The decision of the Delhi government to roll back the hike in power tariff is unfortunate. The lack of political support for power reforms from within the Congress party is as responsible for this roll back as the pressure from Delhi’s disgruntled citizens. It is good, of course, that the Delhi Electricity Regulatory Commission was not told to roll back its decision. The autonomy of the regulator was thus respected. The tariffs for commercial and industrial use of power will continue to be higher. The government will now provide a direct subsidy of Rs 150 to 200 crore — or half the losses the power discoms will bear due to the lower tariff — while the rest will be met by the discoms themselves.The public protest against the hike was also justified. Privatisation brought with it expectations of improved service. Private discoms clearly failed to meet these expectations. What was striking was that the protest was mounted by the well-to-do residents of Delhi, many of whom normally keep out of the political process. After losing faith in state electricity boards they had preferred, thus far, to quietly pay for private diesel generators and invertors to make up for power shortfalls. Even though the higher tariffs may not have hit their pockets too significantly, their protest was a statement that they were not happy with the service provided after privatisation. This new awareness and participation in public utilities bodes well, not just for the consumers themselves but the government, which can then legitimately put pressure on the discoms to improve their services or face the ire of customers. That consumers are unwilling to pay for the inefficiencies of power companies helps increase accountability.Delhi is an important test case for the privatisation of electricity. If it succeeds in this project, the country will see a lot more of such initiatives. If it fails, no politician will have the courage to go ahead with the privatisation of power. There needs to be greater pressure on discoms to reduce transmission and distribution losses and reduce costs. Higher competition by encouraging every colony to buy from alternative discoms can help put additional pressure on companies. Power reforms have a long way to go and although Delhi is having to pay the cost of learning to get this process right, it can set an example for the rest of the country.
