PROBLEMS OF GRID POWER DEVELOPMENT IN INDIA:

SEARCH FOR PATRIOTIC SOLUTIONS

By Engr. K Vijayachandran FIE

(Paper for the Twentieth Engineering Congress of IE(I) at Kolkata December 2005)

Abstract:

Author is an engineering and management consultant based at Kochi. He had worked for Bharat Heavy Electricals Ltd. (BHEL) for nearly two decades and had reviewed India's power development programmes on several occasions, and in more than one capacity. He was a member of the taskforce of the Electrical Engineering Division of IE(I) which was entrusted with the responsibility of reviewing the Draft Electricity Bill 2000, by the President of IE(I), for providing feedback to the GOI.

India's national power grid built after independence has, today, an aggregate installed capacity of around 120 GW. However, even after 58 years of national independence, per capita consumption of electricity in the country continues to be ridiculously low, compared to that in more developed societies and the national grid continue to be fragmented and far from being fully integrated. Nevertheless, India's power development policy has helped, in a big way, to improve the quality of life of common man all around, made significant contributions in building a self reliant economy, and enabled the country to build up power system technologies, that are rated among the best in global market.

The paper reviews the failure of the recent reforms, in addressing the basic problems facing the power sector. Apart from the failure of the reforms, the paper examines the bleak prospects of the new statute, Electricity Act 2003, in the backdrop of our developmental experience of past half a century, with special reference to the federal character of Indian polity. The reported move by Government of India to solve the deepening capacity crisis in power sector, through massive imports of nuclear capacity and nuclear fuel from USA will be the end of the policy of self reliance and energy independence, as feared by many. The paper presents a patriotic alternative for restructuring the crisis-ridden power sector.

1. Reforms disrupt grid power development.

1.1 The 2200 MW Dhabol Power Plant in Maharashtra State, which is idling for the past several years is a true measure for the failure of India's power sector reforms.¹ These reforms, initiated in 1992 under advice from World Bank in 1992, was meant for force-opening the national market for electricity to foreign investors, who were put on a fast track and offered risk-free long term compensation for their capital, on an extremely liberal cost plus formula. World Bank advice militated against the economic rationale of developing national power grids and ignored the technological possibilities that existed in the specific Indian context: it was delivered under the
ideological and political compulsions of global capital.

1.2 When the so called global reforms reached India's Power Sector, under advice from World Bank, the Union Republic had already built, from near nothing, a national power grid of 75000

MW within a time span of four decades (see Chart-1), increasing per capita generation and consumption of electricity in the country by several fold, at an affordable cost to the national

economy and under the legal framework of Indian Electricity Act 1948². India had succeeded in building up the necessary organisations, enterprises and structures and a whole new generation of scientists, engineers, and other professional workmen, capable and competent to design and construct the complete range of power equipment and systems, needed for electrifying the country, using all forms of primary energy available within the country, including atomic energy. True, there were several deficiencies that needed correction but, the fact remains that, India is far ahead of even several among the developed countries, with regard to power sector technologies. Low cost electricity for 9 million farmers and 2 million small industries, electrification of over 45 million Indian homes and covering half million villages, within a time-span of four decades, were not mean achievements for this national programme based on self reliance. Achievements of India's power grid development policies after independence, in terms of capacity addition and macro level investment efficiencies were notewothy³. Average prices of electricity was less than half compared to global prices during the nineties: Even after giving allowance for the 20 percent revenue deficiency of State Electricity Boards this was no mean achievements with regard to cost efficiencies. Grid Power and related sectors were the fastest growing sectors of Indian economy till the nineties; a compounded annual growth rate of around ten percent and doubling of the physical output in every seven or eight years. Per capita generation and consumption of electricity had increased sixteen times by 1991, compared to the mere doubling of per capita GDP. Capacity additions had reached a peak of 4200 MW per year, without any FDI or large scale equipment imports and the reforms have slowed the growth rate during nineties as may be seen from Table-1: project inventory is drying up fast, and the first decade of the 21^st century will be virtual disaster, unless the present policies are reversed and reforms are rolled back.

TABLE-1 INDIA'S POWER GRID CAPACITY ADDITION OVER THE DECADES
DECADE	MW/YEAR
FIFTIES	300
SIXTIES	1000
SEVENTIES	1800
EIGHTIES	4150
NINETIES	3350
1ST DECADE OF 20TH CENTURY	????

