Stepping Out of the Frame

Context: In the light of debilitating condition of Distribution Companies (DISCOMs) in India, there is a need to bring about structural reforms based on a more collaborative and networked model of governance. 

Issues confronting the DISCOMs in India:

• Longstanding financial problems: The UDAY Scheme to pare down their debts and rationalise electricity pricing has failed to materialise.

• Dues owed to the power generators: PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators) portal indicates dues owed by DISCOMs to the power generators to the tune of Rs 1.25 lakh crore.
• Inadequate liquidity infusion: The total owed dues according to the Power Finance Corporation for March 2019 is of Rs 2.27 lakh crore, while the government stimulus is close to Rs 1.25 lakh crore.
• Dues owed by the consumers: DISCOMs are owed approximately Rs 1.8 lakh crore by consumers alone, of which a third is due from state governments themselves. 

• Political and Regulatory Issues: Although Aggregate Technical and Commercial (ATC) leaks make the DISCOMs inefficient, they are at a greater loss due to political and regulatory issues:

• Political issues related to non-clearance of the debt owed by the government.
• Regulatory issues related to failure in fixing the costs of tariffs leading to “Opportunity Losses” 
• The sharp decline in the demand for electricity by the industrial and commercial entities who pay “full price” to the DISCOMs and whose revenue cross-subsidises agricultural and rural households.
• Threat due to Renewable Energy: Loss in the revenue due to the growing shift of industries towards harnessing renewable energy to meet their requirements.

Way Forward:

• Structural Reforms supported by ‘Geo-Civics’: Since the problems of the world are planetary (racism, refugees, inequality, fundamentalism), it require globally networked solutions.
• Utilize the Youthful Bulge: in order to bring structural transformation.
• Generation Z and the millennials have different priorities from their parents and are increasingly impatient to see progress on the planetary issues.
• This youthful bulge should be less accepting of entrenched vested interests, status quoism and incremental change. 
• Such pressure from the youth will move us towards a more collaborative and networked model of governance built on the platform of “Civitas” (the social body of the “Cives” or citizens).