10 Mar 2014

The Most "Power"-full States

Electricity, perhaps, is the one of the most important commodities, yet significantly under-valued. Don't get me wrong - everyone hates power cuts; but its true value is not fully appreciated. Electricity just doesn't run television at home, it also provides a few hours of daily family entertainment to lower-middle / poor class, for whom otherwise no real, affordable alternatives exist. Industries are large beneficiaries as well - higher uptime results in efficient utilization of resources (including labour), higher output and value creation, and economic well-being for human factors. 

After a much publicized visit of Arvind Kejriwal to Gujarat, there are debates on SM whether Gujarat is really as advanced on electricity front as is often claimed by its long-serving CM Mr. Narendra Modi. Dubious claims are made by both sides on this issue. I believe this can be satisfactorily analysed and concluded based on reliable data available in public domain.

(I recommend reading this introductory piece before moving forward)

Census, a periodic primary research done in our country, provides insights at a very granular level for several socio-economic indicators. It's remarkable since it doesn't involve samples - entire population of the country is covered. While it is conducted only once every 10 years, fortunately in this case this fits well on the timeline: Census 2001 was done somewhere over March-September 2001, coinciding well with Mr Modi starting his tenure as CM of Gujarat in Oct 2001. Comparing Census 2001 to Census 2011 should give us a very good insight into what Mr Modi's government was able to achieve in these 10 years in Gujarat both on absolute and relative basis. Point to note: Mr. Modi has been CM for more than two years even after Census 2011, hence any inferences drawn from comparison of Census 2001 to Census 2011 should also be augmented by analysis of data beyond 2011 till today, to the extent available.

So let's come to the analysis: Census collects data on "Primary Source of Lighting" at a household level: whether it is electricity, kerosene or something else (solar / other oil etc). This, in my experience, is the closest proxy of how many households are truly electrified. I reject data on how many villages electrified (definition of "village electrified" is unclear, prone to inconsistency across villages / states, a village can be partially electrified etc, more on this later). I also reject data such as number of new electricity connections sanctioned (its merit depends on size of the state, starting position etc). Slight nuance: While a  household might technically be electrified but due to very extreme power outages (such that electricity is practically just not available), the household might not be counted under electricity as primary source of lighting. It's acceptable - just having a wire connection with little to no power should not count.

The graphs below compare states on their relative performance on being able to migrate their population from kerosene to electricity (by electrification of their houses) between 2001 to 2011. For eg. India as a country moved from 56% electrified households (in 2001) to 67% households (in 2011), as illustrated by the first horizontal bar. For ease and relevance, only top 12 states by population are considered (cover 83.4% households of India in 2011): Gujarat being a mid size state would make for an unfair comparison with much smaller / less populous states/UTs.

%Households by Primary Source of Lighting (India & Top 12 states, 2001-11)


Note: Others includes solar, other oil and no lighting
Source: Census 2001 and 2011 data, sourced from Census website

