March 29, 2017

Speaking at “UDAY – Transforming Indian Power Sector” in New Delhi.

Thank you Ritu, my colleagues Mr Pujari, Mr Sushil Kumar; Additional Secretary Ms Shalini Prasad; Chairman REC, Joint Secretary, Ministry of Power, Mr Verma, several distinguished Chairmen of PSUs under the charge of Power and Coal, analysts from different companies and banks from across the country, my very dear friends from the media, often have to take a little bit of joke from me but I do hope they take it in the right spirit, and not get disturbed about what I say. I still feel Shreya is not smiling, why is that so Shreya? My dear friends, ladies and gentlemen!

At about 11 o’clock this morning I got a message, you know a lot of people keep sending those messages, unsolicited SMSs to you which said ‘when life is sweet say thank you and celebrate, when life is bitter say thank you and grow.’ And in some sense, when I became a Minister in the Power Department, I didn’t know whether to celebrate, say thank you, or be worried about the future. But one thing I can assure you, we did not allow my inexperience in this sector to get in the way of my ambition. And that ambition was well set out by honorable Prime Minister Shri Narendra Modi. He is committed and his government has resolved that we will ensure the entire nation and the people of this country, the 120 crore people of this country, get assured, quality, affordable, reliable, 24/7 power. Every citizen of this country needs electricity deserves to get electricity in his home, in his office, in his business, in his farm, and that’s a commitment that we have made to the people of India. That’s a commitment that all my colleagues and I stand before you to achieve, and we have no hesitation in reaffirming our commitment to make sure that the entire country enjoys the fruit of development, gets electricity at their home, at their workplace, quality power, 24/7 power, power for all.

In fact, UDAY has been one of the most comprehensive measures ever planned or created or crafted for reform for a better power sector in the country. I was just trying to describe it in juxtaposition to federalism. The honorable Finance Minister has just now, about an hour ago, tabled in the Lok Sabha the first shining example of collaborative federalism where a federal institution in the form of the GST Council is taking shape, is getting legal sanctity, is getting powers to operate. And it’s a shining example of this government’s commitment to federalism. The fact that both the centre and the states have let go what they had as their fiefdom, what was their power and allowed a new institution, like the GST Council, to come into being which will work in the spirit of consensus, in the spirit of togetherness, in the spirit of one nation. And in some sense, UDAY also takes pride in being a shining example. And if I may draw on the letter ‘C’, it’s a classic case of Comprehensive, Cooperative, Collaborative, Competitive, Consensual and Compassionate federalism. And every one of those elements that I have mentioned has resonance in UDAY.

Compassion because UDAY equally finds it important to reach out to the 5 crore families or whatever number are now left – 4 crore 76 lakhs – as per my last viewing of the GARV app. The fact that these people deserve to get power, it is a bounden duty of all of us to ensure that every family gets power, is also a element of UDAY, it’s the compassion that we should have as a nation.

Competitive federalism because states are competing in the transparent manner to get the best that is available, whether it’s coal linkages, coal auctions, coal blocks; whether it is availability of power through DEEP portal, through Vidyut Pravah, the data and through that the purchase of power through DEEP portal in a competitive manner so that every state can compete to make their power cost cheap or low.

Consensual approach because the entire UDAY programme was voluntary. And I must compliment the team which has persistently worked with the states, and today we have celebrated the Silver Jubilee – 26 states after today’s signing becoming a part of UDAY. Odisha, because it has only private DISCOMs, does not significantly benefit though I think we could talk to them and have them come in for whatever benefit we can give even through the private DISCOMs for the people of the state to enjoy. Nagaland is probably in dialogue, and Mizoram and Nagaland are in dialogue, possibly, they will also join up, and not one of them under any pressure to join. The entire signing of UDAY – the joining, the agreements – are through a consensual approach, through a collaborative approach, to draw up the entire programme where there is no compulsion on both sides.

We have worked through an approach of cooperation, understanding the needs of the state, understanding what is good for the people of the state, what is in the interest of the people of the state, what is in national interest. And working through this approach of collaboration, we have been able to bring forth a mechanism, a framework, a series of measures, which I have full confidence and I can commit will change the entire scenario in the power sector. And I do hope that in the process, our effort to leave behind a better power sector, far better power sector than the one we inherited will be successful.

In fact, success is always the sum of small efforts. And through UDAY, we have not tried to say that we have done something which is earth-shattering or what most analysts like to call big bang. That’s not the effort at all. It’s the attention to small detail. It’s the attention to what can save even 5 crore and 10 crore for a DISCOM. And I personally believe, as does my team, that our success will come from a series of small initiatives, which put together will become a game changing revolution in the power sector.

In fact, Robert Collier had said, ‘success is the sum of small efforts repeated day in and day out.’ And that’s what monitoring of UDAY is all about. I remember when we first brought out UDAY and people were asking what’s different in this from the past amongst many things. And I think this is something which has never been attempted in the past in terms of the fact that without giving even a single rupee we have been able to voluntarily get all the states onboard to discipline themselves, enjoy the fruits of whatever the centre has to offer, work together with the centre, the states, the public sector undertakings and the private sector, and the consumer organizations to do good for their people, self-discipline themselves. We will self-discipline our own working through policy measures, through improvements in the framework, through ease of doing business, through transparency in all that we do. The public sector undertakings will try to handhold and help the states perform better.

