February 29, 2020
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'States Must Feel Where The Shoe Pinches'

P.R. Kumaramangalam, the minister for power, interrupted hectic consultation with potential foreign investors to answer Outlook's questions. Excerpts:

'States Must Feel Where The Shoe Pinches'

What is the status of the power sector in India?

We are facing a critical situation. There is a tremendous shortfall of power throughout the country and the projects which were supposed to have taken care of the problem have failed to deliver. While official figures show moderate rates of shortfall, the actual situation is much worse. My estimation is that the actual shortfall is much above 20 per cent, in the range of 18,000 MW. It could be even more.

Are the latest reforms for infrastructure needs or an aftermath of the nuclear tests?

We’re losing Rs 10,000 crore a year (at the SEBs) and Rs 50 lakh on every additional megawatt. There’s no room for complacency or taking things for granted. The SEBs have to become efficient. This was also part of our manifesto. We’d said these things would be completed by December and we are moving fast to keep our promise.

Why are you passing on the responsibility to states?

Firstly, we are losing a lot due to inefficiency of the SEBs. We are also suffering on account of the power policy of different states. Ultimately the burden was coming on to the Centre. And when the states are the actual buyers of power and are mandated governments, it is wiser to let them feel where the shoe pinches. This way they will dole out subsidies with more caution as they would be paying from their own pockets. The Centre will not provide monetary support for state power subsidies any more. This will reduce the distribution of free power to sectors who can pay for it.

Has the government decided not to clear any more fast-track projects?

If the so-called ‘fast-track’ project takes eight years, the government won’t pass any more of them. Of the ones passed earlier, only Cogentrix and Ib Valley projects are left to be implemented, unfortunately both are stuck up because of different reasons.

How will the sanctions affect the future of projects like Enron?

The World Bank has already announced that the Enron second phase will be cleared so there is nothing to worry about on that count. Other projects are also unlikely to be affected.

Some hardliners within the BJP have said that if the World Bank stops loans to India, we will stop repayment or stop US airlines from operating in India...

Everyone has a right to an opinion: that can’t be the party or official viewpoint.

The government is approving a lot of foreign investment. What happens to swadeshi?

Anybody can invest in infrastructure, in the creation of real assets. This does not come in the way of swadeshi in any way. However, if a foreign party tries to do trading or sells bhujji or chips in India, then I think I have a problem on my hands.

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