1.3 Judging by export capabilities and performance, power equipment and systems should have been identified as an export priority sector for the country, even more expeditiously than the IT sector. It was obvious from the very beginning of the reforms that, foreign capital or FDI was not the solution for the problems faced by India's power sector. In August 2001, the then Power Minister Suresh P Prabhu had noted in his forwarding note to The Blue Print for Power Sector Development : "When I took over as Minister of Power in October last year, I realised that the Power Sector was at cross roads and if the trend of the nineties were to continue, power supply would deteriorate further and...."⁴. Later, in January 2002 in an interview to an economic journal⁵ he had categorically admitted that the policies of the past ten years have failed to address the basic problems of the power sector and the only way forward lies in improving health of the State Electricity Boards by restructuring their liability base and ensuring their financial autonomy.

1.4 Neither Suresh Prabhu nor his Blue Print for Power Sector could survive the World Bank initiative that had simply overlooked the social, political, economic realities of India, and the immense technological possibilities around its power sector: Reform enthusiasts within the country had already embarked on the wanton destruction of the administrative and legal framework built by the Union Republic for rapid development of grid power in the subcontinent; all in the name of facilitating FDI, opening up of the national market for grid electricity and bringing in competitive efficiency. The new Electricity Bill, drafted in a hurry and circulated, discussed and debated outside the National Parliament and State Legislatures and after numerous revisions finally got passed as Electricity Act 2003, by the NDA Government, for replacing the time-tested federal act of independent India, in an arbitrary and undemocratic manner⁶.

1.5 Despite steam-rolling by Union Government, Electricity Act-2003 could not be enforced effectively by the member states, due to the several irrational provisions that were detrimental to the interests of the country and people at large. State Governments are given time extensions and offered incentives to fall in line, and at the same time being compelled to demolish the SEBs as the earliest. During the one and a half decades of disruptive reforms, that included the illegal legislation that was violative of even the federal constitution of the Republic, State Electricity Boards (SEBs) which had functioned as the custodian of grid power development in their respective regions are being disbanded or rendered dysfunctional, the Regional Electricity Boards (REBs) that played a key role in enforcing grid discipline were marginalised, and the Central Electricity Authority (CEA) that played a key role as a federal authority, by pooling and co-ordinating the technological resources, was rendered toothless and ceased to be an authority at the national level. In the virtual anarchy that followed, the numerous public sector organisations, associated with grid power development in the country for several decades, like the National Thermal Power Corporation, National Hydro Power Corporation, Nuclear Power Corporation, Coal India, Oil and Natural Gas Corporation and other energy enterprises, Bharat Heavy Electricals and other Power Equipment companies, the Indian Railways and other numerous national enterprises in the private and public sector lost their organic linkages with the mission of nationalelectrification⁷

1.6 Power sector reforms have proved to be a costly and disastrous failure. In States like Orissa and Delhi where the SEBs were totally dismantled and reforms pushed with vigour large subsides are claimed by private investors and electricity prices have sky-rocketed. Shift to more costly petroleum fuels, neglect of indigenous coal and hydro electric resources, lack of planning for low cost energy at regional and local levels and consequent escalation of equipment costs have increased the average cost of electricity supplied to the consumer in India from Rs.1.09 in 1990-91 to Rs.3.04 in 2001-02⁸. With the destabilisation of regional grids and consequent instability and poor quality of supply, large industrial consumers are moving away from grid power to set up their own captive power plants. The national electricity generation policy and programs, which were given shape to, based on the Energy Survey of India 1965 and other national level assessments, were given a decent burial and the consequent shift in favour of costly imports as sources of primary energy is alarming. President of the Republic has raised an alarm on this count and has advised the UPA Government on the need for taking urgent steps towards energy independence for the country by 2015. Even this call by the President of the Union Republic has fallen on the deaf ears of our ruling elite, led by Prime Minister Manmohan Singh and his close associates are currently negotiating with USA, for solving the crisis in power sector through massive imports of nuclear fuel, nuclear power plants and related technologies that are targeted to give a decent burial to the atom for peace and other indigenous programmes of the Union Republic⁹. It is high time that, the patriotic forces in the country join hands in shaping up alternatives to the dangerous and subservient policies forced on the country, by a coterie of self seeking professionals politicians. This document is intended to serve as a guideline for working out a patriotic alternative policy in detail.

