The ongoing advertisement galore by Delhi’s Aam Admi Party (AAP) under Chief Minister Arvind Kejriwal, coming ahead of the forthcoming MCD elections in the country’s capital of New Delhi, is mired with some major factual inaccuracies and something that may fail to impress the people of Delhi.
In its series of advertisements, the AAP boasts of its achievement on “providing cheap electricity” and without allowing a hike in power tariffs.
Let’s examine the issue more closely. The Delhi government has allocated Rs 1600 crore in Budget 2016-17 for providing subsidy on power bills.
As a result of this subsidy, consumers are getting 50% rebate on power tariff for consumption upto 400 units.
To put it simply, instead of taking the reforms route to bring down power tariffs, the Delhi government decided to choose an easy way out by using public funds to dole out subsidies and keep power cheaper.
So the money being used to subsidies power tariff is people’s own money which the state government could have used for other social schemes.
The Rs 1600 crore allocated for subsidising power is not a small amount and is more than8 times that has been allocated for a Smart City i.e. Rs. 196 Cr.
Subsidies on power are more than one third the total budget allocated for Medical & Public health and nearly 20% of the total budget allocated for Education.
With this reality, Mr Kejriwal alone can explain how he plans to turn Delhi into London, his latest promise.
In contrast, most other states are taking the reforms route to lower the tariffs. For instance, in Punjab for the initial 200 units, the state has reduced tariff by 9.2% in 2015-16 in comparison to previous year.
Similarly J&K has reduced tariff by 7% in 2015-16 in comparison to previous year. On the contrary, thanks to AAP’s vision, the tariff in Delhi has remained unchanged in 2015-16. The DERC is headless and there is no fear or pressure on the state to do so.
And talking of AAP’s claims on “providing cheapest electricity”, it is significant to point here that Delhi businessmen are virtually forced to pay high rates. In Delhi, tariff for commercial, Agriculture, Industrial HT & LT consumers is significantly higher than many other states.
A look at Tariffs for Commercial category in Delhi shows that it is the third highest in the country or nearly 20% higher than the All India average tariff. When compared to other states, this is nearly double in comparison to Goa, Haryana, Jharkhand, Gujarat etc.
Then the tariff for Industrial HT category in Delhi is the second highest in the country or 21% higher than the All India average tariff. It is again significantly higher in comparison to states of Jharkhand, Haryana, Goa, J&K, Chattisgarh, Gujarat etc.
A look at the tariffs for Industrial LT category in Delhi, no prizes for guessing but it is the highest in the country and when compared to the All India average tariff, it is 36% higher and considerably higher in comparison to states Jharkhand, Haryana, Goa, J&K, Chattisgarh, Gujarat etc.
Delhi is one of the few states in India where distribution is privatised. However, by subsiding power tariffs and doling out Rs 1600 crores towards it, the state government is not disturbing the profits of private distribution companies who are supplying power in Delhi. They are getting their money as it is the state exchequer that is doling out public funds, a clear burden on the taxpayer.
Bringing down power tariffs through subsidies is by no standards an achievement of any sort.
Asked to comment, a Delhi government official said, “Last week, the DERC floated tenders to appoint consultants to review the capital expenditure, capitalisation, distribution network and conduct physical verification of assets of the three discoms in the city — BRPL (BSES Rajdhani Power Limited), BYPL (BSES Yamuna) and TPDDL (Tata Power Delhi Distribution Limited).”
While it remains to be to be seen how the audit of private DISCOMs by the quasi-judicial body, DERC progresses in the absence of a head but it is time to remind AAP of its earlier pre-poll promise to reduce power tariffs through audit of DISCOMs and bringing in efficiency parameters.