DISCIPLINING THE DISCOMS

Employing a carrot-and-stick approach, the power ministry is trying to make discoms more efficient, even as multiple challenges threaten to trip its efforts

- ANILESH S. MAHAJAN

Sometime in the middle of January, Hiralal Nagar, the energy minister in the newly sworn-in BJP government in Rajasthan, visited Union power minister R.K.Singh's office in New Delhi with a request. He wondered if his state could get additional electricity along with some relaxations in lending norms. Distribution companies, or discoms, in Rajasthan, have a cumulative debt of Rs 79,370 crore, according to the latest filings with the state's regulator. It's a nightmare for the new government, which has to honour electricity subsidies committed by its predecessors. Singh's response to Nagar was a polite "sorry". Nagar is not the only one; many of his counterparts and chief ministers from other states have been approaching the Union minister with similar requests for either more electricity or waiving their discoms' debt or legacy dues owed to generation and transmission companies. Singh has the same answer for all of them. "We cannot put more money behind bad money," he tells INDIA TODAY in an interview. "There is no exemption for anyone...the entire system is automated and rule-based. Even if I want to game it, I can't. There's no politics in this." Instead, the Union minister suggests alternatives and advises his visitors not to deviate from the painful path of reforms. His message is clear the states have to strive for round-the-clock power supply, but without compromising the fiscal health of the discoms, which, for decades, have been described as the weakest link in the power sector.

WHY DISCOMS WENT DOWN