2. The New Legal Framework:

2.1 When Electricity Act 1948 was formulated by independent India, grid power technology was already accepted world-wide as the least cost option for electric power, within a given socio-economic and political boundary. Generator sizes and transmission voltages were steadily increasing with the advent of new technologies, however the Indian Act was flexible enough to accept a variety of technologies and diverse mix of ownership types, public, private or co-operative. SEBs were designed to enjoy maximum regional autonomy under the effective technological supervision of a federal authority, the CEA, at the national level. But, the federal character of the 1948 Act got substantially eroded, thanks to the relatively powerful and more elaborate economic planning mechanism developed at the Central level.

2.2 CEA and the Central Government had wielded power and authority without responsibility, and as a result, SEBs had lost, altogether, their sense of accountability. Even the State Legislatures, to whom SEBs were accountable as per the statutes, usually took an extremely lenient view in monitoring their performance. With the formation of National Thermal Power Corporation (NTPC) on the advice of World Bank in mid seventies and later the National Hydro Power Corporation (NHPC), the Central Government started playing an even more pivotal role in grid power development, through their massive investments in generation and transmission. Involvement of large central public sector undertakings in coal, petroleum, atomic energy, and surface transport sectors, in power development, was yet another factor that considerably enhanced the role of Central Government in power development. However, the consequent erosion of autonomy of SEBs and bureaucratic controls by CEA were, by and large, tolerated and condoned by the people, thanks to the patriotic role played by Central Government and its Planning Commission. Even the 1998 Regulation Act and the setting up of the Regulatory Commissions at the State and Central levels were accepted by many as a positive steps for correcting the distortions in tariff policies.

2.3 However with market forces beginning to replace national planning and consensus, there was a qualitative change and bureaucratic interventions from the Centre, as in the case of Dabhol Power Station, and are seen by the State Governments as mere patriotic pretensions. The recent initiative by UPA Government to barter away energy independence of the country by granting numerous concessions to USA, Europe or Japan through bilateral agreements in nuclear power is yet another example of federal authority being misused by the Central Government. The Electricity Act of 2003 was intended to legitimise these arbitrary actions by the Central Government that is not in the best interests of the country at large. The key objectives of replacing the old act with the new one were obviously¹⁰:

(i) to demolish the State Electricity Boards, the statutory bodies owned and managed by State Governments, and accountable to the State legislatures, elected by the people.

(ii) to terminate the role of these statutory bodies as the custodian of grid power development at regional level.

(iii) to put an end to the federal character of grid power development in the country and bring it under the exclusive domain of the Central Government and its bureaucracy.

and (iv) to open up of the national markets for electricity and power equipment to global capital and foreign monopolies.

2.4 This new legislation, therefor, is a conspiracy against the Union Republic and its federal character and should be rejected lock, stock and barrel. Federal character of the Central Electricity Authority need to be restored and their accountability to the National Parliament strengthened. SEBs should have full autonomy under their respective State Governments, should be fully accountable to the State Legislatures as envisaged in the 1948 Act and function under the technological supervision of CEA. Operation and management of SEBs need to be rendered more transparent, responsive and effective, with the help of modern management methods. All these are possible without changing the basic features of the 1948 Act which has stood the test of time and facilitated rapid grid power development in the Union Republic.

3. Restructuring of State Electricity Boards.

3.1 Despite their poor financial performance, lack of autonomy, and bureaucratic organisation, SEBs has developed over the years, as the custodians of grid power development in their respective regions. With about a million strong skilled work force, disciplined under the Electricity Act 1948, and an extensive T&D network built up across the subcontinent, SEBs represent a formidable organisational resource. They need to be further strengthened as autonomous organisations, their efficacy improved in every possible direction and accountability to State Legislatures and State Governments ensured as visualised in the Electricity Act 1948, in letter and in spirit, through reforms, re-organisation and retraining at appropriate levels.

