THE GIST of Editorial for UPSC Exams : 30 April 2020 (India’s lightbulb moment (Financial Express))

India’s lightbulb moment (Financial Express)

Mains Paper 3:Economy
Prelims level: Electricity Amendment Bill 2020
Mains level: Issues pertaining with electricity sector in India

Context:

The 9-minute lights-off on April 5 was the appeal of the PM’s call, the extent of public participation, and the expert management of the national electricity grid.
Switching off, and then bringing back in just a few minutes, a massive 32,000 MW of power, is a great technical accomplishment.

Key issues for sustainable future:

Continues to integrate renewable energy (RE): In keeping with energy security and climate change goals, a market-based, automatic mechanism for integration of infirm renewable power into the grid is non-negotiable.
Doing with inefficient coal plants: The plan to retrofit 440 power units aggregating to 166.5GW with flue gas desulphurisation (FGD) systems by December 2022 is way behind schedule.
Trend of low power demand: In the post-Covid economy, and increased RE generation, will continue to put a ceiling on the PLF of the thermal fleet.

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Plan for sustainable future:

Chance for ‘Make in India: It is an opportunity to bring in fresh Covid-influenced industrial investment from Korea and Japan, which are diversifying away from China.
Lower industrial power tariffsto meet the competition: Lowering industrial tariffs obliges the unravelling of the cross-subsidy regime. The key issue is of agricultural tariffs, and a permanent solution is needed.
There is a precedent for from the successful marketisation of fuel oils.
Making these long-delayed changes would also address the perennial and oldest issue of the financial health of the discoms.

Electricity Amendment Bill 2020:

The proposed Electricity Amendment Bill, 2020, is an ambitious step in the right direction—with bold moves to institute cost-reflective tariffs, remove subsidies, and strengthen the sanctity of contracts through greater enforcement and provision of payment security to generators.
Each state can be asked to endorse the legislation with its variant, which could become a condition to accept the Centre’s band-aid assistance.

Shortcomings:

However, the proposed Bill could have gone further to introduce the radical reforms needed.
In the current draft, many of the reforms proposed earlier—carriage and content separation, more effective RPOs, and default open access to RE—have either been dropped or watered down.
A bold reform move would be the complete abolition of cross-subsidy at a defined future date.
The discoms should also be required to implement “DBT” for paying any subsidy on electricity (rather than this being borne by the discom, as is the case presently).
Removing the cross-subsidy will create the urgency to solve the subsidy problem, and concurrently make power tariffs more competitive—something we need to attract factories relocating from China.

Conclusion:

It is said that India reforms only when there is a crisis.
We have a monster of a crisis now, and to not use this crisis for meaningful reform would be a waste of talent, leadership, and this rare lightbulb moment at every level.

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Prelims Questions:

Q.1) With reference to the Minor forest produce, consider the following statements:
1. It include non-timber items such as bamboo, roots, seeds, fruits, flowers and plants.
2. Recently the Ministry of Home Affairs (MHA) has added the collection, harvest and process of minor forest produce to the list of activities that will be permitted.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2