Read how Gujarat govt turned an ailing energy sector into successful

In early 2000, Gujarat’s energy sector was in shambles simply as another state within the nation. The villages and the cities barely had entry to a continued provide of electrical energy. A decade later, Gujarat ensured that its 18,000 villages and 9,700 hamlets had entry to the round the clock three-phase energy provide.
The fascinating turnaround story of Gujarat’s energy sector over the past twenty years, first below Narendra Modi after which below varied different Chief Ministers, is usually cited as a mannequin for energy sector reforms within the nation. Today, Gujarat has extra energy than it wants, with low tariffs and an uninterrupted energy provide.
So how did the turnaround actually occur? Here is the story:
Before 2001, electrical energy in a rural village was a uncommon commodity. The state’s electrical energy sector was loss-making because it was riddled with excessive inefficiencies and corruption. When Narendra Damodardas Modi took over as chief minister of Gujarat in October 2001, he discovered the state’s energy state of affairs grim. The Gujarat State Electricity Board, or GSEB, was in deep misery with a mounting lack of over Rs.2,200 crore in 2001. The GSEB paid curiosity prices of about Rs 1,227 crore within the fiscal 12 months.
In addition to that, the transmission and distribution losses had been as excessive as 35.27 per cent, and cargo shedding was a frequent phenomenon. The GSEB was additionally affected by a fund crunch to supply its personal energy, and it couldn’t persuade the non-public sector to put money into the state.
Several points, reminiscent of energy era issues, larger gasoline price, mounting losses, and lack of energy to unmetered provide, had plagued the Gujarat energy sector. However, in his first time period because the Chief Minister, Modi took up the challenges and initiated a sequence of reforms to revive the state’s energy sector.
Holistic reforms in Gujarat’s energy sector
The then Chief Minister Modi’s first main choice was to nominate Manjula Subramaniam, a joint secretary within the prime minister’s workplace, because the Chairperson of GSEB and Principal Secretary, Energy and Power. Soon, the officer was authorised with full powers wanted to deal with the disaster that had hit the state. Manjula Subramaniam initially focused on two areas: reinforcing the facility utility’s funds and elevating worker morale. 
At first, a debt restructuring initiative was taken up, by which banks and monetary establishments had been persuaded to decrease their rates of interest. Next, the GSEB renegotiated the facility buy agreements or PPAs signed with non-public gamers and introduced down the charges for energy procurement, which resulted in financial savings of Rs. 500 crore within the subsequent 12 months and one other Rs.1,000 crore within the subsequent.
Following 12 months, the Modi authorities started to plug the leakages within the distribution sector by performing on energy thefts in Gujarat that ranged between 20 per cent in city areas and 70 per cent in rural areas. The authorities handed a legislation in opposition to energy thefts and arrange 5 police stations throughout the state to behave on energy thieves. The authorities acted strictly on companies with giant pending payments, together with disconnecting their provide in the event that they did not clear the arrears.
In rural areas, unmetered energy provide was stopped altogether. As the tariff for energy used for agricultural functions was a lot decrease, many stole from this subsidised provide for his or her family wants as effectively, leading to big losses for GSEB. To deal with this, the GSEB joined fingers with the Asian Development Bank to fund the putting in of meters.
Jyoti Gram Yojna – the flagship scheme of Gujarat authorities
One of an important reforms launched was to separate the feeder line that provided energy to the agricultural areas into two. The provide energy for agricultural wants and non-agricultural utilization for the family was differentiated. This was a part of the Jyoti Gram Yojna, a scheme Modi introduced in 2003 to provide round the clock energy to villages. The success of the scheme was such that after Narendra Modi was elected because the Prime Minister, the scheme was scaled up on the nationwide stage as “Deen Dayal Upadhyaya Gram Jyoti Yojana”.
The Jyoti Gram Yojana (JGY) was launched in September 2003 to supply three-phase round the clock high quality energy to home and business customers of villages and their hamlets.
Under the scheme, a parallel rural distribution community of 78,454 km of recent traces, 2,257 JGY feeders, 18,724 new transformer centres and 4,530 particular design transformers had been arrange. The JGY managed energy theft and losses, thus releasing the distribution corporations from struggling main monetary losses. The monetary well being of those Discoms grew to become higher year-after-year.
Continuing, in May 2003, the Gujarat authorities additionally handed the Gujarat Electricity Industry (Reform and Reorganisation) Act, which divided the GSEB right into a holding firm, an influence era firm, an influence transmission firm and 4 distribution corporations to carry higher administration and environment friendly operations.
Thinking forward of its time, the Modi authorities had additionally arrange a state electrical energy regulator – a primary within the nation. The regulator was made really unbiased of political pressures, thus giving them the liberty to revise energy tariffs yearly to keep away from any losses to the exchequer.
Another lowkey reform, however that had a tangible final result on the restructuring of the state’s energy sector was restoring the workers’ confidence. Manjula Subramaniam was tasked to know the considerations of many workers, who had feared for his or her job loss because of the widespread reforms. The GSEB reached out to the workers and began coaching programmes in any respect ranges to talent them for redeployment. The state authorities ensured that nobody was laid off. The success was evident inside weeks, as now workers took extra curiosity in reforms, and so they themselves started to implement the mandatory reforms.  
The a number of reforms initiated by the Modi Government to re-configure the facility state within the state created wonders. The losses had been stopped, and environment friendly utilization of electrical energy with none leakages was made the norm. The main upgradations and clear minimize insurance policies pertaining to the facility sector additionally boosted investor confidence, who had been prepared to herald non-public capital for energy era.
Within three years, the large energy sector reforms undertaken by the state Government yielded outcomes, making Gujarat into an influence surplus state by 2003. The erstwhile GSEB, which has now been rebranded as Gujarat Urja Vikas Nigam Ltd (GUVNL), had posted a lack of Rs. 2,246 crores in 2000-01, on income of Rs. 6,280 crores. In 2019, GUVNL posted a revenue of Rs.928 crore on whole income of Rs 50,959 crore.
If one takes a better take a look at the mandatory reforms initiated by Gujarat, particularly within the areas of capability addition, restructuring energy distribution corporations – reveals how the management took breathtaking reforms to make an influence deficit to a surplus state inside a decade.
Several states have initiated such reforms up to now few years to enhance their energy era capacities and Discoms by replicating the Gujarat story. However, not all states have achieved main success. As Prime Minister Modi took the reigns of Delhi in 2014, he launched holistic reforms to restructure the facility sector throughout the nation. As Electricity is a concurrent topic, states too have equal accountability to hold out such reforms that the centre has incentivised. There has been a slight enchancment within the energy sector within the nation, nevertheless, a lot must be executed.