3.2 Responsibilities assigned to SEBs, under the 1948 Act are quite comprehensive and spans the entire spectrum of activities related to grid electricity, from development of grid power within the State boundaries to its efficient operation and management and, aimed at the delivery of electrical energy to various category of users, at minimal possible costs to the society at large. These responsibilities are very much similar, in content as well as coverage, to those entrusted with the EDF of France, as a public utility owned by French Government which is considered a role model for European Union, in terms of physical and financial performance.

3.3 The Eighteen Member Director Board of EDF enjoys extensive professional autonomy under the French Government. One third of its directors (six) are full time functional directors, appointed by the French Government, another third is elected by EDF employees and the remaining one-third nominated or elected by consumer organisations ¹¹. In deciding the policies and programmes of EDF as well as its performance evaluation, French Parliament and its Committees play a vital role. We may take lessons from any number of such examples, from socialist as well as market economies, while re-organising the SEBs into more efficient public utilities.

3.4 Experience from all over the world seems to be converging now to the inevitable conclusion, that competition model is a next to impossible alternative for organising public utilities, which had naturally and traditionally developed under public ownership, through a long historical process of social and political consensus. Unlike other businesses, Grid Power has social and economic boundaries and just as in the case of a National Economy, it cannot be conceived and embodied, devoid of a political patron. Experiments in building up pure non-political model custodians and regulators for grid power have failed even in developed countries, with far more advanced management and regulatory systems. Promises of building up more efficient management systems and organisations, purely based market relations, are tall talk and meant for destabilising the human resources and organisational assets, the country has built over the past four or five decades. The process of dismantling of SEBs should be, therefor, reversed immediately and urgent measures initiated towards a set of rational reforms, drawn in the best interests of the country and its people. And even more, in a federal set up every State should have the freedom to choose its own model of grid-power development, and the Central Government, has no moral or legal right to force its preferences on the States, after withdrawing itself from patriotic responsibilities and having succumbed to the pressures of the global financial market.

4. Federal or Central Electricity Authority:

4.1 Though the Central Electricity Authority (CEA) as per the 1948 Act was to function as a Federal Authority its members and the all powerful Chairman were to be nominated or appointed by the Central Government and that was in line with all other Federal Authorities or Commissions constituted in the Union Republic. This practice was different from the Federal Structures created in Soviet Union, where the autonomy of State level institutions were federated into a central organisation which derived its authority primarily from its federal character. Even in the United Kingdom with a Unitary Government, the erstwhile Central Electricity Generation Board (CEGB) was a truly federal authority, formed by federating lower level regional boards, which had enjoyed full functional autonomy in their respective regions. Functioning of the CEA need to undergo basic changes, in order to facilitate centralised policy making in the best interests of the country, and effective decentralised administration by granting full autonomy at the State level. Electricity Act 2003 does not address this much needed reform for democratic decentralisation of administration, related to grid power development in the country. On the contrary, it has further reinforced the arbitrary powers grabbed by Central Government even while working the earlier statute.

4.2 According to the new Act. Central Government will appoint the 14 members of the CEA (section 70.4), of which six will be full time members, including an all powerful Chairman. Power policy will be drawn up by the department of power, ie the bureaucracy of the Central Government, and detailed implementation plans will be drawn up by the CEA. With the disbanding of the SEBs there will be virtually no agency to function as the custodians of State Level Grids: neither the transmission utilities nor the regulatory commissions at the state level can assume this vital role. This will lead to a situation, where the elected Governments at the State level and State Legislatures will have virtually no role to play in deciding on national policies and programmes for grid power development. The central bureaucracy in the Department of Power has already started acting on these lines and the CEA has published a power policy drafted by DoP in February 2005. This was followed by Draft Transmission Plan by CEA in July and everybody, including the State Governments are supposed to comment on these documents published through the internet.

4.3 The Electricity Act 2003 and the subsequent disbanding of SEBs will fundamentally change the Centre-State relations in the power sector and undermine the federal character of its predecessor, in favour of the Central Government, whose patriotic postures are becoming increasingly suspect by the day. Plans for the electrification of the country are now being discussed by the Prime Minister not in the Indian Parliament but in Paris and Washington, even whatever remains as CEA today is sidelined in all substantial dialogues with Super Powers. CEA had earlier derived its federal strength from the SEBs and once these State level organisations get disbanded, it will cease to exist as a federal authority and what remains will be its mere bureaucratic shell. This trend need to be challenged and reversed and the call of the President for working towards energy independence was a timely one. It needs to be remembered that, only SEBs with full functional autonomy at the state level can mobilise local energy sources, including hydel and other renewable resources of energy, to the best advantage of the local communities and the country at large. The new CEA is bound to be a mere appendage of DoP, of Central Government bureaucracy, whose principal concern has been to open up the national electricity market to global capital under the dictates developed countries, the World Bank, and other multilateral agencies.

