Election Time And The Political Ideas For India’s Energy Future

Election time and the political ideas for India’s Energy Future by Yasir Altaf/Nishit Pande, New Delhi, April 09 2009

On the eve of election, the energy platforms that various political parties are offering voters reflect contrary designs of India's energy future. Till date, India lacks a comprehensive and integrated energy policy and strategy. However, in the days ahead, energy will become one of the pressing economic issues and can ruin many growth scenarios of India if not addressed quickly. Energy Security will be the fundamental determinant of both our economic growth and national security. The Planning Commission envisions power shortage as the single most important infrastructure bottleneck facing the country. So what do our political parties have to offer when it comes to decision making with regard to country's energy policies? On ground, both the Congress and BJP’s energy policy proposals look similar with impetus on fast tracking the generation capacity additions, energy security and reducing the greenhouse gas emissions to address climate change. But looking beneath, there are fundamental differences in the fine print and foundation. While Congress believes in engaging itself in vigorous energy diplomacies for energy security goal, BJP goes with the philosophy that energy security begins at home with more investments in alternate and renewable energy and indigenous nuclear program. However, India should not ignore the bare reality that every bit of modern technology India uses has been developed elsewhere. Moreover, energy independence means protectionism and isolation and is in direct opposition to the long term interests of the nation. The Congress did everything to set the stage for nuclear renaissance in its current term at the office and now plans to capitalize on the unprecedented opportunities it created by ending India’s nuclear apartheid. On the other hand, BJP wants to try to do everything on its own in this department without any help from the global nuclear industry. However, India on its own cannot meet the technology, fuel and huge investment needs for this sector. It is therefore imperative to have policies tailored to attract foreign direct investment and collaborations with global majors to enable technology transfers which in turn will facilitate the development of domestic expertise critical for sustaining the sector. The Congress proposal of extending subsidies under the banner of accessibility and affordability of electricity to rural and poor India amounts to benefit poor at the expense of loyal customers and is detrimental to the very idea of creating competition as envisaged by the Electricity Act. Further, the wave of free power as introduced by many states has already exposed the darker side of providing this free lunch. States accordingly need to steer clear of such policies which prevent cost recovery. On the other hand, the idea of extending output based subsidies and support to alternate and renewable energy sources as proposed by BJP seems more coherent. The BJP strikes the right chord by laying emphasis on innovation and technological advancements,

incentivizing the individuals, households, farmers, firms, institutions and developers for energy efficiency designs and eco-friendly initiatives. There is an urgent need for power sector reforms and energy security. It is therefore, upto the citizens of India to decide which political party has the balance and solid foundation to leap frog the ever increasing supply demand deficits and energy security in the country.