Energy deficiency had been one of the primary reasons for
India’s fiscal and trade deficits. Failure in implementing an integrated energy
policy has been a major failure of policy making.
It is widely recognized that “roof top solar panel” has the
potential greater than the one seen in mobile telephoney in past one decade.
Reducing energy intensity of water and developing a world class public
transport infrastructure on priority basis, especially in tier II and III
cities, and strict legal enforcement of energy efficiency should be considered.
The draft
report of the Expert Committee on Integrated Energy Policy set up by
the Planning Commission submitted in December 2005 explicitly stated that
“India faces formidable challenges in meeting its energy needs and providing
adequate energy of desired quality in various forms to users in a sustainable
manner and at reasonable costs. India needs to sustain a 8% to 10% economic
growth to eradicate poverty and meet its economic & human development goals.
Such economic growth would call for increased demand for energy and ensuring
access to clean, convenient and reliable energy for all to address human
development. To deliver a sustained growth of 8% through 2031, India would, in
the very least, need to grow its primary energy supply by 3 to 4 times and
electricity supply by 5 to 7 times of today’s consumption. By 2031-32 power
generation capacity would have to increase to 778095 MW and annual coal
requirement would be 2040MT, if we don’t take any measures to reduce
requirement. Along with quantity the quality of energy supply has to also
improve. The energy challenge is of fundamental importance to India’s
economic growth imperatives (empasis supplied).
The Expert Committee made suggestions based on the following
approach:
(a)
Markets that promote competition.
(b)
Pricing and resource allocation to take place
under market forces under an effective and credible regulatory oversight, as
far as possible.
(c)
Subsidies to be transparent and targeted.
(d)
Improved efficiencies across the energy chain.
(e)
Policies that reflect externalities of energy
consumption.
(f)
Policies that rely on incentives and which are
implementable
Despite having such a vivid idea about the problems and well
documented approach to the solution, the government not only took a divergent
route but also did all possible things to scuttle the growth of energy sector.
The NDA government had for once effectively dismantled the
administrative pricing mechanism for transportation fuel; de-regulated the oil
and gas exploration and production under New Exploration Licensing Policy
(NELP); allowed private players in retailing of transportation fuel; privatized
power production and related coal mining.
The successive governments however undid most of these steps in
the interest of short term political gains. It dithered for many years on
revision of market price of transportation fuel and LPG. Failed to implement
the coal mining policy; national solar mission remained mostly on papers;
nuclear energy program has seen very little progress despite all the political
hoopla in 2009; subsidies have been misdirected and mostly remained
uncontrolled till recently.
In past few months, the government again appears to have changed
the course of the policy under severe pressure from global lenders, rating
agencies and investors. But the diversion seems to leading nowhere as it is
again an ad hoc step without proper framework and guidance.
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