In the 2019 Union Budget presented today, Finance Minister Nirmala Sitharaman brought into focus India’s current power situation and underlined the steps the government has taken to solve the sector’s problems.
The Finance minister shed light on the plan on “one nation one grid” for affordable power to states. She said the much-needed power reforms — such as the power tariff reform — should be soon taken up.
The Saubhagya – ‘Pradhan Mantri Sahaj Bijli Har Ghar Yojana’ — scheme was launched by Prime Minister Narendra Modi in September 2017 to achieve household electrification by providing las-tmile connectivity and electricity connections to all households in rural and urban areas.
The stated objective of the scheme was to provide free connections to the poor and at very low cost to others.
The government had initially targeted March 31, 2019 as the deadline for taking electricity lines to all households. It later announced that the target would be met three months earlier, by December 31.
The government’s Saubhagya dashboard shows that as of today, the 100% electrification target has been met in all states barring Chhattisgarh — where power penetration currently stands at 99.67%.
This remarkable feat meant that the total global population without access to electricity fell below 1 billion for the first ever time, as per the World Energy Outlook 2018.
Data showed that under the scheme, nearly seven lakh houses were electrified every week on an average. Work in some places was delayed due to things like legal tussle over tender, polls and Naxalism-related issues.
A statement issued by the government said that Uttar Pradesh — the state that accounted for nearly half of the targeted beneficiaries — has achieved 100% electrification.
According to power and renewable energy minister RK Singh, now that all Indian households have been electrified, the new government’s focus is on providing round-the clock electricity at affordable rates.
Piyush Goyal had announced in the interim budget: “Till the year 2014, about 2.5 crore families were forced to live the life of 18th century without electricity. Under Saubhagya Yojna, we provided free electricity connection to almost every household. By March 2019, all willing families will get electricity connection. In mission mode, we have provided 143 crore LED bulbs with the participation of the private sector. This has resulted in a savings of approximately Rs 50,000 crore per year in electricity bills for poor and middle class families.”
Experts say that the newly connected homes will create fresh demand from the country’s rural areas, leading to growth in power demand within a year.
Late last year, the International Energy Agency (IEA) had hailed Saubhagya as one of the greatest success stories in the world of the year. Power in every village will spur productivity that boosts economic well-being, and can speed up innovation that can boost micro businesses, farm yields and help growth of schools, banks and medical services, the global energy watchdog had said.
“India’s success, in electrifying all village households, is far more noteworthy given the large population, distances, and low affordability, the IEA had noted.
As per Central Electricity Authority estimates, total power generation (thermal, hydel and nuclear combined) is expected to grow 6.5% this fiscal — almost double of last year’s 3.5% growth). Total generation is likely to be around 1,330 billion in 2019-20, of which 85% would be thermal.
Among thermal plants, coal would contribute around 79%, while the rest would come from lignite, natural gas and liquid fuels. Nuclear plants would contribute 3.3%, while hydropower would account for 10%.
Meanwhile, discoms — hard beset by unpaid dues and lagging reforms — have continued to suffer. Latest reports show that UDAY (Ujjwal Discom Assurance Yojana), the Centre’s ambitious plan for resuscitating distribution utilities, has failed to make much headway. A Niti Aayog review of the plan just revealed that government departments and local bodies have run up electricity bills of Rs 41,386 crore in the first nine months of 2018-19.
Unpaid big bills like these have hugely hit operations of discoms in areas such as cash flow and capability. Other persisting issues like inadequate tariff revision and delayed subsidy have compounded their woes.
It has made it very difficult for independent power plants to service their loans timely, leaving many of them on the verge of becoming NPAs.