environmentalists, civil society and people from the enlightened class in it.

Today electricity will come under the fundamental right of the common citizen. The dignity of the individual has been talked about in the Preamble of the Constitution and in Article 21 it is considered the responsibility of the government to ensure a dignified life. Today electricity is an essential condition for providing a dignified life to any citizen. Therefore, the decision of privatization is against the constitutional obligations of the state. There should also be a consideration of intervention in the court on this.

The kind of repression and oppression the government is doing and the constant restrictions are being imposed on leaders through the courts. There is a need to think about the form and methods of the movement as well. The birth and functioning of the trade union was in the era of the welfare state. Where the industrial capitalist system, terrorized by the rule of workers, adopted the welfare form of the system. Many rights were given in this era. Today the era has changed, this is the era of finance capital where the government and government institutions have become agents of a few capital houses. Now the entire government has moved towards a system of autocracy for the benefit and protection of these capital houses. Continuous attacks are being made on democratic rights and restrictions are being imposed on democratic activities. In such a situation, forms of movement like strike or work boycott are not very relevant in today’s era. Therefore, constitutional peaceful democratic methods of movement will have to be considered. Support of various sections of the society will have to be gained in favour of the anti-privatization movement through fasting and indefinite dharna. Above all, the ongoing movement against privatization has to be turned into a political movement and a big public dialogue needs to be conducted on this. Only when the people of the entire state stand up against it, the government will be forced to take back its steps on this.

Courtesy: Counter Currents

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Respected Chief Minister,

At the recent Niti Ayog meeting, the Prime Minister (PM) is reported to have said that “India’s federal structure and cooperative federalism emerged as a model for the world during Covid crisis” (https://www.hindustantimes.com/india-news/indias-federal-structure-became-role-model-covid-19-pm-modi-niti-aayog-meeting-101659873302169.html).

While the sentiment underlying the statement is commendable, it is important that it is translated into tangible action in all respects.

In the past, I had addressed you through a series of letters about the areas in which the Centre took unilateral decisions without consulting the States, despite the fact that such decisions had the effect of impinging on the States’ economy and their governance, and the necessity that the States should come together on a common platform to take up such matters collectively, so as to persuade the Centre to respect the lakshman rekha of federalism.

You are aware of how the Centre, without consulting the major stakeholders, namely, the States and the farming community, had rushed into enacting three contentious farm legislations and proposed a Bill to amend the Electricity Act of 2003, which would have hurt the farmers’ interests, as also the finances of the State power utilities and the interests of the electricity consumers. The Centre had to revoke those laws eventually, when the farmers across several States protested vehemently. At that time, the Centre had assured the States and the farmers that it would hold prior consultations with them before acting on those legislative measures in the future.

In my last letter dated 23-7-2022 addressed to you (thttps://countercurrents.org/2022/07/letter-to-the-state-chief-ministers-come-together-on-electricity-and-msp/), I expressed my apprehension that the Centre could renege on its assurance to the States and re-introduce the electricity Bill in the ensuing monsoon session of the Parliament, in which case, some of the regressive provisions of that Bill would become a reality, including the entry of profiteering private companies in remunerative distribution segments, mandatory absorption of expensive renewable energy, dis-continuance of cross-subsidisation etc., imposing heavy costs on the State utilities, resulting in higher electricity tariffs, which in turn would hurt the interests of the consumers, especially the farmers, the small business enterprises and the low-income households.

As expected, the Centre has since tabled the Bill to amend the Electricity Act, 2003, without consulting the States, the farmers associations, the other consumer groups, the utility employees and so on. Surprisingly, the Centre has also come up with a second Bill, proposing amendments to the Electricity Conservation Act of 2001, which also incorporates several regressive provisions that impose a heavy cost burden on the State power utilities. Apparently, the provocation for this is the commitment that the PM had given at the 26th UN Climate Change Conference of the Parties at Glasgow in October-November, 2021 (COP26), which have forced the government to mandate overly ambitious targets to be achieved by India for transiting from coal-based electricity to renewables, mostly solar photo-electric (PV) energy.

So far, India’s efforts in promoting solar PV electricity have their focus on large centralised solar generation plants, predominantly owned and controlled by private corporate entities, based on long-term Power Purchase Agreements (PPAs). Such plants operate at low capacity utilisation levels as they depend critically on solar radiation available on cloud-free days. They appropriate large tracts of land. Transmission of electricity from the centralised solar plants to the consumers involves significant technical losses.

While the unit costs of PV electricity have been on decline due to technological improvements, the long-term PPAs with the solar plant promoters do not permit such improvements to be factored in and the corresponding tariff benefit passed on to the consumers. While several States had made attempts to renegotiate the PPAs for the benefit of the consumers, the Bill that amends the 2003 Electricity Act has a provision to tie the hands of the States in that respect, as if to benefit the private promoters of the solar plants.

