When the Electricity Act of 2003 replaced the earlier one of 1948, the planners of the Central Government did not anticipate the possible fallout of this legislation. Earlier, electricity was not considered as a commercial product, but an essential lubricant for development and industrialization. This native wisdom was given up later and its tariff now is determined by the principles of demand and supply. However, unlike the history of many developed countries in its formative years, economic fundamentalism is operating in India in the name of correcting market distortions. Thus, the electricity is available in the peak hours in premium prices. In the backdrop of FRBM Act, of which Bihar is a signatory, controlling the deficit is the key agenda and purchasing electricity with premium price tag in the peak hours tantamount to giving up financial prudence.
Any fundamentalism is bad, either religious or economic, because it destabilizes both social cohesion and developmental agenda. The recent firing in Khahalgaon against the agitating masses for non-supply of electricity from the NTPC plant to the local area was possibly one of the first mass revolts related to power deprivation. All indications suggest that the incident will have Domino effect, unless the present electricity act is repealed and the Central Government brings about fundamental change in the energy distribution policy. The poor states are unable to cope with the consequences of commercialization of electricity. If during the ‘peak hour’ of the day, electricity is made available at a premium price (say, Rs. 10 per unit), then even a rich state will move towards bankruptcy to fully meet the consumer demand for electricity.
The immediate cause of consumer cataclysm in Khahalgaon in the district of Bhagalpur, was near power famine in its surrounding area for months. Even though the ‘power’ from the plant glittered the metropolitan cities, its immediate surrounding was engulfed in darkness. The deprivation from electricity got aggravated in the cold nights in winter.
Gone are the days when ‘freight equalization’ allowed the mineral resources of united Bihar to serve the outside interest without protest. With the unprecedented societal empowerment and subsequent vivisection of the state, there is now concurrent reverse ‘cost and benefit analysis’ by the subaltern. Will the mammoth industrial edifice, located in one of the most backward region of the country, go unchallenged by the displaced, when its fruits are not benefiting them? The patience of the subaltern could not be held indefinitely in Khahalgaon. Initially it started as an unorganized movement, later it gave way to formation of Nagarik Sangharsh Samity. The social base of this non-political movement was from the lowest strata and not by the Chamber of Commerce or Industries Association, who normally get subsidy from the state. The movement was led by the faceless people who infact had subsidized the post-independent industrialization of the country through their tear, toil and unbound labor. The bulk of them belonged to the scheduled caste, backward caste and the Muslims. The movement also unfolded brilliant secular cohesion, belying earlier scar of the communal conflagrations in the district. This was indeed an authentic bottom-up empowerment for energy deprivation. This was not a proxy political movement to destabilize the provincial government, but essentially clamored for energy equity for those who were affected by the establishment of the power plant. The movement got further legitimacy, because the Union Power Minister, Sushil K. Shinde, had earlier promised uninterrupted power supply in the surrounding areas. When the hope got bellied, movement triggered. The maturity of the movement could be seen from the fact that, when ‘Bihar Bund’ was called on two successive days after the firing, the locals did not join the protest. The Kahalgaon incident should not be seen as a local flash in the pan event. It might replicate elsewhere in the country.
Even though Bihar is witnessing now a turn around in governance, the movement against the central government power plant was an ‘autonomous’ fall out. As a historical baggage, Bihar is practically not producing any electricity, except about 60-70 MW from the Barauni Thermal Plant. Most of its power plants have gone to Jharkhand. Against the peak need of 1500 to 1800 MW energy in Bihar; it has been allocated 1170 MW. Even this allocation is not provided fully. On an average, Bihar gets between 550 to 600 MW of electricity; the rest is met on the basis of peak hour premium tariff. The energy need in Patna town itself is about 325 MW. When the consequences of Nitish Kumar’s developmental governance unfold in the next couple of years, the energy need in the state will leap frog. Irrespective of energy production base of the state, Bihar has a commitment to supply 75 MW energy to Nepal. In contrast, there is no reciprocal agreement with the neighboring country to control the floods from its numerous rivers. Apart from ensuring energy supply abroad, it has to extend this munificence of equal magnitude (75 MW) to ‘railways’ as well, the richest ministry of the central government. Ironically, the quality of governance in Lalloo Prasad’s ministry will be determined by the quality of energy subsidy provided by the state government.
While NTPC is committed for production of energy, it is not concerned with distribution. Its Khahalgaon plant did not follow even the basic grammar of corporate responsibility. Instead of positive intervention of social service, negative intervention of firing was encouraged. Selective favors were given to one section of the lower government functionaries. Infact, the Government of Bihar had to reinvent itself and co-opt the responsibility of the NTPC. It is now discharging corporate responsibility and ensuring social tranquility around the plant in Khagalgaon, by supplying uninterrupted power by purchasing premium price energy. The energy bill of the Bihar State Electricity Board (BSEB) is already staggering. The Government of Bihar provides nearly Rs. 70 crore monthly to the BSEB as a subsidy, to keep its financial balance. Over and above, Bihar has to buy daily about 80 to 90 MW energy at premium price. Will public finance prudence allow the state government to subsidize energy need of a foreign government, government of India ministry and public sector undertaking located in its own geographical area indefinitely? If the economic periphery of the country is exploited unabated, will it be possible for the central government to continue its writ in the country unaffected?
* Member Secretary, Asian Development Research Institute (ADRI), Patna
