Published on: The Economic Times, 3rd March, 2001

By Pradeep S Mehta

Secretary General
CUTS Centre for International Trade, Economics and Environment

DEAR Prime Minister, in a recent statement you have said: “We have failed to achieve the power generation target and prevent power thefts and have not made enough efforts to deal with the crisis.”

Earlier in your Musings from Kumarakom you had inter alia called, “{for} radical development reforms, which should encompass, besides economic reforms, administrative and judicial reforms. The most important component of these reforms is to fix transparent accountability at all levels and increase people’s involvement in monitoring the functioning of all agencies that impact on development. People must be empowered to not only demand results, but also to actively participate in the attainment of results.”

When you meet the power ministers of our states on 3 March, it will be useful to address the issue of involving the consumers and their organisations in the movement for reforms in the power sector for the following reasons: Firstly, the new electricity regulatory laws have recognised the role of consumer organisations to represent consumers before the authorities.

Secondly, electric power is a basic need and inherently essential for a dignified living. Thirdly, consumers are ready and willing to pay little more for a consistent supply of power, if they are assured of it meeting the benchmarks of quantity and quality.

However to be able to get people to accept the reforms, the government has to address two major apprehensions: that prices will (not) be raised beyond the paying capacity of the ordinary consumer; and the board employees will (not) be sacked.

Other than these, there are two macro factors, which need to be borne in mind: the lack of people’s involvement in the reform process; and poor communication by the government(s) of the need for reforms.

Let’s take the example of Andhra Pradesh, which has a very dynamic chief minister, the electricity rates were raised by over 120 per cent at one go. That led to severe unrest, agitation and social disarray.

Genuine consumer organisations were not even invited for the consultations. The required public notice or a public hearing was also not done. The government had to backtrack.

As a contrary experience, here let’s take the example of a well managed situation, that in Rajasthan. The electricity board has been split into five companies about seven months ago.

The government advertised that not a single job will be affected, and also assured consumers that prices will not be raised arbitrarily. Not a day’s strike took place.

Now the three distribution companies have proposed hikes of 15-17 per cent. Public notices have been issued and public hearings have been organised all over the state, and the whole exercise has been publicised widely.

We at CUTS have done some homework and intervened in this exercise, with the goal of getting several commitments from the companies, which will benefit the consumers both in the short term and the long term.

We have also pushed the electricity board into developing a citizen’s charter and organised several surveys and meetings. We were able to do all this, because we have created a large network of over 300 (and growing) rural and urban consumer organisations in Rajasthan, with whom we work on several issues.

You have confessed that not enough efforts have been made, and you have also recognised that people must be empowered to not only demand results, but also to actively participate in the process.

Therefore, the catharsis must begin by resourcing the consumer movement, and building their capacities to intervene in the regulatory process, mobilise, function as an intelligent watchdog, and act as a bridge between the people and the government.

If finding the money is a problem, a cess on electricity bills can be levied and put into a consumer fund, as is happening in other countries. As we all know, electricity is one of the most crucial inputs in socio-economic development. Therefore, we cannot procrastinate.