Losing battle, just cause

The public angst spectacles created by Arvind Kejriwal and his cohorts since the inception of India Against Corruption movement has failed to impress me. In fact your reporter, swimming much against the tide of public sentiments, had expressed scepticism about the commitment and composition of the Jan Lokpal movement which social activist Anna Hazare launched in April 2011.

Much water has since flowed down the Yamuna. The movement peaked in August 2011, when Anna went on a fast in the support of his demands at Ramlila Grounds keeping the government on the tenterhooks. In a complete anti-climax, the fast being undertaken now by Arvind Kejriwal on the issue of inflated power bills has so far been unable to attract either public or media attention.

Finding them emaciated of any ‘real’ public support, the government has not cared to engage them into a discussion. On Monday last when Kejriwal supporters took out a rally in Delhi they were not even allowed anywhere near either the secretariat or the residence of chief minister Sheila Dikshit. What could have been a bigger fall for a group which just about a year-and-half back sat on high table with senior most ministers in the union government discussing promulgation of parliamentary act. In their hour of despair, instead of feeling happy at my analysis coming true about the hollowness of their movement, I am overcome with sadness. Arvind Kejriwal for once has taken up a very just cause, however, people are refusing to trust him having seen him follow the ‘spit and scoot’ kind of agitation all these years.

There is no doubt that the power consumers in the national Capital are being fleeced by the private distribution companies and benefits of the reforms have not accrued to the people. But fortunately for the government, Kejriwal has raised the matter when his credibility among the people has ebbed.     

Some of the issues, which Kejriwal’s current agitation raise needs public and government attention. It must be pointed out that the cost of electricity is calculated not on the number of hours of supply of electricity but on the actual consumption of power. Therefore chief minster Sheila Dikshit’s assertion that one has to pay more for 24x7 supply of electricity doesn’t cut much ice and her logic has rather left people perplexed.

Further justification of the increase in tariff on account of increase in customer base and increase in consumption is again difficult to comprehend. In fact the supply cost of electricity should come down as the customer base increases, as the fixed cost gets amortised over larger number of consumers which should lead to reduction in per capita cost to consumer.Thus the claim made by Kejriwal and also to an extent by the Bharatiya Janata Party (BJP) that the cost of electricity in Delhi is going up due to corruption, inflated capital expenditure, artificially increasing distribution and commercial losses and sale of surplus power calls for an independent enquiry. The very fact that the privately-controlled distribution companies (DISCOMs) have been opposing an independent audit by the Comptroller and Auditor General (CAG) leads to the suspicion that their books may have been cooked to make increased profit.

The revenue gap of Rs 19,000 crores, which has been calculated by Delhi Electricity Regulatory Commission (DERC) is based on data provided by DISCOMs. The conclusion made by the distribution companies is questionable as no independent body like the CAG has carried out any audit of DISCOMs. The audit done by private auditors is not reliable as some of these auditors went onto become consultant to DERC as well, in clear conflict of interest.

Those in support of Kejriwal also point out that according to the CERC annual report 2010-2011, the weighted cost of generation of electricity varied from Rs 1.67 per unit (pit head generating stations) to Rs 2.82 per unit. This went up marginally in last two years from five to eight percent. However, in the name of increased generation cost, power tariff in Delhi has witnessed more than 65 per cent hike. The government would find it difficult to justify this and, as mentioned earlier, they are fortunate that not many people today believe Kejriwal. On the other hand states like Gujarat have just witnessed a hike of five percent in the tariff for the same period.

Delhi’s power tariff structure measures unfavourably when also compared with states of national capital region like Haryana and Uttar Pradesh. As per tariff order issued by Uttar Pradesh Electricity Regulatory Commission in June last year, power consumption was to be charged at the rate of Rs 3.45 per unit upto 200 units and Rs 3.80 per unit from 201 units onwards. UP has fixed these rates when the distribution, transmission and commercial losses have been pegged at 55 percent.

In Haryana the rates are Rs 2.70 per unit for first 40 units, Rs 4.50 per unit up to next 250 units and Rs 5.25 per unit for next 400 units and Rs 5.60 per unit for consumption beyond 400 units. These rates are being charged when the losses are estimated to be 45 %. In both Haryana and Uttar Pradesh, the regulatory bodies are focussing on reducing losses rather than increasing tariff.

In Delhi, the losses are only12 to 15 percent and yet the tariffs are much higher in different slabs. This raises a big question mark over the efficient government or public control over the profit-making tendency of the private distribution companies. Dikshit government would need to come out with a more convincing explanation on the matter.

Sidharth Mishra is with Centre for Reforms, Development & Justice, and is Consulting Editor, Millennium Post