Anil Razdan, former Union Power Secretary, spent most of his official tenure in the energy and petroleum sector. He was joint secretary in the Union Power Ministry, director Energy Management Centre, director Atomic Energy Department, principal secretary in Haryana’s Power Ministry and chairman-cummanaging director of North East Power Corporation.

As secretary, Ministry of Power, Razdan’s tenure was hailed as a visionary one, with many path-breaking initiatives and unprecedented activity, heralding a paradigm shift in the scale and width of operations. In 2007 and 2008, there was capacity addition of nearly 60,000 MW as against previous capacity addition aggregates of just over 20,000 MW over five-year plan periods.

He was instrumental in bringing about significant international interest and investment in super critical thermal power generation equipment manufacture in India. In an interview to VIJAY THAKUR, Razdan spoke on the problems faced by the power sector in India.

Excerpts:

Q: The Indian power sector is passing though a very bad phase. In the 1990s there was acute shortage of power, now there is a problem of plenty. Most private and public sector power plants are not operating at full capacity. What do you think is the reason?

A: We must understand that India does not need energy generation alone, it should be related to employment generation. Our consumption is one-third of the global average and we need to speed up our energy consumption. Energy means more activity and a better living. The LED revolution and improvements in the transmission and distribution network have reduced our power demands.

But unfortunately, the projections we made for increasing our manufacturing could not be met. Increase in power production should be related to increase in the manufacturing sector. Unless there is an increase in manufacturing sector and it is channelised to jobs, the future is not good.

Q: What do you think should be done to speed up the manufacturing sector or to increase electricity demand?

A: India is very lucky in many respects. Unlike Europe or Western countries, where infrastructure has already been developed, India is in a phase of growth, where we can invest in developing infrastructure, manufacturing sector and creating jobs. Instead of importing goods that can be manufactured in India, our government must concentrate on ‘Make in India’.

We should stress on exporting our goods to other countries. At present we are exporting our techno-talent to developed countries. Why can’t we do the same with our indigenous manufacturing sector? The strategy should be to explore the frontier areas of science and areas of mass consumption which can be manufactured in India for export purposes.

Q: Do you think there are global players who are working against the India development story?

A: Not much to say. But global powers will continue to push us in the direction they want. Till date they have moved faster than us. Now it is for us to identify, chart our own course and move in the right direction. Ignoring world power politics, India can move in a way which would improve the economy, generate employment, increase efficiency and make us a world political power.

Q: What should India do to improve fiscal health of power producers and power distribution companies?

A: We have successfully taken electricity to almost every home. But this has to be a viable exercise. The distribution end of the energy sector is crucial, because ultimately payment is made by the end consumer to recover the money that is invested in the energy sector. Nearly thirty to forty per cent of dues are still pending to discoms.

If the payment is not recovered, how can the energy industry survive, leave aside be profitable. Distribution end is the one which will bring back the invested money. Unless we recover the payment in time, we continue to move from one crisis to another and switch from one UDAY scheme to another. I am of the strong belief that all players in the power sector must either perform or perish.

I am a votary of efficient operations, whoever is efficient has to be given a chance and one who is not performing should perish. The best example is Agra. Some of its areas were notorious for not paying power bills. But thanks to privatisation it is totally changed. Huge loss making discoms are today happy to have regular revenue, thanks to an efficient distributor. We need more such efficient distributors in other areas to make the power sector a success story.

Q: What according to you is the best way to help discoms recover dues?

A: We need to learn from the telecom sector. It introduced prepaid metering and mobile phone use increased tremendously. There were payment problems in the sector earlier, but after the introduction of prepaid system, there is no issue related to customer payment. If you pay for what you use, you will use it very carefully and cautiously.

For those who need to be given subsidy, it should be given directly to the consumer. Let the consumer pay initially and then give them subsidy according to his/her income level. Electricity business should run like a business and not like a charity. There is no scope for inefficiency.

Q: In India there is politics behind power. State governments use power to address vote banks. There are many freebies attached to power politics.

A: It is very unfortunate that earlier we had not treated electricity as a commodity. Today at some level, the awareness and consciousness are increasing that we need to recover dues and put it in the system. Though affordability of power tariff is a must, if the government offers freebies to one sector and passes on the burden to the industry, it will create problems for all.

Affordability of power tariff should be properly taken care of. You cannot load the manufacturing sector by charging high tariff. It might be done to gather votes, but it would have an adverse effect. Manufacturing sector would move from those states where power tariff is high. People would not get jobs, then the ultimate loser would be people of that state.

I suggest a fine balance between domestic and industry power tariff. Though this is a political issue, we must understand that ultimately whatever is consumed should be paid for.