Originally Published 2014-01-07 04:20:52 Published on Jan 07, 2014
The Delhi government is in no mood for sparing the discoms and discoms on the other hand do not want to give up their inertia. The AAP promised tariff reduction and slashed the same by 50% after coming to power.
Who needs to be subsidised and who needs to be green in Delhi
"The Delhi government is in no mood for sparing the discoms and discoms on the other hand do not want to give up their inertia. The AAP promised tariff reduction and slashed the same by 50% after coming to power. The poor consumers are satisfied but the green opportunists are more than happy. These green opportunists are the ones who are benefiting twice, once through reduced tariffs and second through vested business interest. They are also the ones who want India to do away with the subsidies but when it comes to availing subsidies they are first in line.

This is just the case when it comes to producers of power through renewable sources. Interestingly in the name of making Delhi energy independent, they are seeking a surrogate route for pushing renewable energy by increasing subsidy on solar panels and associated equipment. This is a clear case of artificially creating a demand for the renewable energy at the cost of tax payer’s money. These opportunists always focus on the green aspect but shy away when it comes to funding the renewable programme and finding ways to earn revenue for the government. They do not want subsidy on coal fired power but would like to avail huge subsidies on green sources.

Indeed Delhi can become green at the cost of tax payer money. Certainly it could be a moment of cheer for the green fraternity as it is a step towards reforms that favour their interests. But reforms must take place in a genuine manner and therefore this column will offer some suggestions for the new government as to what they should do for greening the power sector and who needs to be green.

As already mentioned, the government has already slashed the tariffs by 50% which has cheered Delhi consumers. But bringing happiness must be complemented with financial viability. This is important not only for the power sector per se but for the whole State. The government must also think that whether offering benefits to all class of consumers irrespective of their need is sustainable. Instead the government must classify consumers in to different categories. Though this is difficult to do in a short time because of the leakages but it will be fruitful exercise in the long run. The following suggestion may be considered:

Needy and poor electricity consumers: This class certainly is in need and should be given intended befits through subsidy. They are the ones who pay more for the services availed by them from the grey market. Therefore the government must keep its commitment by providing electricity at the reduced 50% tariff. The poor who are yet to be metered must be metered at the earliest and they must be encouraged to pay for the services (at reduced tariffs). Very importantly, they must not be overburdened with green energy as they are already green. It must also be ensured that this class comes under no power cut zone as they have only necessary electricity gadgets and their electricity consumption is very low. The intended benefits should be given to the people who earn ’ 5000/ month - ’ 20,000/ month. The benefit must be provided through government budget or through wise cross-subsidisation. There are some miscreants in this group who must be identified and dealt with as necessary.

Middle class electricity consumers: This is the most loyal class of consumers as they pay the electricity bills on time. They are also under continues threat that their electricity connection will be cut in case of default. Yet they are the ones who are bullied every time and have to run around electricity utility offices for no fault of theirs. This class generally consists of service personnel and self employed small businessmen earning above ’ 20,000/ month - ’ 80,000/ month. The major chunk of their income goes towards rent and electricity bills. They must get some benefit of the reduced tariffs but not at the rate of 50%. Instead they could be offered a 30% reduction. Abusers of the scheme may be found in this class as well as many are found to be indulging in meter tampering which can be stopped through periodic checks and penalties. Importantly, they must also be kept out of the green ambit because that will become a surrogate route for burning their pockets. But some percentage of green cess (like 2% of the total electricity bill) can be charged from the consumers earning above ’ 50,000/ month - ’ 80,000/ month.

Upper middle class electricity consumers: For this class electricity tariff is not an issue. They can afford the electricity at high prices. They live in high rise buildings, drive SUVs and have all sorts of luxuries in their homes. Their lifestyles are expensive and they crave for every new electricity/ electronic gadget that is launched in the market. This class earns ’ 80,000/ month - ’ 1,50,000/ month. Their electricity bills are usually high in spite of having energy efficient Air conditioners (AC) and other electric gadgets. This class is not in need of any benefits. They do not care about electricity tariff as they are already paying ’ 12- 15/unit for diesel generated power. If the government wants to give some benefits then it must be limited to 10%. The green energy obligation must be enforced on them and they must be encouraged to go for solar roof tops. Here too presence of miscreants cannot be ruled out. They work in cahoots with lower level employees of power utilities to reduce their electricity bill artificially. The same can be stopped through hefty penalty on the consumer and the employee.

Rich electricity consumers: This class is really stubborn and do not like any reduction in quality of their life style. They have everything and yet they want more. Subsidising them is certainly not acceptable. The class falls under incomes above ’ 1,50,000/ month - ’ 2,50,000/ month. Their electricity bills are very high and are hardly noticed as it is handled by their servants. They do not require any reduced tariff benefits. Any subsidy benefit availed by this class is nothing but a huge revenue loss for the government. Apart from that they must be made accountable to green obligations. They must procure power through renewable sources and in case of default a green penalty must be enforced upon them. There are miscreants in this class as well and they generally sort out their billing misdeeds by directly dealing with higher level employees of power utilities. The misdeeds can be stopped through adopting stick approach on the consumer and the employee.

Super-rich electricity consumers: This category falls under criteria earning above ’ 2,50,000/ month. They are the real beneficiaries of the reduced tariff prices as they consume more electricity through more gadgets. They are not entitled to any government benefit. They are dedicated to consumption of high energy products such as packaged food, AC cars and AC homes! Their bill runs into several thousand to lakhs and they do have any problem in paying that. There is no need to subsidise them at the cost of the exchequer. Many in this class pretend to be green but yet they are not. They come in big cars and yet they talk about diesel subsidy. Their power tariff must be increased and since they are talking about being green, they must be forced to follow all green obligations or a hefty penalty must be imposed upon them. There must be clear directives from the government that this class must avail of renewable power for 5 - 8 hours a day. They must be made green! The miscreants of this class are very powerful and most of their misdeeds go unnoticed. Neither the power utilities nor the police have the guts to punish them. They can only be stopped through naming and shaming them.

Note: The above classification is only intended to make a point and not intended to offend anyone falling under the specific income category.

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