4.4 The right organisational approach will be to federate the SEBs into a Central Electricity Authority¹²: All the Chairmen of SEBs should be ex-officio members of CEA, a full time Chairman appointed by the Central Government and the DoP of Central Government working as the secretariat of this truly federal body. Policies, programmes and plans drawn up by CEA should get the approval of the National Parliament, after detailed deliberations in the relevant subject committees.

5. Regional Electricity Boards:

5.1 Though not a creature of the 1948 Act, the Regional Electricity Boards (REBs) have evolved over a time, as a very useful forum and instrument for co-operation among neighbouring SEBs, not only for maintaining grid discipline and co-ordination of load despatch but also for planned development of generation-transmission systems. These organisational structures will be of great use and relevance for the consolidation and expansion of regional grids, as the first step towards building up a strong and stable national grid. Surprisingly REBs do not find a place in the new statute. Regional Power Committee to be appointed by the Central Government (section 1.55) on a case to case basis is not a substitute for the REBs, which are the voluntary associations of zonal or neighbourhood SEBs. Based on the lessons learnt from past operations, scope of REBs could be further enhanced for ensuring more meaningful regional co-operation for common good.

6. Other Enterprises in Power Sector

6.1 There are the generating and transmission companies like NTPC, NHPC, NPC and NGPC, suppliers of primary energy like Coal India, ONGC, GAIL, and NFC in the Central Sector and they are directly related to grid power development at the national level. Railways move fuel across the country and BHEL is the major supplier of power equipment. India's power development programme of the past was a massive co-ordinated effort among all these core sector enterprises, now generally designated as Navaratna Companies under the Central Government. Their efficacy and accountability to the National Parliament need to be improved and strengthened, through appropriate management reforms and participation of employees in the management at the Board level, on the lines extensively practised by the national enterprises in Europe in the public as well as private corporate sector¹³. India's Working Class, employees of these enterprises, as well as TU movement in the country, are mature enough to take on such patriotic responsibilities. It is only legitimate that, representatives of State Governments are inducted in turn, into the BoD of Navaratna companies owned by the Central Government, taking into account their patriotic relevance and national importance. It is futile to imagine that, their performance can be improved by selling off their equity shares in the stock market or by seeking strategic partners, instead of trying to ensure the serious involvement and commitments by the real stake holders of these enterprises. Such theories are to be openly challenged and a bold alternative approach for managing the Navaratna Companies presented for a national debate.

7. National Energy Commission

7.1 Warning given by President Abdul Kalam in his independence day message, on energy security, are based the recent trends in energy consumption. The rapid shift during the past one decade, in favour of petroleum fuel and away from coal, for which our estimated reserves is over 220 years in terms of current consumption, is disturbing as obvious from Table-2 below:

TABLE-2 CONSUMPTION OF PRIMARY ENERGY-MILLION TON OIL EQUIVALENT Source: BP Statistical Review of World Energy June 2005
	YEAR 1994		YEAR 2004
	QUANTITY	PERCENT	QUANTITY	PERCENT
OIL	67.4	29.3	119.3	32.9
GAS	16.6	7.2	32.1	8.8
COAL	126.9	55.1	188.8	52.0
NUCLEAR	1.1	0.5	3.8	1.0
HYDRO	18.2	7.9	19.0	5.2
TOTAL	230.2	100.0	363.0	100.0

7.2 President had emphasised the need for better and wider utilisation of our coal resources and for stepping up the research on breeder technology and on the use of Thorium; India accounts for 40 percent of global Thorium reserves¹⁴. His stress on energy independence is to be seen in the context of our ruling elite seeking a nuclear solution from the US, for the present crisis precipitated by power sector reforms. Contracting some 20 to 25 thousand MW of Nuclear Power for the Indian grid, as part of a new friendship treaty with the USA, will be suicidal for the country and will kill the possibility of the country becoming energy-independent for ever.

