reforms at the instance of foreign powers and the Asia Development Bank
The Madhya Pradesh Regulatory Commission created a dark history on the 30th of
November 2002, when it gave an unprecedented order for 800% increase in the
tariffs of the agriculture sector and 30% for the domestic consumers. The
tariff increase allowed by the Commission are in excess even of the tariff
increases asked for by the Madhya Pradesh State Electricity Board.
Simultaneously, because the Regulatory Commission has permitted the Variable
cost formula, tariffs may be hiked to any extent after only six months from
now. This tariff hike being brought in at the instance of the Asian
Development Bank, the British and the Canadian government and their
development agencies will serve their cause of wreaking huge destruction of
the Madhya Pradesh economy and pauperizing large sections of the farmers and
the common people of Madhya Pradesh. While on one hand there will be darkness
in the homes common people , on the other hand thousands of farmers facing the
800% tariff hike will be compelled to commit suicide in the manner of late
Chindwaada farmer Kishan Okte.
The Jan Sangharsh Morcha condemns this deliberate attempt by the Digvijay
Singh government to destroy our own state and people, because of agreements
executed with foreign financial institutions and demands that the Madhya
Pradesh government must immediately file a review petition to withdraw the
tariff hike, as well as decrease last year's tariff increase, or declare a
subsidy that will nullify the impact of this tariff increase. It announces
that the Jan Sangharsh Morcha and other people's organizations and trade
unions will launch a struggle all over the state against this hike and the
anti-people power sector reforms. The Jan Sangharsh Morcha also calls on the
people of this state to comprehend how a clutch of multinationals have sought
to impose the Reforms Act 2001 and the Regulatory Commission on the people to
fulfill their own profit-seeking agenda, and to struggle for the repeal of
this anti-people Act and the dismantling of the Regulatory Commission.
MPSERC new tariff order for hike unprecedented :
An analysis of the new tariff order declared on the 30th of November 2002 by
the MPSERC demonstrates that while the metered consumption charges in
agriculture has been increased to 200%, or twice the original tariffs, as far
as the consumers paying on flat rate basis in agriculture is concerned, who
constitute 86% of all farmers in the state, the tariff increase given by the
MPSERC is 800 %. The increase in the flat rates is 233 %, but simultaneously,
the tariff order decreases the time period for which this payment will apply
to 6 hours a day. For use for more than 6 hours going upto 12 hours , the
tariff will be 1.5 times the rate for 6 hours. Thus compared to the present
rates, the increase will be of the order of 400%. Since the present rates are
for 24 hours supply, (even if that has not happened in the last one year) for
24 hours supply, the tariff increase will become 800%.
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This becomes clear from the following table :
Flat rate For 2001-2002 (applicable for 24 hours)
Current tariff ordered by the MPSERC (For 6 hours)
% Increase in tariff (Increase ordered by the MPSERC for 6 hours )
Increase in tariffs for 12 hours ordered by the MPSERC
% Increase in tariffs for 12 hours
% Increase in tariffs for 24 hours
Flat rate paying farmer (86% of all farmers )
Upto 3 HP
Rs. 57 per HP per month
Rs. 190 per HP per month
233 %
Rs. 285 per HP per month
400 %
800 %
3-5 HP
Rs. 67 per HP per month
Rs. 224 per HP per month
233 %
Rs. 285 per HP per month
400 % 800 %
5-10 HP
Rs. 69 per HP per month
Rs. 230 per HP per month
233 %
Rs. 336 per HP per month
400 %
800 %
10-20 HP
Rs. 80 per HP per month
Rs. 268 per HP per month
233 %
Rs. 345 per HP per month
400 %
800 %
Metered consumer(14% of total farmers)
Rs. 1.20 per unit Rs. 2.40 per unit 200% of earlier tariff
MPSERC direction for state government subsidy not legally binding, can be
reversed at any time :
As per the Urja Sudhar Adhiniyam 2001, the MPSERC has no legal powers to
direct the Madhya Pradesh government to provide subsidies for any class of
consumers. In fact last year's Tariff order gave no directions about state
subsidies. It is up to the state government to take decisions about what
subsidies it desires to give. Thus the suggestion of the MPSERC to the state
government to provide subsidy upto 50% for the agricultural sector has no
legal basis. Even if the state government agrees to give this subsidy and
reverses it after three months, it can easily do so.
However even if the state government does provide subsidy to the agricultural
sector upto 50% of the increase in tariffs, the increase in tariffs that the
farmers will have to face will be 300 %, - an inhuman and unacceptable
increase. The following table clarifies the situation.
Last year 2001-2002 tariffs - for 24 hours consumption Current tariff for
2002-2003 for 6 hours consumption after subsidies % Increasefor 6 hours
consumption after subsidy Current tariff after for 12 hours as per MPSERC for
12 hours -After subsidy % Increase for 12 hours consumption after subsidy %
Increase for 24 hours consumption after subsidy Flat rate agricultural
consumersUpto 3 HP 3-5 HP 5-10 HP 10-20 HP Rs. 57 per HP per month Rs. 67 per
HP per month Rs. 69 per HP per month Rs. 80 per HP per month Rs. 95 per HP per
month Rs. 112 per HP per month Rs. 115 per HP per month Rs. 134 per HP per
month 67 %67 %67 %67 % Rs.142.5 /HP/monthRs. 168/HP /month Rs. 172.5 /HP/month
Rs. 201/HP/month 150 %150 %150 %150 % 300 %300 %300 %300 %
Tariff hike for domestic consumers both unbearable and unnecessary :
The MPSERC has ordered a 30% increase in the tariffs to be paid by the
domestic consumers. MPSEB's second tariff petition clearly states that the
domestic consumer is already paying 41% of the cost of supply of electricity.
If the MPSEB had decreased the T&D losses from 51 % to 42 % as ordered by
the
MPSEFC in its First tariff order, and if the Plant Load Factor had been
brought up to 71 % as directed by the MPSERC , even at the present tariffs the
domestic consumer would be paying 64 % of the cost of supply. As per the Urja
Sudhar Adhiniyam 2001, the domestic consumer is to pay up to 75 % of the cost
of supply by 2006. This is only the second year of the power sector reforms,
therefore there was absolutely no need to increase the tariffs of the domestic
consumers this year. The impact is clear. Several lakh consumers left the grid
last year. With these tariffs, a further several lakh consumers will have to
leave the grid altogether because they will not be able to pay the bills.
Power in Madhya Pradesh among the highest in the country :
The tariffs declared by the MPSERC has now made the electricity tariffs in
Madhya Pradesh among the highest in the country. It may be noted that while
the per capita income in Madhya Pradesh is among the lowest in the country,
the electricity tariffs in the state both for the domestic and agricultural
sectors are the highest in the country. Inn fact, even as per the Urja Sudhar
Adhiniyam 2001, the electricity tariffs were to be linked to the paying
capacity of the consumers. However the MPSEB or the MPSERC have done NO paying
capacity studies AT ALL and the MPSERC has simply increased the tariffs by a
huge manner in an ad hoc and destructive manner, on the instructions of the
Asian Development Bank.
--------------------------------------------------
Agricultural sector State Tariffs (Paisa per unit)
--------------------------------------------------
Flat rates
Madhya Pradesh 187.00
Gujarat 171.36
Maharashtra 146.88
Haryana 127.29
Rajasthan 105.88
Karnataka 91.80
Metered connection
Madhya Pradesh 240
West Bengal 173
Assam 150
Karnataka 135
------------------------------------------------
Domestic tariffs State Tariff (Paisa per unit )
------------------------------------------------
Madhya Pradesh 280.52
Maharashtra 69.22
Uttar Pradesh 52.32
Andhra Pradesh 33.82
Assam 28.0
West Bengal 207.0
-----------------
Per capita Income
-----------------
State Per Capita Income (Rs/annum)
Source: Report of the NHRC and Planning Commission, GOI of 2002
Maharashtra 24,200
Punjab 23,000
Haryana 21,500
Gujarat 20,400
Tamil Nadu 19,600
Karnataka 17,100
Kerala 15,900
West Bengal 14,800
Andhra Pradesh 14,600
Rajasthan 13,000
Uttar Pradesh 10,000
Assam 9,400
Madhya Pradesh 8,500
Permission to Variable Cost adjustment formula will allow further tariff
increase after six months
The MPSERC has a very dangerous decision also agreed to permit Variable cost
adjustment after six months. They have state that the MPSEB be allowed to
adjust and put onto the consumers water taxes, auxiliary electricity
consumption, fuel costs and all other such costs that cannot be estimated a
priori. This will open the doors for further and unrestrained increase in
electricity tariffs within six months from now.
