India is now officially 99% electrified, but electricity remains high on the political agenda

By Dr Jonathan Balls
Post-Doctoral Fellow at the University of Melbourne's School of Geography

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election; policy; infrastructure; energy Election; Policy; Infrastructure/Transport; Energy

For Indian politicians looking to woo voters, promises to provide ‘bijli, sarak, pani’ (power, roads, water) have long been important.

As television and telecommunications have spread, electric power has become even more significant in people’s lives and consequently the inability of millions to access adequate electricity has become ever more politically charged.

Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP) government will go into the election hoping that its electrification achievements will be rewarded by voters.

In the run-up to the 2014 election, the party made the delivery of power to India’s 20,000 unelectrified villages a central promise. When this goal was close to being achieved in 2017, the BJP went further and announced it would deliver universal household electrification by 2019. Estimates showed that this would require electricity lines being extended to a staggering 40 million households.

Has the BJP delivered?

The BJP’s achievements on electrification over five years are impressive when considered in absolute numbers: 25,000 villages and more then 20 million households. The government’s electrification tracking website shows that over 99% of households in India have now been electrified. Indeed, in all but two of India’s 29 states 100% household electrification is being reported.

However, India’s opposition parties can be expected to counter attempts by the BJP to claim credit for India’s electrification. In power through much of the last 70 years, the main opposition Congress party has already pointed out that it put in most work on village electrification. Between 2004 and 2014, the Congress-led government oversaw the connection of 107,600 villages. Indeed, when the BJP came to power in 2014, well over 90% of India’s villages were already electrified.

Additionally, while millions of households have been electrified over the last four years, critics have accused the government of arbitrarily shifting the goal post of universal electrification for political ends.

A recent re-calculation of the number of unelectrified households allowed official data to show 99% electrification. India’s Ministry of Power has responded that 20 million households previously thought to have needed electricity connections either did not exist, had already taken connections, or were unwilling to be connected.

As stories of households awaiting electricity undoubtedly emerge, there will be plenty of opportunity for opposition politicians to argue that the task of electrification continues. The BJP, perhaps anticipating this, has announced funding for officials to travel the country to search for households missed by previous efforts.

Reliability and Affordability

Although most households are now connected to India’s grid, tens of millions of dwellings still do not receive a reliable supply of electricity. A 2018 survey showed only half of rural households in the populous states of Uttar Pradesh, Bihar, Madhya Pradesh, Jharkhand, Odisha, and West Bengal receive more than 12 hours of power per day.

Affordability is also a major challenge. Millions of low-income Indians have little disposable income to pay for electricity, even at the low prices that are currently charged to poor households.

The focus of promises by India’s main political parties can now be expected to turn to these two issues – areas that could prove fruitful to mobilising voters, but also ones where delivering will be difficult.

Tackling reliability will require any incoming government to reform India’s electricity distribution sector. Electricity supply is largely carried out by publicly-owned distribution companies. These firms have been losing money for decades – most do not generate enough cash to purchase sufficient electricity to supply reliable power. Indeed, distribution companies limit the supply of electricity to loss-making areas to minimise their financial losses. Political interference by state-level governments, low electricity prices, dysfunctional revenue and billing systems, and theft are just some of the problems responsible for this.

The BJP-led government has made efforts to reform the distribution sector. It launched a nationwide programme that saw the debts of distribution companies transferred to state-level governments and central government funds invested in distribution companies. Billions of dollars were spent on the mass installation of smart meters and systems to better monitor where electricity is being lost. However, losses at distribution companies remain high.

Moves by future national governments to further reform distribution will inevitably face political opposition from state governments. For decades, state governments have used their influence to keep prices below the cost of supplying electricity to farmers and rural consumers – a policy driven by fear of electoral consequences should prices rise. Theft has also been informally sanctioned and protected by local politicians for similar reasons.

Introducing any centrally funded programmes to supply cheap or free electricity to low-income consumers would be electorally popular, but cost billions of dollars – a price tag that India’s finances would struggle to absorb.

The coming months will certainly see India’s parties make new promises on electricity as they look to court voters.

India’s politicians have long toyed with plans to privatise distribution companies as one solution. Proponents argue private distributors would be better able to supply reliable electricity, free from political interference. Introducing competition at a retail level has also been considered. Yet privatisation and competition have always been judged to be too politically risky. The BJP more recently floated the idea of establishing a national public distribution company, to deliver reliable electricity where state level firms are not. Such a proposal, while complicated to deliver, would likely be popular among voters.

Dr Balls is a Post-Doctoral Research Fellow at the University of Melbourne’s School of Geography and a member of the Australia India Institute’s New Generation Network.

Banner image: Courtesy of Shrinivaskulkarni1388 via Wikimedia Commons.

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election; policy; infrastructure; energy Election; Policy; Infrastructure/Transport; Energy

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