My inferences are as below:
  • Gujarat was able to improve from a strong starting position of 80% household electrification in 2001 to 90% household electrification in 2011, a commendable performance.
  • However, Gujarat is not the best performer: All four southern states start from a weaker position in 2001 relative to Gujarat (esp. Kerala and Andhra Pradesh) and all these states close 2011 at 90%+, a good 1-4% above Gujarat.
  • Since above analysis stops at 2011, Gujarat might have improved beyond 90% in 2012/2013, but so could have other states as well. We don't know further through census data alone.
  • Unrelated to Gujarat, but West Bengal deserves special mention for improving access to electricity from 37% to 55% households. Mr. Buddhadeb Bhattacharjee was CM for almost the entire period of 2001-11 - he, despite being from a left party, is widely regarded as a reformist responsible for significant economic liberalization of West Bengal (and often criticised by his party for such reform policies).
  • Odisha also delivered significant improvement from 27% household electrification in 2001 to 43% in 2011, same should be attributed to Mr Naveen Patnaik who has been running the ship over there since 2000. However, a lot still needs to be done in both WB and Odisha, both had a very weak starting position (2001).
  • UP and Bihar languish at the bottom of the table, marred by bad governance under multiple political parties as far as the power situation is considered. Have a re-look at Bihar: only 16% households in the state use electricity as prime source of lighting. It is extraordinarily low. This is when on paper, 90%+ villages are "electrified" in Bihar as of 2013 (as suggested by multiple google searches, however could not locate authentic link). This discussion paper provides some perspective around definitions and challenges in Bihar pertaining to rural electrification (pages 12-15). There are serious questions that need to be answered by both Mr. Nitish Kumar and Mr. Lalu Prasad Yadav who have been in power during 2000-2011 for considerable time periods.
However, above analysis is not not sufficient to conclude that Gujarat is among top states when it comes to improving access to electricity during the time period 2001-11. Ask any woman managing daily household chores, or a businessman running a small manufacturing unit - consistent, predictable 24*7 availability of power is extremely important. So let's see where does Gujarat stand when it comes to meeting electricity demand by providing adequate electricity. Data for the table below is sourced from Annual Report of Central Electricity Authority, Ministry of Power, Government of India (2012-13). This table provides info on electricity demand and supply (and hence surplus/deficit) overall as well as during peak hours. As one can see, India as a whole had a power deficit of 8.7% on average and 9.0% during peak demand hours. 

(The states are ordered in the same performance order as in the above graph for easy comparison). 

Electricity demand and supply for major states in 2012-13











  Note: BU means billion units, 1 unit = 1kwh
Source: CEA Annual Report 2012-13page 169

The picture can't be clearer: all four southern states which earlier seemed to be out-performing Gujarat in the first analysis are completely failing on this metric. Peak stage deficits of 10-20% in these souther states as well as in UP & Bihar is horrible, to say the very least. Such power deficits force load shedding, which is never uniform within a state; semi-urban and rural centres face maximum power cuts. 10-12 hours of power cuts are not unheard of in these states.

Gujarat, on the other hand, has a power deficit of a mere 0.2%-0.3%, even during peak hours. That's commendable, and clearly the best performance among all 12 major states. This directly implies 24 hours power availability every day of the week - well, 23 hours 57 minutes 7 seconds daily to be exact.

If there is any other state that deserves a mention, it's West Bengal. While WB still lags far behind on electrification (55% households electrified as of 2011, see previous graph), it runs a power deficit of just ~1% during peak hours. Goes to say more about how Buddhadeb was an odd man out in his party.

Finally one must also explore as to how Gujarat has been able to achieve the above, and whether the model is sustainable or prone to breakdown under pressure? The table below compares financial performance of the state electricity distribution companies for all 12 major states over three fiscal years. The data is sourced from performance report published by Power Finance Corporation, a GoI undertaking and "a Financial Institution (FI) dedicated to Power Sector financing and committed to the integrated development of the power and associated sectors". 

Cash profit (excluding Subsidies received) for distribution companies for 12 major states
(Rs Crore)
Note: (Cash profit - Subsidies received) is used as a measure of financial health of state's distribution companies. In my opinion, that's the best representation as it doesn't consider any subsidy received from government (since subsidy is not a sustainable manner of operating) as well as also removes any amount booked as revenue in the P&L statement but lies as incremental receivables in the Balancesheet (i.e. not collected as cash). Experts in power sector & accounting will tell you that any increase in receivables in a utility business are better written off - they would mostly never be realized as cash.

Source: Performance section on PFC website
(Click on the link "Performance Report of State Power Utilities")
Exact link of pdf file(Pages 70-75)

As the table above demonstrates, the four states of Gujarat, West Bengal, Kerala, and Karnataka (highlighted in the table above) are able to conduct distribution operations without operating losses even before any government subsidy kicks in. This is not to suggest state government doesnt provide subsidy to its distribution companies, but these that distribution companies are financially healthy on their own. What's remarkable is that at least for Gujarat, all four distribution companies are 100% government owned - Mr. Modi got it done using the state resources alone!

