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How Piyush Goyal healed an ailing department and brought it back to its feet

Vasu Vashisht by Vasu Vashisht
18 December 2015
in Analysis, TFIUvaach
piyush goyal
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When Piyush Goyal took charge of coal, power and renewable energy in Modi Sarkar, the young and energetic minister of state was handling a very volatile ministry which was famous for not getting anything done, in the UPA era it was divided between three cabinet ministers. The ministry was a complete mess with an alleged 1. 8 lakh crore scam, stranded thermal power plants, Fuel shortages and mounting debt of state utilities were some of the problems Piyush Goyal inherited. Under his leadership, India saw its first coal allocation through the e-auction method and power generation grew to record 22,544 Mw.

The minister has an opinion that governments will be judged by their performance when they go back to people in next elections. The governments that perform well are voted back with renewed majorities, while the bad ones go out. The minister is looking at a billion tonne coal production, 100 Gw of solar power capacity and investments of about $50 billion in the transmission and distribution sector in the next five years.

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The power ministry under the leadership of Piyush Goyal has approved the launch of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) for ensuring 24×7 power supply and Ujjwal Discom Assurance Yojana (UDAY).

Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), the Rs 43033-crore scheme would separate agriculture and non-agriculture feeders, facilitate judicious rostering of supply to agricultural and non-agricultural consumers in rural areas, and strengthen sub-transmission and distribution infrastructure in rural areas, including metering of distribution transformers/feeders/consumers.

Ujjwal Discom Assurance Yojana (UDAY) would focus more on State DISCOMs which have over the years accumulated a debt of waver Rs 3 lakh crore. Faced with acute financial stress, many of these are unable to buy power. States have been given strong incentives such as cheaper power and more coal if they adopt the UDAY scheme and take over 75% of the debt of ailing distribution companies (Discoms), half of it in the current fiscal year and 25% next year. UDAY will succeed in turning around DISCOMS because, it is an entirely bottom up scheme which has emerged out of the culmination of the engagements with bankers, Discoms, power producers, consumers bodies, state governments and all the other stakeholders over a long period of time. Union power minister Piyush Goyal has estimated UDAY will eventually lead to a saving of Rs 1. 8 lakh crore annually.

When NDA came to power, the situation of 100 power plants monitored by the Central Electricity Authority (CEA) was so dire that as many as 38 were left with only a week’s worth of coal to burn, while 20 have had as little as four or even zero days of coal stocks. The main reason of this situation was the stagnation in coal production, even as the demand for electricity grew manifold.

Within a year the situation has changed dramatically, in September a delightful Coal Secretary Anil Swarup tweeted “Coal imports down from 17. 3 MT in Sept 14 to 12. 6 MT in Sept 15. In value terms from Rs 8,598 crore to Rs 6027 crore, a reduction of 30 per cent”, in another tweet he said “With unprecedented increase in coal production by Coal India, import of coal comes down for third successive month”. The main reason for this surge in production is making the bureaucracy efficient, working closely with the states and increasing the transparency in this sector through E-Auction of coal mines.

According to him the transmission sector is going to be the next sunrise industry, he adds that transmission & distribution is a sector for which a country should have to plan for generations, and not only years. Under Goyal’s leadership planning has already begun for the medium and long terms. The transmission and distribution sector is expected to see investments of nearly ₹3 lakh crore over the next four years, this move will greatly help Power Equipment manufacturers such as ABB, Siemens, Alstom T&D, and KEC International and will lead to additional investments in Indian manufacturing. Speaking at the inauguration of the 5th International Exhibition and Conference Gridtech 2015, at Pragati Maidan, the minister said “The Prime Minister’s vision for 24/7 quality power for all depends on the transmission and distribution sector to reach the bottom of the pyramid. With the new technologies we are bringing in, we will now create an ambitious grid programme which will meet the country’s demand”. These efforts are already showing results, a record 20000 circuit km of transmission lines has been added in financial year 2014-15.

Another major achievement of his ministry has been revival of stalled power generation capacity in the last 18 months alone 30000 MW of stalled power generation capacity has been revived. These concentrated efforts have lead towards power deficit situation being improved across the country. At the all India level, the power deficit (difference between power available and power required) shrank 36 per cent to 23 billion units during January-October this year compared with the same period in 2014. As a percentage of power required, the deficit fell from -4 per cent to -2.5 per cent. India’s electricity generation also improved and was up almost 5 per cent this year (during January-October), according to the recent Index of Industrial Production.

A rare combination of a chartered accountant, lawyer and an investment banker, Piyush Goyal is the right choice to head such an important ministry. From Renewable energy to Transmission & Distribution to Coal output, every sector is witnessing unprecedented growth. Needless to say the vision for 24/7 quality power for all looks achievable.

Tags: 2017 UP assembly pollsModi CabinetNDA GovernmentPiyush GoyalRenewable energy
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