Thursday, October 15, 2009

After a long time

How can people become more disciplined, on their own or by control or they can’t be. Yesterday I met a person in BESCOM while working on a project. He looked very much annoyed with society .When we asked the question what BESCOM (Electricity supply company) is doing to bring down transmission and distribution losses and reduce power theft his anger just burst out. He related it to everything starting from bank failures in USA to all the problems with capitalism. He cursed everything from government, politicians to bureaucrats for problems of state electricity boards. But as a firm believer in free markets (Now) , I was almost out of sync with his ideas, I wanted to ask him a lot of questions but respecting his age,experience and passion for his thoughts, I asked very few. The problem with his ideas was that he was supporting something which spoils the tax payer’s money. Why the tax payer’s will pay for the inefficiencies of the SEBs. If SEBs are supplying power at low cost, eventually the tax payers are paying for that and then there are inefficiencies involved with tax collection and administrative expenses of SEBs. Why not directly pay that money for power. Then the question comes what about people who can’t pay high prices for electricity. First there is a need to find out who are people who can’t pay and then we need to target the subsidies to them. Why give free power to every farmer which causes over consumption, instead charge the marginal cost and use that for other development programs and other infrastructure development programs which will help in development of society. According to the person in BESCOM the conductor losses due to poor wiring is very high and government need to work on that , again who will pay for that tax payers, but why can’t SEBs do that by making profits and utilizing that fund instead of going through the tax mechanism. His argument was proper metering will not stop power theft; the question is why it can’t, how private companies are able to do it while SEB’s are not. Is it due to corruption of employees or due to less disciplined society? I think the technology is advanced enough to stop these thefts if it is used properly. My overall argument is no one should try to justify something which has some inherent problems, he was correct in pointing out the problems, but I differ with solutions he was suggesting.