7.3 India has attempted its first comprehensive Energy Survey in the mid sixties and this report had played a key-role in shaping up our energy and grid power development policies. The stress given to, mine-head super thermal power stations and cross country transmission lines in our power development programme, is just an example. Better and wider utilisation of Indian black coal was a principal objective of R&D programmes of several national institutions and public enterprises including BHEL^15. Energy Survey Report of 1964 had several limitations but, in terms data access and data availability, as well as analytical capabilities, the country has made a quantum jump during the past few decades. As suggested by the President, it is within our capabilities to complete a National Energy Survey within an year, and bring out a draft energy policy for national debate within an year. Energy is the lifeline of technological societies and a National Energy Commission, serving as a permanent watchdog for the energy security or energy independence of the country, will be a desirable proposition.

8. Patriotic alternatives for the power sector:

8.1 Power sector reforms initiated in early nineties, under World Bank advice have done immense damage to the institutions and capabilities built in the country after national independence, for grid power development. Despite several short comings, this dispensation had helped to electrify the country in a big way at an affordable cost to the national economy: per capita generation and consumption of electricity had increased nearly sixteen times in the forty years from 1950 to 1990, when the per capita GDP had hardly doubled. India has proved itself as a highly competitive exporter of power system technologies and equipment and seeking FDI as a solution for India's power sector problem had made little or no economic sense. Pursuit of such absurd solutions have only complicated the problem, as confessed by Suresh Prabhu, within an year of his work as the Minister for Power in the Union Cabinet⁵. The new Act of 2003 is meant for further strengthening the dictatorial powers of the Central Government over the member states of the Union Republic. This dangerous policy shift needs to be reversed in the best interests of the country and unity of the Indian people. Patriotic alternatives for the power sector are briefly:

(1) Scrap the Electricity Act 2003 and seek solutions for the present problems, within the framework of the Old Act and restore the status of SEBs, as the custodians of grid power development in their respective regions. Scrap all the newly created regulatory bodies, and strengthen the watchdog function of the State Legislatures elected by the people, as envisaged in the 1948 Act.

(2) Strengthen the federal character of Central Electricity Authority by having the SEB Chairmen as ex-officio members, with its own Chairman nominated by Central Government and the Department of Power acting as its secretariat. CEA should be the custodian for the national grid, technology policies and accountable to the national parliament through its appropriate subject committee(s) with regard to plans, budget, policy formulation and policy audit.

(3) Re-organise the SEB institution with an 18 member board, on the EDF pattern, with one-third members nominated by the State Government concerned as full-time functional heads, another one-third as part time members elected or nominated by user organisations, and the last one-third elected by employees of the SEB through secret ballot.

(4) Restore the financial autonomy of SEBs by suitable one-time restructuring of the liabilities, on the lines already suggested by numerous expert committee reports and by insisting on a tariff policy that ensure a minimum return on the assets deployed by them. Plans, budgets and performance need to be reviewed by the legislature or its appropriate committees as provided for in the statutes: subsidies and cross-subsidies should be the exclusive prerogatives of these legislative committees.

(5) Expand and enrich the scope of REBs to take on more responsibilities through mutual co-operation among member states not only in grid operation but also in planning for capacity addition, R&D and human resources development.

(6) Strengthen the Navaratna Companies participating in the power development programme, by stopping all divestment measures, improving their management with the participation of State Governments at the Board level, participation of workers in managing the enterprises or co-management principle, as widely practised in Europe, and improving their accountability to the National Parliament.

(7) Appoint a National Energy Commission for ensuring energy independence, as suggested by the President, and decide on a technology policy for grid power, with regard to sources of primary energy in the best interests of the nation on a long-term basis, launch an R&D programme for power sector, based on a broader national perspective and put an end to arbitrary initiatives by all and sundry.

(8) Give priority for the development of Thorium based power generation technologies, taking into account, the sizeable indigenous reserves of this mineral and the substantial progress India has already made in developing breeder technologies. International co-operation, joint programmes with other countries and choice of partners should be guided by this long-term national perspective.

(9) Standardise the size and working parameters of power plants and transmission-distribution equipment and embark on a national technology plan and a well co-ordinated production plan for power equipment, taking full advantage the large internal market so as to minimise the investment costs; India is likely to be the largest single national market for power equipment for quite a few decades to come, and this favourable factor should be fully made use of.

