Central Hall – Freebies Anyone?

Mumbai: So, Congress minister for Energy Dr Nitin Raut and senior Nationalist Congress Party (NCP) minister for Finance and Planning, Ajit Pawar are headed for an imminent showdown. It is over the formers adamancy of implementing free power for consumers consuming power less than 100 units. It has rekindled the debate over the efficacy of freebies in a heavily debt ridden economy. The multi-million dollar question is – just who pays for it?

Out of the total installed power generation capacity of MahaGenco of 13,602 MWs, Thermal power generation alone accounts for 10,170 MW’s, nearly 75%, 2,580 MW’s comes from Hydro power and rest from Gas and Renewable Energy sources.  What is pertinent to note here is that most of the generating units of the seven odd Thermal power projects in the state, many units have now outlived their lifespan and are in need of overhauling.

Even if they are overhauled, as some have been overhauled, thermal power world over is now being viewed and labeled as the prime cause for greenhouse gas emissions that are responsible for global warming. That leaves the only option of Nuclear power and Renewable energy resources.

Also Read: Central Hall – Tinderbox Session!

Already, the Shiv Sena has red-flagged the 9,900 MW Jaitapur nuclear power plant project. That leaves a huge question mark as to from where will the free power come from? How will the already stagflating and debt burdened economy be able to provide with this freebie?

This is not the first time that the Congress has made the promise of free electricity. It may be recalled that in 2004, ahead of the Assembly elections, then chief minister Sushilkumar Shinde in a bid to steal the thunder out of the Shiv Sena chief late Balasaheb Thackeray’s promise of free power to farmers, had announced free power.

The government had then even sent Zero tariff bills to farmers initially. But after coming to power the scheme was winded up within few months. When asked about it, Shinde had then famously had remarked “it was part of our election strategy”.

However, the same Shinde after becoming the Union Power Minister agreed with then Prime Minister Dr Manmohan Singh stand against free power.

It may be recalled that the Congress ahead of the 2014 Assembly elections had promised free power. But soon went back on its promise citing financial constraints.

The International Institute for Democracy and Electoral Assistance (IDEA) in its recent research paper titled ‘Populist government and democracy: An impact assessment using the Global State of Democracy Indices (GSoD)’, has noted that populist governments and populist politicians tend diminish the quality of democracy relative to non-populist governments. It has observed moderate backsliding in democracy in India from 2006 to 2018.

The more classic cases freebies and sops going bust are the economies of oil rich Venezuela, Greece, Zimbabwe, Nicaragua and Pakistan. The IDEA notes that economies of Venezuela, Nicaragua and Pakistan from 1999 to 2018 have witnessed severe democratic breakdown on account of populist measures. These economies have been marked with high rate of crime.

As it is as per survey report of Iman Ghosh in Visual Capitalist for February 2020, India ranks 54 in the list of 60 countries, in the list of ‘World’s Most Innovative Economies’ with a score of 49.33%. This comes at a time when the government aims at making India a 5 trillion dollar economy.

Agreed, that the poor and the marginalized need a helping hand from the government. But more than the Ease of Doing Business, the government also needs to ensure that the people have Ease of Living. What ideally people would want is that things like power, water and essential items are at affordable prices rather than being dirt cheap which lacks quality.

The unchecked freebies in countries like Venezuela and Greece created a class of citizens who prefer to remain idle and surviving on government handouts. The joke that does the rounds in Venezuela is that people have dirt cheap Gasoline to wash their hands with, but cannot barter it to buy anything else. There is an old saying ‘an idle mind is a devils workshop’.

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