From being called as ‘anti-people’ to ‘not in the interest of the country’, the electricity amendment bill-2021 has already been critiqued with words. The electricity amendment bill 2021 announced by the Finance Minister Nirmala Sitharam in the union budget has come under heavy fire and opposition from the states even before it has been introduced in the assembly. With Shiv Sena MP Sanjay Raut and West Bengal Chief Minister Mamata Banerjee have voiced their concerns over the bill yet to be brought before the Parliament. So, what is this bill, which is creating havoc even before getting a proper initiation?
The main aim
of the bill is to de-license power distribution, which would allow private
sector players to enter this field and compete with state-owned power
distribution companies (discoms). This will provide the consumers with a choice
among the power distribution companies. Finance Minister Nirmala Sitharaman had
said that the government would bring a framework to allow consumers to choose between
power distributions companies, according to The Indian Express.
State owned
distribution companies have a strong hold on the power distribution in most of
states across India with few exceptional cities like Delhi, Mumbai and
Ahmedabad.
At present,
discoms are toiling with proliferating level of loses and debts. To reduce
their burdens, the government has decided to shortlist couple of schemes to
restructure the outstanding debts of discoms while encouraging them to reduce
losses. This however, brought only short term relief in terms of financial spaces
for discoms that continued to amass losses and debts post restructuring schemes
such as the UDAY scheme an initiative launched by the union government in 2015.
The states
are opposing this bill as they are concerned about the biased distribution of energy
by these private players, who might provide power to only commercial and
industrial consumers and not residential and agricultural consumers. Power
tariffs across India, today, vary vastly with commercial and industrial players
cross subside the power consumption of rural residential consumers and
agricultural consumers by paying far higher tariffs.
Mamata
Banerjee in her letter to PM addressing this issue states that the amendment
would lead to “a concentration of private, profit-focussed utility players in
the lucrative urban-industrial segments while poor and rural consumers would be
left to be tended by public sector discoms.”
“How is it
possible for discoms to continue to operate if all their industrial commercials
are taken over by the private sector?,” said an expert stated adding that earlier
plans to introduce private sector players had also envisaged a gradual
reduction in cross-subsidy levels which have not materialized as reported by The Indian Express.
Some other pertinent
points that are voiced by the state governments are higher penalties for
failure to meet Renewable energy Purchase Obligations (RPOs) and the
requirement that Regional Load Dispatch Centres and State Load Dispatch Centres
follow instructions by the National Load Dispatch Centre.
In her
letter to the PM, Mamata Banerjee has requested “to
ensure that a broad-based and transparent dialogue on the subject is opened up
at the earliest”.
