New Delhi: Power Minister RK Singh has warned of a debt trap for states like Punjab that use borrowed money to provide free power, saying such populist schemes are okay only if the state has the finances.
Electricity, like any other commodity, has a cost involved in its production, and if a state has to provide it for free to a section of consumers, it also needs finance to pay the production utility. If the generating utility is paid, the electricity will not be produced in the first place.
In an interview with PTI, Singh said that he has been telling the states that electricity is not free. “If a state wants to give free electricity to any category of people then they can go ahead and do so, but you have to pay for it”. However, states with already high debt are less likely to resort to such populist measures. forcing them to borrow more to pay production utilities, resulting in a debt trap.The minister said, "You should not bring your state to a situation where it gets trapped in the debt trap. Many states have got trapped in the debt trap because of free facilities."
Asked to name states that have done so, the bureaucrat-turned-politician said, for example, Punjab. Since coming to power in Punjab in 2022, the Aam Aadmi Party (AAP) government has taken several populist steps, including 300 units per household. Includes free electricity.
Punjab borrowed Rs 47,000 crore in the first two years of the AA government, adding to the state's already huge debt. It has strained finances where a large portion of the tax revenue earned goes into paying the interest and principal of previous borrowings."Many of these states are close to falling into a debt trap," Singh said, adding that states are borrowing to give freebies so that they can remain in power and the burden is being passed on to future generations. Used to be.
He said there would be no money to build roads, hospitals and schools for future generations because whatever revenue would come would go to repaying the debt.
When asked to give examples, he said, "For example, Punjab. Many of these states are trapped in debt trap." On electricity theft, he said, "AT&C (Total Technical and Commercial Losses) losses are 27%. Used to be a percentage.Today it is 15 percent, no one thought this would be possible. I've done it by a combination of various measures, incentives, legal penalties, everything".
He also said that he wants to reduce it (AT&T loss) further to about 10-12 percent.
Singh also said that many states had outstanding dues of Rs 20-30 thousand crore, which have been reduced. "Therefore, I made monthly installments (for repayment of outstanding dues) in the rule itself," he said. As a result, Current outstanding as on date, outstanding has reduced from Rs 1.45 lakh crore to Rs 40,000 crore.,
Asked about providing choice of multiple service providers to consumers, the minister promised to make necessary amendments in the Electricity Act 2003.
The minister introduced the Electricity (Amendment) Bill, 2022 for this purpose in the Lok Sabha on August 8, 2022, which was referred to the Standing Committee for scrutiny on the same day. The committee has not given its report on the bill. But since the bill was introduced in the Lok Sabha, the new government will have to introduce it again.
“I will reintroduce it. So, what will happen (if the bill is passed) will be competition, and better services. The regulator will fix the maximum price.If someone (operator) asks for Rs 4 per unit and Rs 3.5 per unit, you will prefer that (Rs 3.5).
"So, we moved the amendment. It went to the committee. It is there. I will have to move it again," Singh said. On the ambitious renewable energy target of 500 GW by 2030, he said India will miss the target. will achieve and has already locked in about 360 GW of renewable energy, including 190 GW of operational capacity."...My installed capacity of RE is around 190 GW, I have 103 GW under construction, which makes it 290 GW. I have 72 GW under bidding. So, I am already around 360 GW. I am at the time As I reach all my goals,” said the minister.
Responding to a question about his top priorities if the BJP-led government wins the general elections and he becomes power minister again, Singh said his priority at the moment is to add more capacity as quickly as possible. He said , “I think my demand will double by 2030.Imagine that in a country like ours the demand will increase from 243 GW to about 400 GW by 2032. I think I'll be a little bit more than that."
Regarding the planned addition of 80 GW more coal-fired thermal power capacity, H said, "I am not going to compromise on the availability of electricity. There is a lot of solar power right now, but at night you don't have solar power. So, at night, you don't get electricity. In the morning and evening the wind doesn't blow...sometimes".He also said that phasing out coal-based thermal power generation capacity requires viable storage as it is essential for round-the-clock renewable energy.
