The Goa government which has earlier in the year stated that a power tariff hike is inevitable, has buckled against a calculated Opposition campaign with the cabinet deciding to keep the hike in abeyance and absorb the additional burden of Rs 120 crore. In a strategic political move that will have major financial implications, the government has swiftly moved to insulate itself against an expected public backlash ahead of the elections.
Now, what made the government bear such a financial burden, against the backdrop of a poor economic condition where it desperately needs money? It is obvious that the "free power" outreach by the Aam Aadmi Party has not only shaken the confidence of the government, but has also forced it to rethink. Politically, a tariff hike at this juncture would spell doom for the BJP, especially when the ‘power’ guarantee of Arvind Kejriwal is running full steam in the background.
Apart from the political moves, how significant is the hike in the current scheme of things? Goa has been avoiding power tariff hikes for quite some time, and the financial burden is weighing heavily on the exchequer. In May 2020, the centrally-constituted Joint Electricity Regulatory Commission (JERC), whose job is to rationalize electricity tariff, had recommended a 5.31 per cent hike in power tariff against the State Electricity Department proposal of a 3.48 per cent hike. While citing a Rs 342 crore revenue gap, JERC has cautioned the government against over-reliance on budgetary support while also advising it to be prepared to face repercussions if this arrangement fails.
It is rather intriguing that the government has a burden of Rs 120 crore, while on the other hand defending itself against AAP’s proposal of free 300 units of power per household. If we may recall, Power Minister Nilesh Cabral had slammed the freebies doled out by AAP in Delhi saying that it's not possible in Goa. In a debate with Delhi Power Minister Satyendar Jain, Cabral had argued against putting a burden on the exchequer. How does the government justify its move to bear this loss now? How can a government which was strong defending itself from any free guarantees and claiming that it cannot tinker on those lines suddenly take a major backward leap?
The concessions are coming thick and fast, irrespective of the logic behind them. The power rebate comes close on the heels of Chief Minister Pramod Sawant’s offer of 16,000 litres of free water for every household effective from September 1. The math behind these sops would remain a closely guarded secret because in an election season it is the votes that count above anything else.
Finally, the Chief Minister has a rider to his announcement giving a clear indication that the power tariff hike will not be implemented this year. This means, that the government has only delayed the inevitable. We reiterate that instead of taking such drastic steps to keep the political interest intact, the Electricity Department must work out ways to bring down costs under various heads so that the burden on the common man is reduced in the long run.
