According to reports, before the Bharatiya Janata Party manifesto is finalised, intensive discussions are going on in the party on the scale and breadth of economic promises to which it will commit itself, including subsidies.
Narendra Taneja, who has just been appointed national convener of the BJP’s energy cell, says the Gujarat model of energy development “is inspiring” and will be replicated to the extent that it can, but the party is conscious that one size does not fit all.
Gujarat had endemic power shortages till 2000 — until it undertook massive power sector reform. Now, with installed generation capacity of over 18,900 Mw from thermal sources alone, Gujarat is the largest power generating state in the country. It aims to add 10,000 Mw in the next five years, to touch the 30,000 Mw generation capacity mark by 2017.
Uninterrupted power supply is one reason why investors are flocking to Gujarat. Taneja says this tells the BJP the energy policy of the new government must concern itself with “building a robust and sustainable energy security order”, but also address the “eradication of energy poverty”.
Taneja says, on the one hand, India still has 400 million people who have no access to power, partly because they simply cannot afford it; on the other hand, there can be no growth without energy,even if it is costly. “You need to have an energy policy that is pro-people and pro-growth,” he told Business Standard.
The party is yet to decide on the politically sensitive issue of subsidies, especially for oil.
The BJP visualises “multidimensional modernisation” of India’s coal sector. This doesn’t mean coal import will be discouraged, only that modernisation of mining and transportation of this mineral will mean lowering future dependence on import.
The party will commit itself to appointing a regulator for civil nuclear energy, including nuclear safety. Communication with people on nuclear energy will be a key element of the party’s nuclear energy policy. “Communication fosters confidence: People fear what they don’t know enough about,” Taneja said.
The party is considering incentivisation – possibly via tax breaks – of solar energy parks. “Grid-connected as well as off-grid solar power is at the forefront of a national energy imagination,” Taneja said. The BJP will promise “genuine autonomy” to energy public sector units like Oil and Natural Gas Commission and will encourage them to innovate, explore for oil blocks both in the Bay or Bengal and abroad and sign joint ventures.
Several international oil exploration companies, including BHP Billiton and Eni SpA, have exit India in frustration owing to hurdles and delays in the award of oil blocks. “We will address these delays proactively,” he said. On energy pricing, “the policy will be pro people and pro-growth”, Taneja repeated.
He said consumers don’t mind paying, as long as the quality of power is good and they are consulted if prices are raised. In Gujarat, to ensure equity as well as growth, dual distribution lines were installed to supply power, based on paying capacity of the consumers.
The first line provided continuous electricity at a much higher rate, whereas the second line aimed at farmers supplied electricity for limited period at a subsidised rate. Gujarat was not only able to cut down the loss, but was able to report profit after this model was implemented.