Power reforms by Piyush Goyal : Em’power’ing India to become a superpower !

To “˜save”™ has two meanings- one is to rescue, and the other is to reduce expenditure. For the past two years of the Modi government, the energy sector has witnessed savings in both senses of the word. From the second-by second savings from LED bulbs broadcast on the UJALA app, to the erasure of need for coal exports, we are witnessing savings in the everyday life of the citizens as well as at the national level.

Now if we go back, just two years ago, two thirds of the country’s power plants were hungry for the coal. Nationwide grid failure in July 2012 saw India setting the record for the biggest blackout in history, and newspaper headlines predicted more blackouts to come. From this brink of despair, the power sector has been saved – and in just two years, not only is India now coal surplus (with some states now requesting the Centre to stop sending coal), but India is also a power surplus nation, for the first time since independence. This has been made possible because the country elected a government with the political will to set bold targets and deliver on its promises, no matter how abysmal the past situation was. Working on the mantra of transparency, accountability, and efficiency, ministries under Shri Piyush Goyal have converted an era of shortages, corruption, and wastage of taxpayers’
money to an era of surpluses and savings. The “acche din” were visible from the very beginning with the historic auction of coal mines in the most transparent manner. With coal auctions, the Modi government set in stone that no future government can play with the natural resources of the country. The loss caused due to the coal scam, as per CAG report, amounted to Rs 1.86 lakh crore. The Modi government swiftly formulated and started the e-auction procedure after the Supreme Court cancelled 204 coal mines. In the first round of e-auction of coal mines itself, the loss was recovered with 1.93 lakh crore accruing to coal bearing states. It also meant additional tariff benefit of around Rs 69,300 crore will accrue to the power consumers through this reverse e-auction. This marked the beginning of an era of savings in the energy sector.

The government has also changed the way coal is mined, and not just the auction process, thereby empowering the Maharatna company Coal India to perform to its best potential. Coal India used to grow at the rate of 2-3%, and 4% was a cause for celebrations. This scenario has drastically changed, with production growth being 10% in June 2016. The government has made coal shortages a thing of the past, with removing roadblocks of clearances, empowering workforce, and chasing ambitious targets. With 74 million tonne coal production in two years, we are in a situation of coal surplus. From days of critical coal stocks, to not a single power plant facing shortage of coal. Eliminating a huge bulk of imports has reduced the coal import bill by Rs. Rs 28,000 crore in the last fiscal, and Coal Minister Piyush Goyal expects savings to touch Rs. 40,000 crore in 2-3 years. Surplus coal has enabled India to look at exporting coal to neighbouring nations, like Bangladesh. India is also planning to utilise coal for methanol production, which will decrease our dependence on fossil fuels.

As the coal sector touches newer heights of growth, the shortcomings of the past are also
uncovered. We see the extent of neglect and poor policy framework that was stalling growth of the sector. It is surprising how much money was being wasted in unviable coal supply
contracts,called coal linkages. Gujarat”™s case brings home the absurdity of not
putting in place an efficient way of allotting coal linkages. Coal imports for NTPC”™s Corba plants would come to Gujarat”™s ports, while coal mines in Corba were transporting coal to Gujarat”™s power plants. Even the trains went up and down at the same time! Narendra Modi, as CM of Gujarat had been writing for ten years to the Centre on coal rationalisation, but nothing was done. Now, in just two years, the government has been rationalising coal linkages, and also allowing swapping of coal linkages for most efficient use, with which government”™s power plants will be saving Rs. 6000 crores on coal transportation every year. (Watch Shri Piyush Goyal’s press conference here. )

From the fuel, coming to the electricity that it generates- the power sector has its own savings stories, owing to the transparency and efficiency that reaped benefits in the coal sector. With eauctions becoming the rule of procurement, the government gets the best product at the cheapest available cost, a recent example is the cost of smart meters being reduced from Rs. 8000 to Rs. 3223. With a large population like ours, the government is also
able to use economies of scale to reduce the prices. The LED bulbs story is a shining example
of the huge savings under Modi government, and saving that is not just monetary but also saving the environment. Under the UJALA (Unnat Jyoti with Affordable LEDs for All) scheme, 15,59,39,406 LED bulbs have been sold leading to a saving of Rs. 22,19,32,964 and cutting CO2 emissions by 44,941 tonnes. (Check the current status on ujala.gov.in) The target is to replace all 770 million incandescent bulbs with LED bulbs. Working towards this goal, the government company EESL has gone from selling 6 lakh LED bulbs in a year in the past, to selling over 6 lakh bulbs in a single day. Furthering the
success of energy efficiency mission, government plans similar nationwide drive for energy efficient tube lights and fans. This shows that “Speed. Skill. Scale.” is not a mere slogan for thisgovernment, but a mantra that”™s reflected in its work.

When we look from savings made, to those yet to be made, the state of the debt-ridden power distribution companies (DISCOMs) comes to mind. For converting these ailing DISCOMs into profit making entities (like in Gujarat), the Power Ministry has implemented the UDAY (Ujwal DISCOM Assurance Yojana) scheme, which has found pan-India acceptance from state governments. The reasons for DISCOMs to have such humungous debt and losses (accumulated losses of about 3.8 lakh crores and outstanding debt of Rs 4.30 lakh crores), are inefficient functioning, freebies by governments using power supply as political tool, and allowing rampant power theft. With UDAY, the Centre has come up with a permanent solution to these problems. The savings from UDAY, or the elimination of losses, once implemented will be Rs. 1.8 lakh crore every year. ( PIB Press Release )

What is the secret of savings that have replaced the scams of the past? We see that in every step, principles of efficiency, transparency, and accountability are being used to script India”™s
success story. Transparency is the basic tenet of any successful enterprise, and efficiency takes its potential to the next level. Efficiency is the necessary ingredient of saving. When we ask how efficiency has become a hallmark of the energy sector, we find it begins from the very table in theoffice of the minister. Talking of his style of working, Minister Piyush Goyal shared how he has cut down the paperwork in his ministry. It went from getting a hundred files a day to less than four files pending his approval. The difference is that now the ministries do not entertain individual cases, and issues are resolved only through policy decisions after a “root cause analysis” of the problem. It means that if the individual’s grievance is due to policy, a bad policy will be rectified for every player in the field. On the other hand, if the policy is fine, particular cases will not be entertained and so, no individual will command special treatment from the government. This is a world away from a time when entire coal mines were given free of charge to friends and relatives. This is a snapshot of the ways in which the Narendra Modi government is making governance not just match private firms, but set benchmarks for the private sector. The energy sector of a nation is like a body”™s circulatory system, and the Modi government has unclogged and rejuvenated it through surgical interventions. Looking at the savings, we can see that the stage of recovery is nearing completion, and the power sector is on its way to making India a superpower.

Arushi Bahuguna