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.

At an event organised by the Hansard Society, a UK based political research and education charity, MPs spoke about what their role entails and the challenges the face in fulfilling their role.  It is striking to note the similarity between what our Parliamentarians have to share about the challenges they face in their roles as representative of the people and what the UK MPs have shared.

  • Management of their diary i.e. Time Management and prioritizing issues are important to the MP being able to do justice to his various roles
  • The MPs stated that the constituency expects action from them on issues which fall within the purview of the local Government and should have been taken up with the councillor. These could be issues related to public works, schools and the like.
  • Quite often the local councillor is unknown to the population and since the MP is easily recognizable, local issues are taken up with him. The MP is obliged to take up the issue because he cannot be seen to turn anyone away.
  • People assume that if you are not seen on the streets you aren't doing your job. Therefore constituency visits are deemed important and end up taking quite a bit of time, which could have been otherwise devoted to legislative work.
  • MPs with a thin majority tend to focus more on local issues for fear of not being able to retain their seat. They tend to try that much harder to address local issues, even with the knowledge that it is not their primary responsibility.
  • Some MPs felt that the committee work should be of foremost priority instead of just an additional responsibility for the MP, as it is at the committee level that all aspects of the legislation can be examined and worked on in detail.
  • MPs should be encouraged to specialize in subjects so that they develop their knowledge in there area of interest.

In general, there are three views the MP has to balance: The Party's, The Constituency's and his or her Personal views. For example the debate on Wind Farms for renewable energy which spoil the landscape, or immigration. These are subjects where the three views may be vary greatly from each other and the MP has to balance each of these. Ultimately, loyalty to party is a must, since the MP won on the party’s ticket, so the MP owes his/her allegiance to the Party and should endorse the Party’s views.