Zee Media Bureau
New Delhi: With Delhi Chief Minsiter Arvind Kejriwal fulfilling his party`s promise of providing free supply of 700 litres of water everyday for Delhi households, all eyes are set on the Aam Aadmi Party (AAP) whether it would deliver on its poll promise of reducing the power tariff by 50 percent in the national capital.
The AAP, has hit the bull`s eye by delivering one of the much-vaunted scheme in 48 hours since coming to power, which topped the 18-point agenda of implementation.
Kejriwal on Monday delivered on the AAP`s poll promise by announcing 20 kilo litres of free water a month to all metered households. The Congress questioned the move, saying Kejriwal should ensure that every citizen of Delhi gets 700 litres of free water per day.
The government`s decision, however, came with a rider that those consuming over this limit will have to pay as per tariff, enhanced by 10 percent, effective January 1.
The promise of 700 litres of free water to every Delhi household was made in the AAP poll manifesto.
The next big challenge for the new political outfit is to fulfill its promise of slashing power tariff by 50 percent.
Ever since Kejriwal formed AAP, he has been focusing his Delhi campaign on reducing power tariff and free water supply.
Experts say that reducing electricity tariffs by 50 percent can only be done only if subsidies are doled out.
“It is unlikely that the utilities can bring down the electricity tariffs by 50 percent without government providing them with cash subsidy,” Debashish Mishra, Senior Director, Deloitte India said.
However, he added that there may be scope for further loss reduction in distribution, demand side management measures and cost optimisation in O&M (Operation & Maintenance).
“In the short run, it will be a viable idea to identify a category of customers where such subsidies can be targeted and their tariffs reduced to the extent promised by AAP,” said Sambitosh Mohapatra, Executive Director, PwC.
He said that broadly the tariff is determined by four factors - existing operational efficiencies, capital and cost structures, power purchase agreements, and regulatory (assured and authorised) assets in the sector.
“In the longer run i.e. over next 5 years, if annual tariff increases is contained at the existing levels by managing the four outlined factors, then effective reduction can be stated to be around 50 per cent,” Mohapatra added.
Electricity tariffs were revised in the Capital in July this year. Delhiites pay a minimum of Rs 3.90 per unit tariff.
AAP has said that it would seek complete statehood for Delhi, special audit of all electricity companies, regularisation of unauthorised colonies, stopping donations in private schools and improving working conditions of contract labour and lowly paid employees.