(10) Recognise the large export potential of power plant equipment and related services from India and direct the Exim Bank of India and other Financial Institutions to promote export business in this sector on a priority basis.

REFERENCES

1. Dhabol power plant of Enron was forced on an unwilling Maharashtra Government and Maharashtra Electricity Board by the powers that be in Central Government. The conspiracy is fairly well researched and documented by many authors. Several official documents, including the submissions and pleadings made before the Maharashtra High Court as part of a public interest litigation against the project, are also available to substantiate the conspiracy theory.

2. Indian Electricity Act 1948 Act was intended for the rationalisation and development of electric supply industry on a regional basis because of the federal character of the Government of India and electricity was included in the concurrent list in 1950 by the constitution makers. In 1956 investments in generation and supply of electricity were brought under the exclusive responsibility of the Government and included in Schedule A of the Industrial Development Act, however private companies could continue as licensees.

3. A detailed economic analysis is given in 'India's Power Sector-Problems and Prospects'-a study report prepared by the author in 1992 and published by the apex committee of Officers Associations in Power Sector.

4. See the forwarding note by the Minister for 'Blue Print for Power Development', published by Ministry of Power, Government of India, August 2001

5. See Business Line of 22 January, 2002.

6. First draft of Electricity Act 2003 was published and discussed outside the Parliament for mobilising media support. This by itself was an extraordinary procedure. It had to face serious criticism from several professional bodies including Institution of Engineers (India) as well as Trade Unions. There are serious reservations about the constitutional validity of this Act; Electricity being a concurrent subject under Indian constitution its implementation continues to be problematic. Central Government is resorting to coercive methods on the member states of the union for compliance.

7. See section 2.2 of reference 3 for an overview of the supply side capabilities developed by India as an integral part of this programme based on self reliance.

8. Estimated by Prabir Purkayastha of Delhi Science Forum and reported in his study report, 'Power Sector: From Light into Darkness'. According to him, aggregate financial losses of SEBs was only Rs. 3748 Crore in 1990-91and after ten years of reforms this had jumped to 26639 Crore.

9. See the reports on the MOU signed by MM Singh, our Prime Minister with President Bush, during his recent visit to USA in August has an explicit mention about the promises made by US for solving India's problems in the power front through the nuclear route and several columnists are busy creating a conducive environment for this within the country. India's vote on Iran in the IAEA is the result of the pressures generated by the US lobby.

10. A detailed working paper on these lines was prepared by the author as in input for the work of the task force appointed by the President of the Institution of Engineers (India) and the same was later published by the Karnataka Engineers Association, Bangalore in August 2000. Author was a member of this task force set up by this professional body which had pleaded for the continuation and further strengthening of the institutional mechanisms and organisations set up for national grid power development.

11. Public Utilities in France are efficiently managed by giant public enterprises with the elected representatives of employees and user nominees on the Director Board as in EDF.

12. Similar federal management principles were widely practised in the Soviet Union, taking into account the multinational character of the Soviet State. They have survived even the dismemberment of Soviet Union and continue to facilitate joint initiatives by independent countries under the new CIS dispensation. Practice of such federal organisation principles can go a long way, in preserving and reinforcing national unity as well as resisting imperialist manipulations of national plans and policies through the Delhi regime. India can learn a lot from the management innovations of the Soviet State in the working of its federal polity.

13. Large business organisations of national importance, even in the private sector, in Germany and other EC countries, are under compulsion to practice what is known as Industrial Democracy or Co-management systems. Website of Siemen, the multi-billion dollar German MNC, gives a fairly detailed account of the co-management system practised in that organisation, starting from the top policy making board down to shop level joint consultative committees.

14. Current R/P Ratio (Reserve to Production Ratio) in years for fossil fuels for India and the World are reproduced below from BP Statistical Review of World Energy June 2005:

	India	World
Oil	18.6	28.9
Gas	31.3	66.7
Coal	229	164

15. While working for BHEL in 1977-79, the author was the National Level Co-ordinator for its Coal R&D Programme. This multi-disciplinary programme was aimed at better and wider utilisation of Indian coals, and in co-operation with several national agencies like FRI Dhanbad, RRL Hyderabad and BARC, Mumbai.

END

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