One of our earlier posts (read here) tackled the question of whether the Public Accounts Committee could summon ministers or not. According to a direction of the speaker, a Minister cannot be summoned by a financial committee. There are no specific procedures for the Joint Parliamentary Committees mentioned in the rules. However, according to the Directions by the Speaker general rules applicable to Committees shall apply to all Committees, though specific directions can be given for some committees (read here). In other words, the general directions for all committees would be the same, unless a specific direction was given relating to a particular committee. In the Joint Committee of Stock Market Scam and Matters relating there to, a specific request was made to the Speaker, Lok Sabha by the Chairman, JPC on 20th May, 2002 for permitting the Committee to call for written information on certain points from the Minister of Finance and Minister of External Affairs. The Speaker accorded the necessary permission on 1st June, 2002. Consequently, the Minister of Finance (Shri Jaswant Singh), the Minister of External Affairs (Shri Yashwant Sinha) and the former Finance and External Affairs ministers (Shri P. Chidambaram and Dr. Manmohan Singh respectively) testified before the Committee. Read the text of the report here.
Reports suggest that a debt restructuring plan is being prepared for power distribution companies (discoms) in seven states - Uttar Pradesh, Punjab, Rajasthan, Haryana, Andhra Pradesh, Tamil Nadu and Madhya Pradesh. According to some estimates, the combined outstanding debt for discoms is Rs 2 lakh crore. Discoms have been facing heavy losses. According to a Planning Commission Report, the cost of supplying electricity increased at a rate of 7.4 per cent annually between 1998-99 and 2009-10. The average tariff has also increased at an annual rate of 7.1 per cent over the same period. However, the report shows that the average tariff per unit of electricity has consistently been much lower than average cost of supply per unit. Between 2007-08 and 2011-12, the gap between average cost and average tariff per unit of electricity was between 20 and 30 per cent of costs.
Average cost and average tariff per unit of electricity (Rs per kWh)
|
Year |
Unit cost |
Average tariff per unit |
Gap between cost and tariff |
Gap as percentage of unit cost |
| 2007-08 |
4.04 |
3.06 |
0.98 |
24% |
| 2008-09 |
4.6 |
3.26 |
1.34 |
29% |
| 2009-10 |
4.76 |
3.33 |
1.43 |
30% |
| 2010-11 |
4.84 |
3.57 |
1.27 |
26% |
| 2011-12 |
4.87 |
3.8 |
1.07 |
22% |
Source: “Annual Report 2011-12 on the Working of State Power Utilities and Electricity Departments”, Planning Commission State discoms have been losing money due to higher costs than revenues, as well as high transmission and distribution (T&D) losses. The commercial losses for discoms in India (after including subsidies) increased from Rs 16,666 crore in 2007-08 to Rs 37,836 crore in 2011-12. Reports suggest that the restructuring plan being prepared will be worth Rs 1.2 lakh crore in short-term liabilities. Half of the proposed amount would be issued as bonds by the discoms, backed by a state government guarantee. Banks and financial institutions would reschedule the remaining Rs 60,000 crore of debt, with a moratorium of three years on payment of the principal amount. State governments that adopt the financial restructuring plan would not recover any loans given to discoms before they start showing profits. Under a proposed transition finance mechanism, the central government would reimburse 25 per cent of the principal amount of bonds to states that fully implement the plan. Also, states that achieve a reduction in T&D losses above a targeted level in three years may be given grants. Newspaper reports also suggest that states will have to prepare plans for eliminating the gap between the average cost and average tariff per unit of electricity.
