In order to create job opportunities in every state, power, coal, RE and mines minister of state (Independent Charge), Piyush Goyal has proposed to states to encourage industry and enterprises and consider new investment and growth opportunities by offering them quality supply of power at an affordable price.
Goyal said electricity can be offered to the industry on a long term basis for 10-15 years and at a fixed cost, even if it comes at a slight escalation. This, he said, will encourage industry to consider new investment opportunities in states, leading to new job creation opportunities.
“Punjab I am told has offered power at Rs 4.99 a unit (fixed price for a period of time) to encourage industry to come and invest in Punjab,” he said in a recent interview to newsd. Other states, he said, are studying this model.
“So our effort to bring down the cost of power across the country is now encouraging states to look at attracting industry thereby resulting in job generation.”
Coal supply is no more an issue in India. From coal shortages, the country is currently sitting on coal surpluses. States can accordingly encourage new investments on the back of sufficient coal supplies and sufficient power at affordable costs.
It is significant to note here that for a country like India, both power and coal shortages are a story of the past. Today in India, power to the tune of 2000-5000 mw is available at any point of time at a price as low as Rs 2.5 a unit. This in itself is a big achievement for the ruling BJP government. Cutting down on India’s coal imports thereby savings billions of dollars of forex outgo every year, state-owned Coal India is in a surplus state of coal production. Most power plants in India have atleast a 20-25 days of coal surplus from a situation of coal shortages or critical coal stocks at power plants.
Besides, the power ministry’s scheme for financial and operational turnaround of states or UDAY, that was formally launched about 9 months back, will help the country save a whopping Rs 1,80,000 crore a year.
“While the loss making state discoms are currently losing about Rs 65,000 -70,000 cr a year, the savings on account of UDAY will, however be double the current losses,” the minister said adding that UDAY can actually help in bring down the cost of power substantially for the end consumers. However, the support of state governments in implementing UDAY is a must as UDAY is not a scheme that has been devised by the Centre for imposing upon the states. It’s a win-win situation for all stakeholders.
As per Goyal, most states (barring 2-3 large states) have already agreed in principal to join UDAY and even with the remaining states, conducive talks are happening to bring them on board. Under UDAY scheme, state governments are allowed to take over one-fourth of the Discom’s outstanding debt in phases.
Early entrants or states like Haryana and Rajasthan, that joined UDAY right in the beginning have already started reaping the benefits of the scheme. The cost of financing as also the cost of power in these two states is on a decline. For instance, Rajasthan government is seriously considering getting a strategic investor in their power generation company in order to help run the company more effectively and efficiently and bring down their power purchase costs.