The Hindu Business Line : Plan panel likely to evolve norms on free power

EXPRESSING concern over the negative impact of steps such as `free power' or `very cheap power' on the overall system, the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, stressed on the need to put such policies on the correction path at the earliest.

The absence of such corrective measures would seriously impede the Government's growth targets, as stipulated in the common minimum programme.

At the international conference at the Administrative Staff College of India here on Tuesday, he said there have been evidences of serious depletion of groundwater owing to the availability of free power or very cheap power. "It is important to avoid focus on such extreme situations. If it is not put on the path of correction over the next number of years, it would lead to serious impediment to the growth being targeted," he said.

Talking to newspersons on the sidelines of the conference, Dr Ahluwalia said the Planning Commission's energy policy group, headed by Mr Kirit Parekh, which would submit its report in January, was likely to have guidelines for states on free or cheap power.

Acknowledging that electricity is a State matter and that there cannot be a national policy on it, he said the Planning Commission would only lay down the general principles, which reflect its viewpoint. Admitting that there was a case for subsidy, he said generalised cheap power might lead to problems. Only one or two states had gone in for free power, while every state was talking of cheap power. The problem of cheap power was more widespread than thought of, he said.

Dr Ahluwalia stressed on the need for a comprehensive look at the agriculture policy instead of one or two issues. "The Minimum Support Price has to be an essential part of any agricultural policy. The real issue is at what level the MSP should be fixed and how to spread the benefits of having MSP beyond one or two states, which is happening at present," he said.

Viewing that the volume of resources going into subsidies was large and that the existing system did not help small farmers, he said it would be better for farmers if resources went into investments. "The volume of resources that currently go into subsidies directed at agriculture is very large. But if the same resources went into investment in agriculture, including irrigation and rural roads, it would be much better for farmers generally and small farmers in particular," he said.