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Statescan
The Kerala
Government's dramatic decision to withdraw the power hike is largely being
seen as an anti-climax. But it was inevitable, writes India Today's M.G.
Radhakrishnan.
Just
a few hours after announcing the highest power tariff
revision in the state's history, Electricity Minister Kadavur
Sivadasan dashed off for a week-long "pizhichal" (massage)
treatment to an ayurvedic centre in a remote village. A day
later when the industry was still in shock, Industries Minister
P.K. Kunhalikkutty flew off for a week-long trip to Beijing. Terrified
by the soon-to-erupt public wrath, most constituents
in the ruling United Democratic Front (UDF) Government simply chose to
throw the canon of "collective responsibility" to the winds
and hurriedly distanced themselves from the unpopular decision. Some of
them even publicly condemned it while some others even threatened agitation
if the hike wasn't withdrawn.
Little wonder then that Chief Minister A.K. Antony chose to
withdraw the hike. He was not spared by even his own party as
a host of Congress leaders, right from from former chief minister
K.Karunakaran to AICC Secretary Vayalar Ravi, had condemned the decision.
But the Government had its reasons for what it said would result
in a major rationalisation of power tariff for domestic consumers
and also a thermal surcharge of 50 paise for all. The tariff
rationalisation, it said, would see an increase ranging from 40-95
per cent in the charges and would dispense with all concessions
enjoyed by all domestic consumers except those in the bottom slab who
use less than 40 units a month. It claimed that the measures would yield
Rs 70 crore to the debt-ridden KSEB.
But as the Kerala High Court pointed out, there was little
rationale in taxing the domestic consumers when the KSEB had
failed to recover dues from government departments and large
private establishements. Politically isolated Antony says, "It was
with great pain that we imposed the hike. We had no option."
The CPI(M)-led Left Democratic Front (LDF) and the BJP, which
lost no time in exploiting the situation, had hit the agitation
path. Workers of the Opposition attacked KSEB offices across
the state saying the hike was as per the dictates of the Asian
Development Bank (ADB) which had pledged a loan of Rs 3,500 crore to the
state.
According to the Goverment, the hike had been necessitated by
failed monsoons. As Sivadasan pointed out, "The poor monsoon
forced us to cut down on hydel power production and buy costlier thermal
power from the National Thermal Power Corporation, costing an additional
Rs 85 crore a month which
has driven KSEB to bankruptcy. Without this, the KSEB would have closed
down as its monthly losses have gone up from Rs 100 crore to Rs 185 crore."
Ironically, as the Government itself pointed out, even with the hike,
KSEB's monthly losses would have been brought down only to Rs 105 crore.
In fact, this was the second hike since the UDF Government's inception
15
months ago. For quite some time, Antony had maintained that the Government
had deliberately delayed the hike for three months so that the public
woudn't be hit.
A vocal opponent of surcharge is Industries Minister
Kunhalikkutty who until now had stonewalled any hike especially on industries.
His party, the Muslim League, had even passed a resolution against any
tariff hike. "Periodic tariff revision sends negative signals to
prospective investors. What is required is radical reforms to improve
the inefficient KSEB," he says. But despite much talk there has hardly
been any progress on the power sector reforms, an issue that the Asian
Development Bank (ADB) too has been pressing the Government on.
The hike revealed the crass inefficiency and rampant corruption in the
functioning of KSEB. Experts say that the hike would have
forced the public to pay for the inefficiency and lapses of the
KSEB. According to many the board could easily tide over its
financial crisis if it shows some will to collect the huge arrears
of electricity charges pending to it from various government
departments, public sector organisations and private companies. As many
as 46 private companies have run up an arrears of
more than Rs 250 crore while various government departments and PSUs owe
Rs 290 crore to the board.
"While the KSEB taxes ordinary people periodically it isn't even
a
bit keen to collect the huge amounts kept pending for years by the powerful
and influential sections like big industry and government departments,"
says R. Ramprakash, a small-scale businessman in Thriuvananthapuram. He
also points to factors like overstaffing, high salary bills, thanks to
the unionised staff, and power theft. But
clearly, there's no one listening.
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