MPSERC Non-compliance of MPSEB, promotes inefficiency and punishes consumers
It may be noted that the MPSEB did not comply with the directions of the
MPSERC given in its First Tariff Petition regarding production efficiency
norms, decrease in Transmission and Distribution losses and increased
collection of outstandings causing a loss of Rs. 2500 crores of revenue.
Had they followed the directions, this tariff increase would not have been
required at all. But the MPSERC instead of punishing and pulling up the MPSEB
and insisting on compliance, chose to put the full burden on the consumers. It
is a matter of amazement that the T&D losses that had to be reduced to 37%
as
per the first Tariff order have now been allowed to go upto 43.77 %, promoting
inefficiency on part of the MPSEB .
Current tariff hike at the behest of the Asian Development Bank : Designed to
kill
It is clear that the MPSEB did not comply with the orders of the MPSERC about
performance and collection parameters last year and that this flagrant
non-compliance was adequate and sufficient basis for the MPSERC to reject the
MPSEB's tariff petition. Yet, the MPSERC did not choose to do so and made the
recent anti-people destructive order as per the conditions of the agreement of
the Government of Madhya Pradesh with the Asian Development Bank. The
agreement makes it eminently clear that the tariff have to be hiked before
every instalment of the loan is disbursed. The hold of the ADB over decisions
can be seen from the fact that the ADB team that is assessing the progress of
the reforms is present in Madhya Pradesh on the very day that the Tariff order
was declared. It is also well known that Shri P.K.Mehrotra, the present
Chairman of the MPSERC was the Chief Secretary in November 2001, and it was
under his signature that the loan agreement with the ADB was finalized. Thus,
the people of Madhya Pradesh have to now look to the very person who undertook
on the behalf of the state to implement the tariff increases as per ADB
requirements and to insulate these decisions from the general public, to deal
out justice to them. Itt also makes it very clear indeed why justice is not
and cannot be forthcoming.
Current tariff increase will destroy the state, at the signal of the Asian
Development Bank
There is not even a shred of doubt that this tariff hike ordered by the MPSERC
will destroy the economy and in fact is designed to do so. In the absence of
any paying capacity studies by the MPSEB and the MPSERC that could form the
basis of any rational tariff decision as well as the clear written and oral
objections of the numerous people who appeared before the MPSERC against any
further hike, for the MPSERC to give such an order is to deliberately bring
destruction to this state at the behest of the Asian Development Bank.
It may be noted that after last year's tariff hike, lakhs of consumers, a
large percentage of those Adivasis had to have their electricity connections
severed since they were unable to pay their bills. It is clear that this
tariff increase in the fourth year of drought is a blatant attack on the very
survival of the tribal areas.
This tariff hike will compel thousands of adivasis and farmers to commit
suicide as is already happening in Karnataka, Punjab, Andhra Pradesh and
Kerala. On the other hand, lakhs of adivasis whose livelihoods will be
ruptured because of lack of electricity will have to succumb to starvation
deaths. Millions of others will face darkness in their homes.
Tariff hike and power sector reforms must be withdrawn: Entire state to be
mobilized for a long struggle ahead :
The common forum of the people's organizations of Madhya Pradesh - the Jan
Sangharsh Morcha condemns this murderous assault on the people of Madhya
Pradesh in the name of power sector reforms, to be wrought through the present
electricity tariff hike, at the instance of foreign governments and
multinational corporations. The Jan Sangharsh Morcha demands that the Madhya
Pradesh government must immediately file a review petition to withdraw the
tariff hike, as well as decrease last year's tariff increase, or declare a
subsidy that will nullify the impact of this tariff increase. It announces
that the Jan Sangharsh Morcha and other people's organizations and trade
unions will launch a struggle all over the state against this hike and the
anti-people power sector reforms. The Jan Sangharsh Morcha also calls on the
people of this state to comprehend how a clutch of multinationals have sought
to impose the Reforms Act 2001 and the Regulatory Commission on the people to
fulfill their own profit-seeking agenda, and to struggle for the repeal of
this anti-people Act and the dismantling of the Regulatory Commission.
The new phase of the struggle will begin with a huge rally in Mandleshwar on
the 12th of December 2002.
Alok Agarwal - Convenor, Jan Sangharsh Morcha
Chittaroopa Palit - Narmada Bachao Andolan
Shailendra Chauhan, Manshram Verma - Nimad Malwa Kisan Mazdoor Sangathan
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