Former Advisor to the Governor of Jammu and Kashmir and retired IAS officer Khurshid Ahmed Ganai has defended the recently announced 6.83 per cent electricity tariff hike approved by the Joint Electricity Regulatory Commission (JERC), saying the measure should not be criticised merely for the sake of criticism without considering the broader challenges confronting the power sector.
Ganai said periodic revision of electricity tariffs was an integral part of power sector reforms and was necessary for building a financially sustainable and robust electricity distribution system.
“It is rather strange that the NC manifesto carried a promise of free electricity to households up to 200 units,” Ganai said, questioning the feasibility of such a commitment in the absence of adequate government resources.
He said announcements of freebies were misplaced when governments lacked sufficient own resources to meet even committed expenditures such as salaries, pensions and maintenance.
“Announcements about freebies are always misplaced unless the governments are flowing with their own resources,” he said.
Ganai said periodic tariff revision was desirable for a robust power sector, arguing that the basic principle of consumers paying for services and subsequently demanding quality from service providers such as JPDCL and KPDCL could become applicable and justified only when tariffs were fixed after proper due diligence.
He said the tariff-setting process undertaken by JERC would have involved consultation with stakeholders, including power suppliers and distribution companies such as JPDCL and KPDCL.
Ganai, however, pointed out that the latest tariff hike alone would not materially reduce the revenue deficit in the power sector.
“It must be remembered that even this hike will not materially reduce the deficit in revenue collection,” he said, adding that aggregated commercial losses could still remain around 45 per cent or lower.
According to Ganai, this meant that only around 55 per cent of the actual power supplied would be accounted for through collections, while the remaining 45 per cent would continue to remain unaccounted for and classified as aggregated commercial losses.
In monetary terms, he estimated that such losses could amount to around Rs 4,000 crore annually.
Ganai said Jammu and Kashmir continued to rank among the highest in the country in terms of aggregated commercial losses in the power sector and called for comprehensive reforms to address the issue.
He said the government needed to address the challenges across the entire power sector, covering generation, transmission and distribution.
“The UT government must consider all power sector reforms from generation to transmission to distribution if it wants to ensure reliable power supply to the consumers in Jammu and Kashmir,” Ganai said.
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