All other major states (especially Tamil Nadu and Rajasthan) present a very sorry state of affairs. Result: massive government subsidies and/or losses on balancesheet, no money / delayed payments to pay to power generating companies, load-shedding...Indeed, working capital cycles in Tamil Nadu have often been mentioned to be in the range of 9-12 months. 

The verdict: 
  1. 90%+ households in Gujarat have access to electricity (as of 2011) which is in close range of the best performing states - Kerela, AP, TN and Karnataka. Still, a small gap remains, efforts should be made to close the remaining 10% as well. All other major states lag behind significantly, though WB and Odisha made very significant progress during 2001-11.
  2. Gujarat, (with West Bengal a close 2nd), is far, FAR ahead of all other major states on providing adequate electricity to its electrified households as per demand: 24*7 electricity to all households with an electricity connection to be precise (for financial year 2012-13). Negligible deficit ratios of (~0.2% in Gujarat, ~1% in West Bengal) are commendable achievements.
  3. Gujarat power distribution model seems sustainable: state distribution companies are financially sound, as is the case with three other states (Kerala, Karnataka and West Bengal). This is in stark contrast to all other major states, where distribution companies are in financial doldrums.
If one has to pick a winner, it would be extremely hard to chose from Gujarat and West Bengal, maybe the former has a very slight edge - but one should also consider the huge disadvantage West Bengal started off with in 2000 before Mr. Buddhadeb came along. Quite deservedly, Mr Modi needs to be given credit for this fairytale story when most other states struggle. It is very hard to pick a state for the third spot - rather, it is safe to say that the difference in performance of these two top states of Gujarat and West Bengal and that of all other major states is very, very significant. One should give credit where due.

Specific measures taken by the state government in Gujarat under Mr. Modi which has resulted in the above performance is not a subject of research of this article, the same is easily google-able.

Food for thought: Free power in short run means no power in long run.

[Update: In the first graph, corrected column labeling of # households from 2011 to 2001, and added actual 2011 household numbers as well.]

37 comments:

  1. Extremely well written! Although when you try to pick a winner, one factor could be that West Bengal has the advantage of (1) being located in the heart of India's coal belt (the cheapest fuel for production of bulk power) and (2) proximity to hydro plants on the NE rivers. Gujarat, has none of these advantages and still manages to be power surplus (nearly) specially in the peak load scenario. This is truly commendable!

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    1. Thanks Shubham. You are right that WB has huge advantage due to proximity with coal, hydro plants while Gujarat has no such advantage.

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    2. Same is the case with MP
      And Rajasthan is even worse, it dont have either of the 2 ingredients for making power, Coal and Water.

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  2. very good analysis by the author. Let me also include a point on the turnaround of SEBs. The Gujarat State electricity board (GSEB) posted a loss of 2246 crores in FY01. Under Mr Modi's government and action plan, losses reversed by FY06 and GSEB posted a profit of 533 crores in FY11. This compares to a situation where majority SEBs are still bleeding as highlighted by the author above. For the benefit of readers, i am pasting a MSM article on the details of turnaround here
    http://businesstoday.intoday.in/story/gujarats-power-sector-turnaround-story/1/21750.html

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    1. Yes, Gujarat SEBs (like most other SEBs) were bleeding when Modi started his tenure. While Gujarat SEBs were turned around, most others increased their bleeding so much so that the entire distribution network of India is facing a serious existential threat.

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  3. Wow. Thanks for the insight

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    1. Thanks BVS, glad you found it useful

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  4. Very informative article, backed by solid data.

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  5. This is show that "how the Good Governance works and one person with determination can change the scenario in reality not even in paper"
    I really proud of Mr. Modi and Salute him as well as former CM also.
    Last But Not Least
    "When there is will find the Way"----------------Some body say very right.

