Sunday, March 23, 2008

Modi Series Part3: Innovative way to supply 24*7 power to rural areas

During 2002-2003, Modi increased power tariffs on farmers. This created an uproar and BJP's BKS unit i.e Bhartiya Kisan Sangh unit criticised him badly. He also was so strict that he asked police officials to arrest all farmers who stole power from power lines. This made him an anti-farmer politician. However, when the issue was analyzed in another way, Energy and Petrochemicals Ministry reported to Modi that the problem doesn't lie with farmer, but the pattern of power supply given to villages. The problem was that government was giving uninterrupted 14 hour supply of power and only a single feeder was used both for rural household and farmlands for irrigation. So, a farmer was using pumpset to continuously draw power for 12/14 hours for his lands. The rural household never got electricity after this continuous power consumption. Hence, they stole power. The Gujarat Electricity Board was having losses of Rs.1900 crore. When asked for a solution, the officials replied that if 2 individual feeders are used, one for irrigation and one for household, then power theft will be avoided and at the same time farmers will get power supply for lands and their homes.

Modi wanted to score here a point. He asked to try this on a sample of 50 villages. The results were shocking. Within a year the losses dropped to 935 crores. Now, he wanted this to be done across all villages in Gujarat. In the assembly once Modi spoke that in 1000 days he wants this to be done and everybody said it was impossible. In fact, Congress leader, Waghela advised Modi not to make tall claims. However, Modi went ahead.

Plan of Action: Renamed Gujarat Electricity Board as Gujarat Urja Vikas Nigam Ltd (GUVNL). This was now unbundled into 6 companies - 4 for distribution, one for transmission and one for generation. Within 30 months, 56,599 km long cables and 12,621 new transformers were laid with a total cost of Rs.15,000 Crore. Can you believe in just "30 months"? This is not fiction. This is not simply statistics. This is a reality. This is a dream that people wished for years to come true.

Scheme: Rural household will get 3 phase uninterrupted 24 hour power supply and 8 hours uninterrupted power supply for irrigational purposes separately. In a record time of 30 months, a miracle was seen. Digital electronic meters were used to avoid power thefts. Within 2 years, the revenue was +187 crores. In 2008, it is estimated to be Rs.400 crores.

Reality: There are still few villages not received this power supply like Anand, although their percentage is 10%. Congress anyways made big issue of even this 10%. Power theft happens,but in very few places. The plan is a grand success. On Nov 13, 2006 when electrification was complete and all 18,065 villages (even if we remove a few hundred which have not yet received) received it, Modi invited APJ Kalam to inaugurate the same in Champaner in Panchmahal district. Here is the Economic Times article on this. Gujarat became the first state to have 24*7 electrification of rural households. Click here to see what an Indian in the US felt when he went to a village in Gujarat after several years.

Despite power generation to villages, Modi knows that he is still far away from the projected demand. Hence, to generate more power he has signed MoU's with private players like Adani, Essar, Tatas etc. In fact the article says that despite erratic supply of power in many villages, the fact that power has reached so many villages in record time of 30 months is applaudable.

In one of the hoardings, the caption is "If you want Gujarat to become Japan, talk about development. If you want to turn Gujarat into Bihar, talk about casteism"


In a study done by Institute of Rural Management, Anand, IRMA, it is claimed that 33% rural to urban migration has stopped ever since electricity reached villages. It is simple - if electricity is available 24 hours in homes, farmers can involve in small businesses and earn additional income. Presence of electricity creates immense opportunities. Many mini businesses have also employed farmers for some small tasks (of course with money for doing them) because there is electricity. In fact Abdul Kalam while inaugurating the Jyotigram scheme told - "With this important infrastructure in place, Gujarat can think of complementing it with the connectivity’s such as physical connectivity, electronic connectivity and knowledge connectivity to the rural complexes, leading to economic connectivity of the village complexes. "

My point: There are no doubt failures in some villages, but the fact that today Gujarat surpasses even Andhra Pradesh in terms of electrification and the fact that it has become first in the country to achieve 3 phase (not just single phase) rural electrification is a miracle in itself!!

Kudos to Mr. Modi. Finally I would like to write that the success of this plan will continue to depend on what prices farmers will continue to pay in terms of usage. In other words, when power tariffs become higher, how will the government manage to convince the farmers and ensure that they have enough money to pay them.


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