<p>Nero Claudius Caesar Augustus Germanicus, Roman emperor from 54 AD to 68 AD, was supposed to have been fiddling while Rome burned down. Sushil Kumar Shinde was probably not fiddling when the northern grid collapsed, cutting off electricity to five states and 300 million people. Or when, a day later, the northern, the eastern and the north eastern grids collapsed simultaneously, throwing 19 states and 600 million lives into chaos. Shinde had probably switched off mentally from the problems of the power sector, because he already knew that he would be named the home minister any moment.</p><p> </p><p>Meanwhile, Prime Minister Manmohan Singh was probably too busy to fiddle – he was giving the finishing touches to his minor cabinet reshuffle, which would see P Chidambaram come into the finance ministry again, while Shushil Kumar Shinde got the home portfolio. It is doubtful whether the fact that the power sector’s problems have only multiplied during Shinde’s stint as power minister gave the prime minister any cause for worry. It certainly did not affect his decision to go ahead and give Shinde an even more prestigious ministry.</p><p> </p><p>Even before the grid collapse, routine power cuts made sure that a good chunk of the population spent sleepless nights. It is doubtful though whether the prime minister or the power minister lost even a single night’s sleep worrying about the deteriorating power sector. If they were at all anxious about the increasing problems of the power industry, they did a pretty good job of hiding it. After he was named home minister, Shinde patted himself in the back in a television programme and said that his performance in the power ministry was “excellent”.</p><p> </p><p>Ostensibly, the grid collapses took place because of the indiscipline of certain states which kept drawing power far more than they were entitled to. The central government’s explanation is that if only states maintain grid discipline, there will be no grid collapses. So why do these states continue to overdraw power – and why doesn’t the central government devise ways to stop a state from drawing power once its quota is over?</p><p> </p><p>The issue is that it is not plain greed that makes states overdraw. Power demand has been growing consistently but power supply has failed to keep up with the demand. Some time ago, the government decided to tackle the power supply problem by encouraging the private sector to get into power production in a big way. Almost every big industrial group rushed to announce plans for setting up mega and even ultra mega power plants. The government also said that it would ensure fuel for the power plants that were being set up. Plants using coal as fuel were assured of steady supplies of fuel from Coal India Ltd, the country’s monopoly coal miner. Those who did not get to sign fuel supply agreements with Coal India were allotted captive coal mines. Several power producers who were planning to use natural gas as fuel were assured of supplies from the KG basin gas fields being exploited by Reliance Industries Ltd.</p><p> </p><p>As it happened, the fuel promises turned out to be a cruel joke for most new power producers. First, Coal India Ltd had signed agreements to supply far more fuel than it was producing – and its efforts to improve its coal production did not bear much fruit. As a result, quite a few new power plants found that their agreements were not worth the paper it was signed on. Meanwhile, many of the industrialists who had been given captive coal blocks for their plants found that they could not start mining these blocks. That was because the coal blocks did not have the environmental ministry’s clearance. And while the coal ministry and the environment ministry bickered, the power plants were left high and dry. The fact that the coal ministry and the environment ministry, being part of the same government, could have worked together to identify the coal blocks which could be given with environmental clearances, and only then handed out to the power plants did not seem to occur to the government. Meanwhile, those who were depending on KG basin gas for fuel found that the gas production was dwindling and therefore they would not get the fuel they were banking on. Meanwhile, even those industrialists who had decided to buy coal mines in Indonesia in order to get assured supplies at a fixed price woke up one day to find they could not get import the coal easily and cheaply – because the Indonesian government had changed a critical law.</p><p> </p><p>As a result today, there are several plants which are ready but not running, because they have no fuel. And many others which have been half constructed and then more or less kept on hold, until the fuel issue is sorted out. This was one reason for missing the target set for addition of power generation in this five year plan.</p><p> </p><p>If the central government was not particularly bothered about solving the power industry problems, the states themselves did not cover themselves with glory. Most states have broken distribution systems and bankrupt state electricity boards (SEBs). But many states have not done anything to fix the SEBs or make them more efficient, fearing political turmoil and opposition. Even enlightened states leave a lot to be desired. The state of Delhi had announced grand plans to make itself free of power shortage before the Commonwealth Games were held. Two years later, this has still not happened. And long power cuts plague many parts of Delhi during summers, when power demand is maximum. Also, most states have not done anything particular to help the private power plants coming up within their boundaries.</p><p> </p><p>Meanwhile, the plants which are already operational also have a problem. A good 20 per cent of all thermal power plants in the country are exceedingly inefficient. They operate well below 70 per cent of their capacities. In some cases, it is because they are too old and too small. In other cases, they have simply not been maintained properly. At any rate, they burn too much fuel, and produce too little electricity and at too high a cost. But for some strange reason, most states are loath to close down these plants. Similarly, much of our hydro power capacity is inefficient, and stop working because of silt build ups or low rains.</p><p> </p><p>The problem of generating far less power than we actually need is exacerbated by the transmission and distribution losses. In 2010-11, nearly Rs 40,000 crore was estimated to be lost because of transmission and distribution losses. In nine states, T&D losses were over 30 per cent. Jammu & Kashmir had almost 60 per cent of T&D losses. Manipur had 43 per cent T&D losses, Sikkim 42 per cent and Madhya Pradesh 34 per cent.</p><p> </p><p>The UPA government has often been accused of policy paralysis, which most commentators feel has resulted in the sudden slowdown in GDP growth that we are seeing. Many states too have been blamed for putting up too much opposition on issues such as FDI in retail – which will ostensibly bring in large amounts of foreign investment and will spur our economy. But few people calculate how much the Indian economy would show as additional growth if the power sector problems were sorted out – and the power production in the country improved by even 10 per cent. Just working out the man hours lost during the recent grid collapse could help them start with those calculations.</p><p> </p>