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    1. Dear Ashish, that's a valid point, and a significant factor (among others) in such performance delivery

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  6. Tamilnadu gives free power to farmers and has one of the lowest fares in the country.When the state can afford the losses in electricity boards by revenues from other sources like TASMAC which gujarat ignores due to its policy of confused partial prohibition for a few resulting in losses running to several thousands of crores how can that be taken as poor management

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    1. While Tamil Nadu does provide free power to farmers and has the lowest fare, it is all the state where people outside chennai face upto 16 hours power cut during the peak season.
      Reason: The power companies do not have the money to build new power plants/ augment production from the existing ones

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    2. Dear Poovannan - Proof of the pudding lies in eating. As Parathan points out as well, if indeed loss-making distribution operations would be viable, Tamil Nadu wouldn't have such massive power cuts which it population faces today. Wide scale state subsidies just do not work - they have not worked in any part of our country, neither do we have any example of sustainable performance globally. Subsidies by Govt to any organization (pvt/psu) breed huge inefficiencies / money-siphoning, and money which was supposed to be invested into infrastructure is lost due to such the same. The intended beneficiaries, people at large, suffer.

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    3. not all farmers are given free electricity.why should they give it free.it is all election tactics as both DMK & ADMK claim that it is their gift to farmers.nothing is free some one is paying for it.They buy at high rates to keep the agitated consumers and incur losses.Arcotar bought at a high price and didnot enter into a long term deal with private producers or augumented EBs capacity.thry have coal fields in Indonesia and bought useless coal from there.it is alleged even K N ramajayam(br of K N Nehru) has coal fields in Indonesia.they amassed wealth by making TNEB a loss making unit.See what happened to Hindustan teleprinters and OOty film plant.Why Rlys could not give better service even the Rajdhani service is very poor,because tkts are not priced profitably.No commercial venture can be run on loss in the long run.

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  7. Pardon my naivete, I'm not well versed in the art of Excel jugglery. Another way to look at the data is that KERALA ROCKS! From 70% to 94% electrification. Slightly lacking in peak power surplus, but almost the same as Gujarat when it comes to cash profit (excluding subsidies), even though it has 2/3rd the number of households compared to Gujarat. Shall we follow the "Kerala Development Model" when it comes to power?

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    1. Dear Saurabh. Kerala is the best among southern states, however I would be wary of putting it even at a 3rd spot overall. After Gujarat & WB, states as Kerala, Maharashtra and Odisha are somewhat average. I am worried when I see peak deficit of ~9% in Kerala which is same as whole India average. You don't get power when you most need it (summers / afternoons etc). One thing to appreciate is that they are financially disciplined, and not providing power when they can't charge the customer for it. However I would not read too much into "higher" profit per household. As long as there are some cash profits after providing for depreciation and before subsidies, on a consistent basis, you are home. 100% Govt owned entities carrying out utility distribution business as monopolies are not expected to maximize shareholder returns by generating ever-higher profits.

      Second point is crucial - choice of a development model cannot be done as a replication of a specific state. Kerala is a v. different state, so is Gujarat or WB. What works in one state might or might not work elsewhere. I would rather look at it as a validation of basic governance model adopted by the political partnership in that state, and hence expect that if and when such political leadership comes to power at national level, it will be able to evolve a relevant development model for the country as a whole as well, similar to the way this leadership was able to do it for the specific state.

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    2. You are right , if Gujarat reaches from current 90% to 94% of supply which kerala already has ,then they also have same deficiency in production. In kerala also power is distributed by KSEB only. Kerala actually speaking can be surplus in power production if they are ready to buy full capacity power from NTPC Kayamkulam. They are not doing it as it cost around 14 rupees.

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  8. This comment has been removed by the author.

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  9. @The Explorer
    Great Article ! Thoroughly enjoyed your argument.

    Just one pedantic observation if i may.. I was just checking the census against the summarized figures. in your first horizontal bar graph... you mention 96 lakh as total households in Gujarat as of 2011. Census seems to show 121 lakh
    http://www.censusindia.gov.in/2011census/hlo/District_Tables/Distt_table/24/HH2507-2400CRCD.pdf

    Did you mean to say households in 2001 was 96 lakh ? Wasnt able to access the same data for 2001.
    Would you have the link to that ?

