Power sector losses unsustainable: PM

July 24th, 2010 - 4:55 pm ICT by IANS  

Manmohan Singh New Delhi, July 24 (IANS) Hinting that hugely subsidised power to farmers was hindering the growth of the energy sector and making it unsustainable, Prime Minister Manmohan Singh Saturday urged all chief ministers to give personal attention to problems in the power sector.
“The total loss (in power sector) 2009-10 is estimated at Rs.40,000 crores. This is simply not sustainable and unless corrected it will make the whole power sector unviable,” Singh told the 55th National Developmental Council meet here at Vigayn Bhawan.

The meeting was attended by almost all the state chief ministers, besides key central cabinet ministers and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

“These losses arise from low levels of tariff for some categories of consumers, combined with high aggregate technical and commercial (AT&C) losses,” said Manmohan Singh without naming farmers, who are given hugely subsidised powers for irrigation.

The prime minister made the remark a day after Ahluwalia disapproved of the populist measure of free power to farmers and suggested a cess on power to farmers in areas where the water table has depleted due to excess withdrawal of ground water.

“Though a decision on free power to farmers has to be essentially political, but technically we have been consistently holding that the policy of giving free power to farmers is not the best way of helping them,” Ahluwalia told reporters on the eve of the NDC meet.

Pointing out the huge losses of Rs.40,000 crore to power utilities, Ahluwalia said “giving free power to farmers was leading to problem like excessive withdrawal of ground water, depletion of water table and salination of soil.”

In his inaugural address to the NDC meet, Prime Minister Singh said “the power sector is particularly important if we wish to achieve 9 percent growth”.

“The mid-term appraisal suggests that we are doing better than in the Tenth Plan. The generation capacity in the Eleventh Plan (2007-12) is likely to expand by 62,000-64,000 MW.”

“Though short of the Eleventh Plan target of 78,000 MW, it will be nevertheless three times the capacity that was added in the Tenth Plan,’ he said.

“However, there are problems in this sector, which need to be addressed effectively, which have been highlighted in the supplementary agenda note circulated by the Commission. One of these problems is the need to reduce the high level of losses in power utilities,” he said.

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