Electricity Bill ensures undue profits to private sector, weakens government sector

By Bharat Dogra
There are increasing demands from many sides that the amendment of Electricity Act 2003 which the union government has been trying to push ahead for some time should not be passed in a hurry. It has been discussed that the government is likely to introduce the Electricity (Amendment) Bill 2022 in the Monsoon Session of the Parliament.
A reference point given for this is that when the Electricity Bill 2001 was ready, this was sent to the Standing Committee on Power Affairs of Parliament and there was extensive discussion with all stakeholders for nearly two years before the bill was passed in the form of Electricity Act 2003 (which is now sought to be amended).
As the amendments sought to be introduced now are very controversial ones, demand for similar extensive discussions with all stakeholders is being increasingly voiced.
As electricity is in the concurrent list there is need for better consultation with state governments instead of centralizing too much authority. The tendency to push states along the lines preferred by the central authorities by imposing conditions or exerting pressure should be given up so that their real views can be articulated and heard more freely. Important professional bodies such as the All India Power Engineers Federation which have been very vocal on this issue should also be given a proper hearing as the dialogue with such organizations known for their well-informed and constructive engagement on the issues relating to this important sector has been beneficial in the past.
There have been important problems in the power sector in the recent past and it has been widely commented that the artificial coal shortages which disrupted power supply over wide areas could have been easily avoided. What is more, this led to increased pressures from the union government to import very costly coal, increasing the financial burden in several states while some crony capitalists linked to coal import made big gains.
To avoid such heavy costs for the country, state electricity sectors should be free from pressures of an over-centralized system and the entire system should become much more transparent to protect public interests while preventing undue and windfall gains to narrow interests.
However the amendments being contemplated now take us in the opposite direction of ensuring undue profits for private sector while weakening the government sector which is meant to serve the people particularly the weaker and more vulnerable sections. The amendments are likely to make available to private players the networks of government companies to create which they have invested vast amounts of money at a very low cost. These will be then used by private companies to supply power to most profitable customers such as big industries. The government companies will be left with commitment of supplying to all, particularly weaker sections which need low cost supply. Hence private companies catering to only highly profitable customers will make big profits while government companies will sink into losses. At present they are able to recover the losses of supplying at low rates to weaker sections from supplies to big customers but such profitable customers will be lured away by private companies who can provide better service due to their ability to use networks which were created by the investments of others.
In due course of time this will also cause additional financial burden on state governments as after all they have to keep their companies going despite their losses due to their crucial public role. Loss making government companies will not be able to serve weaker and vulnerable sections and this in turn will lead to important social priorities being neglected.
It is in this context that opposition of several farmers’ organizations should be considered. They had earlier raised opposition to the efforts being made for such amendments even at the time of the big mobilization of farmers in 2020. More recently also they have been saying that the government should follow its promise of widespread consultation on this issues.
This is an advice which the government will do well to follow, apart from making the entire process of amendment very transparent and making very clear the reasons and justification for the amendments it is trying to push.
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The writer is Honorary Convener, Campaign to Save Earth Now. His recent books include ‘A Day in 2071’, ‘Planet in Peril’ and ‘Man over Machine’

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