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    1. Dear Kartik. The households numbers in the table above are 2001, I am now adding both 2001 and 2011 for full data. Thanks for pointing this out.

      The state-wise %-electrified households are done correctly for both 2001 and 2011.

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  10. Fantastic analysis. Evidence based and spot on. Enjoyed reading it.

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  11. Usage of solar power component vis a vis wind power in the power management may also be integrated in this study if possible.Karnataka has an example of social forestry based wood gasifier assisted electricity provider experiment.These data will add up to the technology appropriation component in the power management sustainability efforts.Congrats and Regards

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    1. Dear Dr. Sankaranarayanan - power generation from solar / wind / other renewables etc on an industrial scale, will fall in the ambit of power generation sector study. Given this study is on power distribution, I have limited it to source of lighting in the household - if its electricity then that electricity might be generated through solar / wind instead of coal / hydro by the power generation company. However, if the household is being lighted directly by solar panel (atop that house usually), it is shown under "Other" in the first graph. Insignificant though.

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  12. I have just entered my comment as unknown 12 march 2014 18:10 Regards.

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  13. I also agreed upon analytic that gujarat is not the best but it is one of the best. But while west bengal improved a lot...
    This is show that "how the Good Governance works and one person with determination can change the scenario in reality not even in paper". This is the true leadership.

    I really proud of Mr. Modi and Salute him as well as former CM also.

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  14. Really good article.....especially I like title of your blog "In Pursuit of Truth". Few people seem interested in it these days.

    Just a few points though:

    1) I do not have the statewise break-up of no. of households. Hence, I use population as a proxy.
    AP's population = 846 million = Roughly equal to (846/4) 211 million households
    WB's population = 913 million = Roughly equal to (913/4) 228 million households

    From your statistics,
    Electrified households (primary source as electricity) in AP = 92% of 211 million = 192 million
    Electrified households (primary source as electricity) in WB = 92% of 228 million = 125 million

    Hence, AP provides electricity to approx. 70 million more households with a peak deficit difference of 2.88 BU. This is bound to happen as it feeds electricity to considerably more number of households.
    Hence, I find the comparison between the two to be somewhat unjustified. We can compare the 2 when WB achieves >90% electrification.

    Same argument goes to Gujarat. Similar calculation yields that it feeds 135 million households. (Still 60 million short of AP for comparison purposes). However, it is doing the best it can as there are only 10% more households left to be electrified.

    2) Two important points need to be considered when comparing the cost-effectiveness of production:

    a) The availability of power generation units in side or nearby the state (Reduces transmission costs).

    b) In the supply-demand game, it is usually the electricity cost of the last 60-70 odd million households that increases the electricity cost as the locally produced electricity is not sufficient and it has to be borrowed from far off places at higher rates due to higher demand.

    c) Also nothing is mentioned about the power tariffs in the states. Some states might be funding the electricity supply by giving out electricity for lower rates and covering the deficit by taxes earned elsewhere. Other states might be having a higher electricity tariff and use that surplus to plug deficits elsewhere. Hence, to make any comment we must know the overall tax and subsidies structure of the state.

    Hence, overall without these statistics I think it would be spurious to declare anyone first or second.

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    1. Dear The...

      1) The 2001 household numbers were already provided in the first graph, have added 2011 numbers as well. I disagree that if you have to feed power to larger number of households, its ok to run power deficit. That's just not done - large states have large income streams, large resources, large govt machinary, and so on.... power cuts are not justified. These states just dont have money to buy power due to inefficient operations being run since long time.

