Grappling with massive power cuts, India shuffles power minister

After India suffered another massive breakdown affecting 60% of population, M. Veerappa Moily made new power minister.

Afp/aditi Phadnis July 31, 2012

NEW DELHI: As 60 per cent of the Indian population was plunged into darkness for a second day after grids on the northern, eastern and north-eastern grids collapsed again on Tuesday, the Indian state machinery jumped into action with a high profile shuffle.

The grid failure threw more than 60 per cent of the Indian population in the dark and brought all essential services, including railways, hospitals, water supply and airports, to a grinding halt.

The failure followed a similar crisis in the functioning of transmission lines yesterday and covered the northern, eastern and the north-eastern grids that supply electricity to 20 states. The other two grids -- Western and Southern -- remained unaffected.

Authorities have been unable to determine the exact cause of the outage, though some have pointed towards heavy overdrawing of power from the grid by a few states including Uttar Pradesh, Punjab and Haryana to be a plausible cause.

“Around 3,000 Megawatt (Mw) of power has been overdrawn from the eastern grid. Strict action will be taken against the states indulging in overdrawal,” Power Minister SK Shinde told reporters on Tuesday. Drawing more power than scheduled from the grid is a violation of the Indian Electricity Grid Code (IEGC) and attracts penalty from the central electricity regulator.

Data showed that the nine northern states including Uttar Pradesh, Haryana, Rajasthan, Punjab, Uttarakhand, Delhi, Himachal Pradesh, Jammu and Kashmir and Chandigarh together drew 28.5 Million Units (MUs) of power from the grid before it collapsed at 2:30 am on 30 July. Some of these states have been drawing excessively from the grid in the past to avoid buying cheaper power from the market, sources said.

Trains were halted midway and batteries were used to haul them to the nearest stations. Banking operations were affected and the intercity metro shut down for several hours causing huge irate crowds to gather. Traffic signals shut down and airport operations were run on backup power.

India has had a historic power shortage which was compounded by deficit rainfall. Agricultural pump-sets were run twice as long, leading to overdrawing of power.

Finance, power ministers shuffled

Indian Home Minister P. Chidambaram was switched to the finance portfolio on Tuesday in a reshuffle that also saw the power minister promoted as a massive electricity failure struck the country.

The president's office announced that Chidambaram would begin his third stint as the head of the finance ministry, where he will be charged with re-firing India's spluttering economy.

He will be replaced at the home ministry by Power Minister Sushilkumar Shinde, who spent Tuesday tackling an unprecedented electricity outage that saw supplies fail in half the country, affecting more than 600 million people.

"There has been a small reallocation of portfolios," a senior official in the premier's office, Sharat Chandra, told AFP.

The son of a cobbler from the low-caste community, Shinde is a former police inspector who rose to become chief minister of the huge and politically vital western state of Maharashtra, home to commercial capital Mumbai.

He is seen as a staunch loyalist to the Gandhi family, which dominates the ruling Congress party, and has passed ahead of rivals to grab one of the biggest jobs in the government despite having a previously low public profile.

The opposition Bhartiya Janata Party (BJP) criticised the changes and there was incredulity on Twitter, where many users questioned the timing of his promotion.

"There is nothing much here to be lauded," BJP spokesman Prakash Javadekar told AFP.

The power portfolio will be added to the responsibilities of M. Veerappa Moily, the current minister of corporate affairs, who will have to tackle an electricity crisis that has deeply embarrassed the government.

The finance portfolio is currently being handled by Prime Minister Manmohan Singh, who took over from former finance minister Pranab Mukherjee when he resigned last month to run for election to become India's president.

Chidambaram was praised by economists for his pro-business budgets during his previous stints as finance minister, although he faced brickbats from left-wing parties for his pursuit of foreign investment.

Seen as a safe pair of hands by the ruling Congress party leadership, the former lawyer was asked to take over the home ministry after the 2008 Mumbai attacks, which killed 166 people and left India reeling.

India's once-booming economy grew just 5.3 percent between January and March, its slowest annual quarterly expansion in nine years, and the central bank issued new gloomy predictions on Tuesday.

The Reserve Bank of India slashed its GDP growth forecast for this financial year to April 2013 from 7.3 percent to 6.5 percent, while predicting that inflation at the end of the year would be higher than previously forecast.

Analysts have begun talking about India suffering from "stagflation" -- stagnant growth but high inflation -- and the government has been widely criticised by business groups for failing to introduce pro-market reforms.

There was no place in the cabinet for political pin-up Rahul Gandhi, scion of the Nehru-Gandhi dynasty, who had recently indicated he was ready to play a bigger role in politics.