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10 policy initiatives to transform India’s energy sector

According to reports, in the ninth show of CNBC-TV18’s series Change India there are 10 policy initiatives that will enable the next Prime minister to transform India’s crucial energy sector.

The panel includes distinguished personalities like Kirit Parikh, economist and former member of the planning commission. Shakti Sinha, former IAS officer who was in the PMO and in energy related ministries. Arunabha Ghosh, CEO of Council on Energy, Environment and Water, a leading think tank and joining the discussion via satellite link is Rajendra Kumar Pachauri, director general of TERI and head of the Nobel prize winning Intergovernmental Panel on Climate Change and Dhiraj Nayyar, CEO of Network 18 Think India Foundation, who anchored this project.

The show which was hosted by Raghav Bahl, founder and MD, Network 18, will present its suggestions on health and 13 other policy areas to the next Prime Minister who takes office in June. The show also included audience who actively pitched into the debate on twitter and the website. CNBC-TV18 picks top three recommendations, all of which are related to the government formation and quick decision making that can be done by the new government when the Prime minister takes office.

One: There are so many ministries focusing on energy related issues. There’s petroleum and natural gas, there is power, there’s renewable energy, coal, there’s also the nuclear power corporation. Club all of them into one ministry of energy. That will reduce four cabinet ministers to just one, so there will be resistance and therefore, this is something the new Prime minister will have to do in the first week in office before he announces his cabinet.

Two: Move conclusively to market prices and all the subsidies that government has to give to the poor, please give them through direct cash transfers. The first thing that government can do is completely deregulate diesel prices quicker than 50 paise per month that is being done currently.

Three: To set a very strict time limit for the environmental clearances for mining and energy projects and people must be benchmarked, they must be incentivised to deliver and penalised if they don’t deliver.

Parikh: I don’t completely agree with the idea that if you make one integrated energy ministry it will make any difference. We had one integrated energy ministry in the 70’s under KC Pant. There is one ministry but then he has so many minister of states looking up at each of these and his ability to coordinate will be no different then the Prime minister’s ability to co-ordinate all these different ministries. So, as long as there is a Prime minister who has the power and the will to exercise that power across all the ministries it is not going to make any difference. I don’t think it is a critical measure at all.

Raghav: But I want you to reflect on the second point as well and that’s on the much quicker deregulation. Can we do say 75 paise per fortnight, rupees one and half per month.

Parikh: It can be done very easily. You don’t have to do 75 paise a fortnight. I have been arguing for diesel price that today there is a difference of about Rs 8 per litre between the price that should be and the price that is charged to the consumers. You could easily deregulate diesel today and say that henceforth we will give you only Rs 8 per litre fixed subsidy and let the international prices be transferred to this and gradually reduce the subsidy at Rs 1-1.5 or whatever and that can be done immediately.

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