      2a) Agreed, and as it is pointed out in the first comment itself, Gujarat has a huge disadvantage due to almost nil coal mines or hydro power, as well as situated far away from states which provide coal (eastern states)

      2b) Yes, thats th challenege, and need to be managed by the Govt. of that state. Thats where you display your governance skills and long term thinking

      2c) Disagree - running losses in one business through funding from other business always breeds inefficiency in both businesses. Simple principle - cover costs of one business from that business, subject to subsidies that the state govt HAS to provide for the really marginalized section of the society (10-20% maybe). Cross-subsidizing has never been a successful general principle, should be done on an exception basis for very specific tasks. Utilities doesnt fit the bill - such operational losses means power cuts. This is not kerosene distribution which is strategically subsidized by the govt as it caters primarily to rural poor. More on that some other time

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    2. Just some quick thoughts about your arguments:
      1)
      - Point taken for now. So we cannot compare AP and Gujarat. But we can certainly compare WB and AP. Both are almost equal in size. (Not geographic but population-wise)
      - Do you have any solid stats that say that the larger states are inefficient in distributing power/other operations (like power loss ratios, man-power ratios)?
      - When you meant income streams I assume you meant tariff revenue (from your argument, I gather that you are not a big fan of cross-subsidizing). So when it comes to tariff revenue we would again need statistics about tariff rates to accept or reject your argument.

      2b)
      Are the power deficit figures mentioned in your article annual figures? If so, AP has an annual deficit of 17.52 billion units.
      - That is equal to (17.52 billion / 200 million) = 87.6 units annual deficit for every household.
      - That in turn is equal to 0.24 units per household per day. Assuming a household uses 10 units of electricity in a 24-hour day, 0.24 units translates to approx. 30 mins everyday.
      - Why are you in favour of providing 24 hours electricity to 120 million households as compared to providing 23.5 hours of electricity to 200 million households ? (It is almost as if you did not want 80 million households to enjoy the benefits of electricity. Although that would not be your intention your argument unwittingly suggests it.)

      Of course, my entire argument is based on the assumption that 17.52 billion is an annual figure.

      2c) "Running losses in one business through funding from other business always breeds inefficiency in both businesses". True and False to some extent. Ever heard of the BCG matrix? Cash cows are used to fund operations in Stars. What it means is that the initial phases of an exciting new venture are funded by cash-cows i.e. established money-making ventures. Google follows it quite successfully (It uses its revenues from Search Engine business to fund other initiatives). So do host of other companies. Similarly, AP as a state has lots of cash-cows (Hyderabad industrial hub, belt shops etc.). It uses the money from these to subsidize the electricity for now. It can discontinue this and raise tariffs once 100% of the population gets electricity and the general economic standard of the people increases. Don't you think it is worth a try?
      Also when you make sweeping statements like "Cross-subsidizing has never been a successful general principle" please do back them up with stats or facts or examples.

      Anyhow Thank You for giving me an opportunity to exercise my brain. One does not get enough opportunities on the internet these days. Would love hear your thoughts on the points.

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    3. Dear The... My responses as below

      1. I am not sure where I implied that AP & GJ cant be compared, or AP and WB can be compared. Here the objective was to compare Gujarat which is a mid size state and hence v small states of NE, hilly states of UT/HP/J&K. v small states of Sikkim/Goa and Union Territories were removed for ease of presentation. I have numbers for all of them and the answer still doesn't change. Every state would be different from other states in size and population, that alone can never be a justification for lagging performance by one state relative to others. There might be other factors though which many comments in this article carry.

      Similarly, I never suggested larger states are more inefficient in power distribution. I do believe v large and populous states as Uttar Pradesh might have a chance at improving if divided into 2-3 new states, but hey thats just my opinion and not the subject of this post.

      By income streams I do not mean tarriff revenue alone. Tarriff revenues are meant to cover power purchase costs and overheads + depreciation. However the current power distribution infrastructure in in such a mess today in many states (Gujarat was similar a decade back) that you need significant investments to begin with so as to achieve 90% electrification etc. Large states cant run away saying that its ok to provide 80% household electrification since these states have large population.

      Further, I haven't touched upon tarriff rates since power distribution companies have tarriff rates determined by regulatory authorities - they cant price power at will even if they are govt entities. Such tariff determination takes into account power purchase cost which is far higher for some states due to negligible coal reserves in the states and/or no large rivers suitable for hydel power generation. Gujarat suffers from both handicaps due to its location, and hence has tariffs higher than others.

