Private electricity

Expensive electricity and monopoly of the government as sole distributor is an enigma on the path of development. It has hampered production and there is no check and balance on the cost of utility, plunging exports and scuttling economic growth over the period of years. Thus, the recommendation of the Cabinet Committee on Energy to set up an Independent System and Market Operator (ISMO) to come up with a choice for consumers is a welcome development. It will help in listing multiple power production companies with their own customised tariffs, similar on the lines of telecom operators.

In the long run it could help address the existing financial strain on the exchequer due to circular debt, and also sort out technical issues such as theft and transmission losses. The abdication of government's role has long been desired, as privatising power generation will come with buoying the chain of foreign investment in such a vital sector of national importance, apart from fostering healthy competition.

While the initiative is worth appreciating, it will not happen in a jiff. Presently the government-owned entities are sole producer, buyer and distributor of electricity. Likewise, the transmission network is also owned by the state, and private entities will have to come up with a master plan of laying transmission lines and metering. The concept of chip-empowered electricity supply and the option to restrict self-consumption are avenues that can be a game-changer in the country's energy lifestyle. That is the way to usher in an efficient, transparent and competitive electricity profile, with the express intent to reduce circular debt and stabilise prices.

With the government and IPPs in a fix for many more years to come, an instant relief could come in the form of creating a new National Transmission Company and privatising DISCOs to handle transmission assets and future projects. This time around the deal is in need of transparency unlike the shady hush-up that went the IPPs way at the cost of national annihilation. Consumer interests must be on board.