Electricity, like any other commodity, has a cost involved in its production, and if a state has to provide it for free to a section of consumers, it also needs finance to pay the production utility. If the generating utility is paid, the electricity will not be produced in the first place.
In an interview with PTI, Singh said that he has been telling the states that electricity is not free. “If a state wants to give free electricity to any category of people then they can go ahead and do so, but you have to pay for it”. However, states with already high debt are less likely to resort to such populist measures. forcing them to borrow more to pay production utilities, resulting in a debt trap.The minister said, "You should not bring your state to a situation where it gets trapped in the debt trap. Many states have got trapped in the debt trap because of free facilities."
Asked to name states that have done so, the bureaucrat-turned-politician said, for example, Punjab. Since coming to power in Punjab in 2022, the Aam Aadmi Party (AAP) government has taken several populist steps, including 300 units per household. Includes free electricity.
Punjab borrowed Rs 47,000 crore in the first two years of the AA government, adding to the state's already huge debt. It has strained finances where a large portion of the tax revenue earned goes into paying the interest and principal of previous borrowings."Many of these states are close to falling into a debt trap," Singh said, adding that states are borrowing to give freebies so that they can remain in power and the burden is being passed on to future generations. Used to be.
He said there would be no money to build roads, hospitals and schools for future generations because whatever revenue would come would go to repaying the debt.
When asked to give examples, he said, "For example, Punjab. Many of these states are trapped in debt trap." On electricity theft, he said, "AT&C (Total Technical and Commercial Losses) losses are 27%. Used to be a percentage.Today it is 15 percent, no one thought this would be possible. I've done it by a combination of various measures, incentives, legal penalties, everything".
He also said that he wants to reduce it (AT&T loss) further to about 10-12 percent.
Singh also said that many states had outstanding dues of Rs 20-30 thousand crore, which have been reduced. "Therefore, I made monthly installments (for repayment of outstanding dues) in the rule itself," he said. As a result, Current outstanding as on date, outstanding has reduced from Rs 1.45 lakh crore to Rs 40,000 crore.,
Asked about providing choice of multiple service providers to consumers, the minister promised to make necessary amendments in the Electricity Act 2003.
The minister introduced the Electricity (Amendment) Bill, 2022 for this purpose in the Lok Sabha on August 8, 2022, which was referred to the Standing Committee for scrutiny on the same day. The committee has not given its report on the bill. But since the bill was introduced in the Lok Sabha, the new government will have to introduce it again.
“I will reintroduce it. So, what will happen (if the bill is passed) will be competition, and better services. The regulator will fix the maximum price.If someone (operator) asks for Rs 4 per unit and Rs 3.5 per unit, you will prefer that (Rs 3.5).
"So, we moved the amendment. It went to the committee. It is there. I will have to move it again," Singh said. On the ambitious renewable energy target of 500 GW by 2030, he said India will miss the target. will achieve and has already locked in about 360 GW of renewable energy, including 190 GW of operational capacity."...My installed capacity of RE is around 190 GW, I have 103 GW under construction, which makes it 290 GW. I have 72 GW under bidding. So, I am already around 360 GW. I am at the time As I reach all my goals,” said the minister.
Responding to a question about his top priorities if the BJP-led government wins the general elections and he becomes power minister again, Singh said his priority at the moment is to add more capacity as quickly as possible. He said , “I think my demand will double by 2030.Imagine that in a country like ours the demand will increase from 243 GW to about 400 GW by 2032. I think I'll be a little bit more than that."
Regarding the planned addition of 80 GW more coal-fired thermal power capacity, H said, "I am not going to compromise on the availability of electricity. There is a lot of solar power right now, but at night you don't have solar power. So, at night, you don't get electricity. In the morning and evening the wind doesn't blow...sometimes".He also said that phasing out coal-based thermal power generation capacity requires viable storage as it is essential for round-the-clock renewable energy.
