On 3rd Feb, with the back ground of beating of drums and playing of trumpets, National Electricity policy was proclaimed. If Electricity act 2003 is only a legal frame work of the neo-liberal policy pursued by the government at the centre for the last one and a half decade, the new policy is only a foot, tailor made to suit that boot - EA 2003.

Those who keenly observe and study the developments taking place in power sector will search whether there is any change in the newly announced policy ( as per sn.3 (i) of the act) and the policy in force. One can only find one positive change, that too not significant when considering its basic approach. The change is on the policy of rural electrification. Both the treasury bench and the opposition were very critical on this issue while the bill was tabled and discussed in the parliament. Both the governments at the centre and states were leaving the responsibility of rural electrification to local bodies, NGOs, voluntary organizations etc as per sn.5&6 of the bill. Even though the government did not yield an inch respecting the aspirations of the people’s representatives, they came out later with a proposal of rural electrification policy .This policy promised a capital subsidy to states for rural electrification and the government came out with a fallacious plea that this will ensure tremendous progress in R.E.But. NCCOEE vehemently opposed this argument and opined that mere construction of lines , installation of transformers and proving connections to rural dwellings alone will not serve any purpose. Only with the support of cross subsidy in tariff, the rural folk can consume power. Left parties also moved in the same line. So the issue was caught in the cross hairs of media and a sizable section of opinion makers. In this back drop, in the new power policy , government was forced to announce cross subsidy in tariff, to those who consume less than 30 units a month. The policy is bent up on levying the total ‘cost for providing the supply’ and ‘the cost to serve ‘from all other sections of consumers without any discrimination based on their ability to pay or on the category of consumers. The concerned regulatory commissions are delegated with the powers of making necessary rules and regulations for implementing the above policy.

It is to be examined whether the statutory obligation of consultation with the state governments before formulation of the policy has been carried out meaning fully.

The National policy will provide a political frame work which is conducive to the so-called growth of power sector in an open, non- discriminatory, competitive (?) and market-driven environment.

The connotation of the word ‘completion’ in power sector itself is privatization.Delicenced generation, open access to transmission and distribution net works, multiple licensees in the same area for transmission and distribution, separation of trade from distribution etc were provided both in the act and the policy to achieve this goal of ‘competition’ thro’ the total privatization of the sector. Even though there is clear provision as per sn.131 of the act to keep the EB as a single entity, which is the prerogative of the state government, the government at the centre resorts to arm-twisting tactics to unbundle the EBs, is to ensure privatization in the near future.

The policy also prescribes the following to promote market driven pricing and privatization:

A significant portion of the installed capacity of new generating stations should be set apart to sell in competitive power market.

Net work expansion shall be planned and implemented with adequate margins keeping in view anticipated transmission needs likely to be incident on the system in the open access regime.

Private sector participation should be encouraged thro’ fix return on investment. This guaranteed profit to the investors clear all their uncertaininties and concerns.

The concerned Regulatory commissions should make necessary rules and regulations with in six months to attain the objectives of E.A 2003 and the national power policy.

The declared aims and objectives of the policy are the following: