Report of Indian Institute of Public Administration ... - Ministry of Power

Karnataka
CHAPTER - 6
WAY FORWARD
(A) POLITICAL COMMITMENT: A MUST
Unless there is Central intervention to activate the reform efforts and to put it
back on even keel by securing political commitment of the State Government,
the trend is unlikely to change. Ministry of Power must consider the ways and
means to accelerate the reform process by innovative measures, albeit the EA,
2003 establishes the framework for restructuring. It is important to pursue the
objectives of the Act in letter and spirit, since a mere restructuring in form, as
carried out in Karnataka, will not yield the full desired results. With all
restructured companies continuing as 100 per cent Government owned and
controlled entities, the impact of restructuring is limited. The feasibility of
linking central assistance (including those from REC and PFC) with the
progress of effective implementation of the reform will be one such possible
measure.
(B) IMPROVING RECOVERY FROM AGRICULTURAL SECTOR
The main reason for the continued poor financial performance of the
restructured companies is the resistance of the agricultural lobby to install
meters on IP sets and refusal to pay for the electricity consumed, which is taken
by them as a matter of right. This is an all-India issue and has to be sorted out
at the national level. The objective must be to define the ‘creamy layer’ of
farmers, to identify them, and to make them pay through coercion. Linking the
support price and procurement operations to those who have paid for the
electricity drawn by them could be explored. Until a reasonable solution is
found for this daunting problem, the sector reform will only be partly
successful.
(C) PLANNING AND MONITORING AGENCY
During the initial stages of the power sector reform in Karnataka, there was a
ministerial committee to oversee the reform implementation. It is necessary to
reactivate such a high level committee, but with clear and specific objectives
and tasks. This must be supplemented with a Steering Committee under the
Chief Secretary, as before, with clearly defined tasks and commitments.
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