T&D losses and power theft have to be addressed in a flagrantly strict manner – arrest the power stealers and publicise their conviction
In April first week, Delhi Chief Minister Sheila Dikshit promised that there would be “no power cuts in the capital this summer.” This promise held well for one week in some localities. In other states, the less said about power the better.
As per a recent report, the Planning Commission has revealed that the combined losses of public sector discoms, which were to the tune of Rs.40,000 crores in 2009-10, could swell up to a shocking Rs.68,000 crores in the current financial year. It has been widely seen that the reason for such huge losses is because of faulty T&D (transmission and distribution) systems. The fact is that more than one-third of electricity supplied gets lost in T&D and a similar substantial part is stolen. Presently, the T&D losses can go up to 40-50% in many states; compared with China where the figure is less than 3%. India’s T&D losses are the highest in the world as per a report by WRI. They not only trouble consumers but also lead to huge financial losses. Assocham estimates that 1/3rd of the investments in the 11th five year plan is wasted because of T&D losses.
Regulation over return has hurt private interests in T&D which needs to change. Privatization of the distribution process has helped states like Delhi and parts of Maharashtra, but the model has not been successful in Orissa. The reason is that state electricity boards play a role in regulating tariffs and political interests come into play, which discourages private companies from investing. States like Karnataka and Uttar Pradesh, which are considering giving their power grid to private hands, must keep this in mind.
But there’s a shortcut to all this. Start arresting power stealers and publicise this in a big way to reduce power theft. It worked for reducing drunk-driving, it’ll work for this too.
For more articles, Click on IIPM Article.In April first week, Delhi Chief Minister Sheila Dikshit promised that there would be “no power cuts in the capital this summer.” This promise held well for one week in some localities. In other states, the less said about power the better.
As per a recent report, the Planning Commission has revealed that the combined losses of public sector discoms, which were to the tune of Rs.40,000 crores in 2009-10, could swell up to a shocking Rs.68,000 crores in the current financial year. It has been widely seen that the reason for such huge losses is because of faulty T&D (transmission and distribution) systems. The fact is that more than one-third of electricity supplied gets lost in T&D and a similar substantial part is stolen. Presently, the T&D losses can go up to 40-50% in many states; compared with China where the figure is less than 3%. India’s T&D losses are the highest in the world as per a report by WRI. They not only trouble consumers but also lead to huge financial losses. Assocham estimates that 1/3rd of the investments in the 11th five year plan is wasted because of T&D losses.
Regulation over return has hurt private interests in T&D which needs to change. Privatization of the distribution process has helped states like Delhi and parts of Maharashtra, but the model has not been successful in Orissa. The reason is that state electricity boards play a role in regulating tariffs and political interests come into play, which discourages private companies from investing. States like Karnataka and Uttar Pradesh, which are considering giving their power grid to private hands, must keep this in mind.
But there’s a shortcut to all this. Start arresting power stealers and publicise this in a big way to reduce power theft. It worked for reducing drunk-driving, it’ll work for this too.
IIPM Think Tank
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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