Why free power worked for YSR

[kantharao]

When YSR went to the polls with his free power promise in 2004, Chandrababu Naidu was ecstatic. “Good. Power lines can be used to dry clothes,” he said with the enthusiasm of Mike Tyson anticipating a match up against a bareknuckle puncher. He said the power system would collapse under the onslaught of the “unimplementable” promise. Five years on, the free power scheme is still going strong, the power system is doing well, thank you, and look who’s promising free power for 12, not just seven, hours.

It’s the kind of U-turn that makes you think that the signal Mr Naidu frequently flashes is a U-signal.

Naidu was not the only naysayer. The World Bank, rather self-conscious about its pally-pally relationship with the Naidu during the nine years, said ah, well, um, you know, free power may lead to indiscriminate drilling of borewells, and prove environmentally damaging. Montek Singh Ahluwalia raised his eyebrows in restrained alarm. Even Manmohan Singh advised caution.

Cynics said the free lunch would not last. They had the example of the Amrinder Singh government in Punjab which pulled the plug on free power after only a few years. The Maharashtra government too fell by the wayside. The media, full of people who believed that Sensex was sustainable at 21500 but not a subsidy of Rs 2300 crore in an economy of one lakh crores, waited for the inevitable to happen. It did not.

Telling testimony for the free power policy comes from farmers themselves: five years since the Naidu years ended, farmers’ suicides have abated. Farmers have in fact gone on to achieve record foodgrain production of 196 lakh tons. Arguably the copious rainfall seen in the YSR years played a big part in this achievement, but free power, supplied to 25,51,389 farmers, has played a no mean part.

Despite spiralling fuel and power purchase costs, Andhra Pradesh today is among a select few states with the lowest domestic power tariff of Rs 2.30 per unit. Tariff for industry too has been brought down from Rs.4.26 to Rs.3.56 per unit. There is also a 0.75 paise per unit rebate for new industries and Rs 1.00 per unit rebate for food processing industries. Nearly 13.92 lakh poor domestic users who consume only 15 units of power enjoy a monthly subsidy of Rs 10 under the ‘single bulb’ scheme. Residents of SC/ST colonies and tribal hamlets enjoy waiver of power surcharges.

The eagerness with which AP farmers received free power needs to be seen in the long lead up to it. The nine years of Naidu saw progressive implementation of what were called power reforms. First the lone electricity authority was unbundled with separation of the transmission, generation and distribution functions. Tariffs were entrusted to the AP Electricity Regulatory Authority with a World Bank mandate of relating tariffs to costs. Thus tariffs were raised eight times in nine years. Subsidised tariff for agricultural pumpsets was raised from Rs 50 per horsepower to Rs 350. The last tariff hike of 14.5% literally broke the back of the camel and led to the violent agitation by Congress and left wing parties in August 2000. In a context of drought and destitution, steep tariffs triggered violent protests by farmers already beset by drought, high input costs and low returns from the free market.

YSR’s political acumen lay in recogning the vote value in persisting with the free power promise although it had fetched him no great benefit in the 1999 polls. The 2004 polls were held in an atmosphere of utmost farmer distress. YSR saw it and Naidu didn’t. The welcome this promise received shocked Naidu. He has still not recovered from the disorientation from that shock.

Source: www.votecong.com