Wednesday, January 1, 2014

CHEAP POPULARITY

As promised Arwind Kejriwal announces rate cut in power tariffs – I was reading the news paper. I remembered my days in Indian Military Academy or IMA as it is called. Few days prior to passing out parade, when we were in Indian Military Academy undergoing Army Officer’s gruelling course, we were briefed by our Commandant on the conduct of young officers in and Army unit. “In the unit you have to be careful. Your activities should be such that you should become a role model for others and should be liked by your Jawans. Remember in the unit, you would be looking by your two eyes but sixteen hundred eyes (a unit has around 800 jawans!) would be constantly looking at you”. He cautioned us and exhorted us to not to succumb to cheap popularity. “Cheap popularity will not carry you for long. People see through you. Try to be fair to others and act without prejudices. In the long run, people will regard you for your balanced and fair approach rather than freebies you dole out in order to garner popularity”.



AAP had contested the election on the plank that they would weed out corruption in the three power distribution companies and bring the tariffs down by 50 %. Manage the economy well and with these policies in place, automatically the power tariffs would come down. The benefit accrued from fine management and corruption less distribution would then be passed on to “aam aadmi” in bringing down the power tariffs.



In order to hurry in completing the poll promise what we get is a subsidy. In the second week of AAP governance what we get is 50 % lower tariffs by absorbing the costs by Govt. This amounts to a subsidy of 200 Cr with a rider that out of it 140 Crs would be taken back from power companies and 60 Cr from the Government. Today we don’t even know that these power companies would be ready to give back 140 Cr rupees and we might end up in getting all 200 Cr from Government coffers. Governments succumb to cheap popularity and subsidy is the easiest vehicle to ride on. The power companies may go bankcrupt in giving back 140 Cr to the government, thus affecting the power distribution. This kind of government bail out is the easiest way as the repercussions would be felt after few years and probably by the next Government. If subsidy was the solution then why only 50 %. Tomorrow in the next election a party may come up with a promise of bringing down power tariffs by 70 % or another party would go ahead and promise 100 % free power.



What we require is fair distribution of power without leakages and availablility of 24 X7 stabilised electricity and not cheap popularity resulting from reduction of tariffs by subsidizing from the govt coffers. The worst fears have come through.



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