AP bears heavy load of free power
Subsidy burden, illegal connections & widening demand-supply gap add to woes
Suresh Dharur
Tribune News Service

Hyderabad, March 16
Is Andhra Pradesh going the Punjab way on the much-touted free power policy? With mounting subsidy burden, illegal agricultural connections and the widening demand-supply gap, questions are being raised over sustainability of the populist scheme for farmers.

The state is reeling under acute power crisis with a daily shortage of 25 to 30 million units, while the demand is around 250 million units. This has prompted the government to impose heavy power cuts across the state and an unofficial three-day power holiday in a week for industries.

The experts are attributing the crisis to “unbridled populism” as the lure of free power has spawned an estimated four lakh illegal agricultural connections. The government is supplying free power for seven hours a day to 28 lakh pumpsets , bearing an annual subsidy burden of Rs 6,000 crore.

Agriculture sector accounts for nearly 60 percent of the state’s power consumption. “What we lack is a proper monitoring system. There is huge pilferage and the industries are made to suffer the consequencies,” said V Anil Reddy, chairman of the energy committee of the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI).

However, the mainstream political parties are wary of critical assessment of free power to agriculture sector, a pet scheme of the Congress government.

“Instead of blindly following the populist policies, the government should fine-tune them to benefit the needy sections. The agriculture sector should be metered and consumption beyond a certain limit should be charged,” said Dr N Jayaprakash Narayan, the bureaucrat-turned-politician and president of Lok Satta Party.

“The industries, particularly in the small and medium sector, are incurring heavy production loss due to unprecedented power cuts,” lamented CII AP Chapter president Y Harish Chandra Prasad.

With erratic supply and voltage fluctuations, the farmers have started feeling the negative impact of the populist and poorly managed free power scheme. “What farmers want is quality power for an assured duration and they are willing to pay for it,’’ said R Changal Reddy, president of Federation of AP Farmers Associations.

The farmers are in no position to fight as consumers against errant power supply as they are getting it free. The experts say that the adverse impact of power crisis on industries could lead to a loss of Rs 1,500-1,800 crore in terms of tax revenues to the exchequer.

Meanwhile, AP appears to have lost out in the race to tie up additional supplies from the Southern and the North-East-West (NEW) Grid. The officials said that Tamil Nadu and Karnataka have already reserved the grid space for around 2,000 MW additional power leaving no scope for AP to enter into the space.

Adding to the government’s woes is the precarious financial position of the power distribution companies, which are unable to secure fresh loans for power purchase as they have already exhausted their credit limits with the banks.