      (contd)

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    4. (contd)

      2b I disagree with your analysis on multiple fronts
      (i) You have by mistake taken households of AP as 200mn, its 210 lac hence 21 mn. Redoing your calculation gives 850 units annual deficit, ~2.3 units per day, means much higher deficit 23% if I take your assumption of 10 units per day. That also means 5-6 hours of power cut (and not 30 mins) in AP.
      (ii) However, the above anyway is not the right way to look at it. Agreed Gujarat has 12 mn households instead of AP's 21 mn, however the power demand in Gujarat is 94 BU vs AP's 100 BU - almost similar, right - this is due to the fact that Gujarat is heavily industrialized. So, almost similar power demand but significantly different power deficits.

      2c) I used to work at BCG - so I know a thing or two about the famous matrix. I am not a huge fan of the same, or for any other standard framework for that matter. However, since you have applied it here, let me give my take on it. BCG matrix defines stars as those young businesses which have very good future profitability prospects, but need significant capital investments to support growth. Cash cows are mature businesses which have strong free cash generation capabilities since slow/no growth and hence capital investments not required. An ideal portfolio is recommended to have a healthy mix of both. The framework is not applicable here since the lower middle class / middle class that actually pay for the electricity are not "cash cow" businesses for the Govt. Similarly, the poor is not the "Star" business equivalent for the Govt. The framework is irrelevant here.

      Money generated from so-called stars as hyderabad etc is best spent on infrastructure improvement (not just roads, but education and healthcare facilitie...i.e. social infrastructure). Subsidies don't improve standard of living, it keeps the poor segment of the society as poor only since it doesn't enhance their standard of living in a real manner. Worse, it makes them believe its ok to be poor since their basic necessities are met by subsidy. Worst, the previous scenario doesn't play out and the subsidy is in fact eaten up by corruption.

      My articles would always be based on facts and data, my comments would be based on my general knowledge and biases and as such you are free to reject them at face value, I cant provide data for all comments I make. Happy to engage if you would have a few concrete examples where cross subsidy works in a sustainable manner. On the contrary, i would cite examples as Indian public distribution system of food grains and kerosene, subsidy given on LPG and diesel. these are in addition to big power deficits run by states which subsidize power on a grand scale. I recommend you to please read my first post - I am always for a limited redistribution of wealth in a capitalist society; however blanket subsidies in power distribution doesnt fit the bill.

      Glad you find the analysis interesting. We can agree/disagree on merits of various governance models for various subjects such as power distribution et, since we believe in different political ideologies.

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  15. As done in the west dynamic costing of electricity with a software control on the vulnarable weak segment of the society may help in O R of power tariff decisions..I am sorry if I am more jargon savvy.but that is possible now that edp and data mining is easy access to any company.GOD help us..sustainability investments also have to be incorporated..slowly zero emission is to be aimed..thanks

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    1. Dear Dr Sankaranarayanan - Your post makes perfect sense. The only issue in India is the identification of "vulnerable weak segment" of the society. Any such exercise is almost always completely drowned in corruption, and the real intended beneficiaries never get the moolah. Be it the slub rehab schemes of Mumbai, or the compensation schemes for Bhopal gas tragedy victims - its the same story everywhere,

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  16. Excellent article and interesting analysis. However, I agree with everything you say with the exception of WB.
    If I look at the numbers provided by you as well as the population of WB and Gujarat, Gujarat has about 2/3 of the WB population and a peak demand that is ORDER OF MAGNITUDE higher than WB. What this means is that WB is woefully underdeveloped and it is lot easier to meet a "smaller power requirement" with reasonable success. The challenge (as with Gujarat), is around 2/3 population of WB is consuming 10x more power (during peak) and 2X more energy (average). Its simply unfair to compare them on the same chart. Gujarat is way ahead in the game.

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    1. That's an excellent point. While everyone knows Gujarat is far more industrialized and hence has much higher demand for power, I didn't consider it when specifically comparing Gujarat and W. Bengal.

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