It is doubtful as to how long the present trend of declining unit PV costs would continue, as there is a near monopoly in the hands of a few overseas companies on the basic raw materials used in solar PV panels and one cannot rule out the possibility of the unit costs showing an upward trend in the near future. Such monopolies could also create uncertainties in the supply line for solar PV manufacture.

Also, large scale dependence of the electricity supply system on solar energy, as is being planned by the Centre, will pose problems for grid stability, as being witnessed in Australia and a few other countries. It is coal-based electricity generation in India that has so far facilitated grid stability.

The Bill amending the 2003 Act has provisions that mandate compulsory absorption of solar and other renewable forms of energy by the State utilities, irrespective of the costs, which implies that a State power utility would be precluded from drawing less expensive forms of energy, merely to comply with such an externally imposed mandate, to the cost of their own finances and to the detriment of the consumers’ interests.

As if this is not enough trouble for the State utilities, the Bill also imposes constraints on them, in terms of payment security verification by the load despatch centres, coming in the way of the merit-order despatch system administered by the latter, though the financial problems faced by the State power utilities are partly contributed by Central agencies and the Centre seems to ignore that fact conveniently.

For example, during last year and more recently during the current year, when acute coal shortages arose as a result of Centre’s mismanagement of domestic coal supplies, the Centre had conveniently passed on the blame to the States, forcing them to import coal at exorbitant prices, a measure seen by many as a ploy to grant undue benefits to domestic private business houses who supply coal from their overseas mines. The Centre is yet to compensate the States for the additional costs on imports.

The second Bill, which seeks to amend the Electricity Conservation Act of 2001, to some extent, reinforces the mandatory requirement that the State power utilities should absorb electricity supplied from renewable sources but it also lays down a tight time scale for escalating the minimum threshold levels for such mandatory drawal of renewable energy, presumably in line with the goals committed by the PM at Glasgow. What should cause concern to the States is that the Centre should impose such a regressive mandate without caring to analyse the cost implications of it and how it would cripple the finances of the already debt-burdened State utilities. The resultant tariff escalation would hurt the electricity consumers in the States and would also have adverse implications for the economy of the States.

It is not the Centre, but the States that stand accountable to the consumers in their respective areas.

There are other provisions of the two electricity Bills which are equally regressive and the States may get them examined in detail. Some of us could provide inputs, if needed.

Had the Centre held consultations with the States well in advance of the Glasgow conference on the technological and financial implications of the use of renewable energy, the mechanisms that should exist in place for the State utilities and the consumers to be compensated for the additional costs, if any, and the ways and means of the Centre helping the States in making a smooth transition to renewable energy, the Centre would have been able to evolve a domestic consensus on the basis of which it could have made implementable commitments at the UN COP26.

After all, the term “cooperative federalism” referred by the PM at the recent Niti Ayog meeting represents such consensus building in consultation with the States.

In principle, it is unacceptable that, in a federal set up like ours, the Centre should unilaterally take decisions that weaken the hands of the States in the matter of governance, impose schemes that may not fit into the State’s own development priorities and cast statutory obligations that impose costs on the States. The two Bills now tabled in the Parliament, one to amend the 2003 Electricity Act and the second to amend the 2001 Electricity Conservation Act amount to such an imposition. Had the Centre been more sensitive to the spirit of federalism, it would have prepared analytical papers on the technical and the financial implications of the proposed legislative measures and circulated them in advance to the States for eliciting their views.

Against the above background, I would once again appeal to you to bring this up collectively on behalf of a “Federal Front” to persuade the Centre not to overstep the lakshman rekha of federalism and hold meaningful prior consultations with the States and the other stakeholders, before proceeding further on these two Bills.

In the federal scheme of governance provided in the Constitution, the subjects to be dealt with by the Centre exclusively, those by the States exclusively and those concurrently by the Centre and the States stand well defined. In principle, the States which are nearer the people in terms of governance and, therefore, better placed to understand their needs, should have a greater say in decision making in matters that concern the people. In the recent times, in the name of several Central and Centrally Sponsored Schemes (CSSs), the Centre has been intruding into the domain of the States and resorting to direct transfer of cash assistance to the beneficiaries through the banking system, bypassing the States and the local bodies. During the last few years, there has also been a shift away from capacity building assistance under the CSSs towards direct cash assistance, which tends to push the beneficiaries into dependence on Centre’s munificince rather than being empowered to be self-reliant. These are disturbing trends that need to be discouraged.

I earnestly hope that you will take up such issues collectively in the coming days.

Regards,

Yours sincerely,

E A S Sarma

Visakhapatnam

Former Secretary to Government of India

Courtesy: https://countercurrents.org

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