And all of us together will stand accountable to the people of the nation. And an integral part of this UDAY, different from the past, I had said on many occasions, is our deep focus on monitoring and accountability. Today’s interaction, in some sense, is also a part of that effort to present a report card before you. The fact that we have put in so many mobile apps, and so much data is now available transparently for the media, for all of you, to keep a check on our work, to criticize us when we go wrong, to tell us where we could do something better, to guide and help us navigate this entire story more efficiently, more effectively, is a part where all of us can work together. The media, in fact, has an even bigger responsibility being the fourth pillar of democracy to keep the executive, to keep the political establishment, all of us in check. And I must share with you, on more occasion than one, some of the media reports have been like an eye-opener, have helped me do my job even better, helped me understand certain things I never knew about.

So this collaborative approach where all of us are working together as a team is to my mind going to be the hallmark of the success of UDAY. In fact, Prime Minister Modi had very aptly described it – Federalism is no longer the fault line of centre-state relations, but the definition of a new partnership of Team India. And it is in that spirit of partnership that UDAY was formulated. In fact, UDAY was formulated only through consensus, through discussions and I think over a thousand hours or maybe a few thousand hours of consultations with different stakeholders and people who knew better than me, certainly much better than me.

And, in that sense, this cooperation has helped us reach so far. We still have miles to go. We still have a lot to do. All of us are committed to meeting the expectations of the people of India. But we do believe that the success to any programme can only happen when there is a strategy in place. It’s very critical to have a conscious and planned strategy in place when you are trying to do some significant, game changing and impactful improvement in your work.

The famous futurist Alvin Toffler had once said, ‘if you do not develop a strategy of your own, you become part of someone else’s strategy, and you don’t know whether that strategy is really good for you.’ Which is why UDAY, in some sense, draws up a strategy where all stakeholders have protected their interest, what is in their interest and come up with a common framework, yet that common framework allows enough flexibility to tailor-make solutions to different states’ requirements. So it’s not a one-size-fits-all. It’s a broad framework within which each state is developing its own strategy, which we are trying to validate through examples, through experience, through what happens in other states. So there is a lot of experience-sharing amongst states when we have our Power Ministers’ Conference, when we have our monthly monitoring of what’s happening in the power sector through Secretaries and other officials of each state. So the monitoring is something which is not left to chance. It’s not left to an annual or a biannual or a bi-yearly exercise also. It’s a conscious monitoring, happening every month and within that month also happening day by day. And I myself have reviewed three states in the last 2 days.

Yesterday, I had an extensive review of Manipur, a state which has recently seen a change of government. Yesterday, I had a review with the honorable Power Minister, Manipur, of course, the Power Minister and the Chief Minister with all their officials came. Rajasthan Power Minister, and the officials of Rajasthan, including the Finance department officials, so our monitoring is not just between power sector and our power sector, or between Minister and Minister. I talked to the honorable Chief Minister at length on two occasions in the last three days. She deputed her Minister, officials, including officials from the finance department, we had an extensive review. In fact, I didn’t have lunch yesterday in that process.

Day before yesterday, we spent what? 3 and a half hours, almost 4 hours with the Power Minister, the new Power Minister of the new and dynamic government, and really sensitive government wanting to do something, I can say earth-shattering in Uttar Pradesh. The passion with which Yogi Adityanathji, the honorable Chief Minister of Uttar Pradesh has talked to me almost 6 times in the last one week or 8 days alone, and the number of times Shrikant Sharma, the new Energy Minister of Uttar Pradesh, has been on line with me followed with our meeting day before yesterday and two more conversations after that also.

And threadbare, every element of what can be done, what can be done to change the way things have happened in the past so that Uttar Pradesh, the people of Uttar Pradesh and those 1.8 crore nearly families, or 8-9 crore people of Uttar Pradesh who still don’t have electric connection can get benefit and quickly at that. So we are working to a strategy. We are working to a plan. We have a clear and visionary goal chartered out by the honorable Prime Minister. The team has drawn up the roadmap to achieve that vision and our mission. All the states, all the government companies, and if I may say, even the people of India are conspiring to help us achieve that goal.

And, I have said it before but I won’t once again borrow from Shah Rukh Khan on that famous dialogue, but clearly, and I have said it before, when you really desire something very passionately, when you want something to happen and you put your heart and blood and soul into it, then even the Universe conspires to help you make it happen. And that’s what this team sitting here, and some of them sitting here, and I think the people of India expect out of us, and which we are committed to deliver, which we are working day and night to deliver and we assure you will deliver. There’s no ifs and buts about it. We will deliver. We will make it happen. We will do it right. We will do it efficiently. We will do the right things at the right time and we will do it right.

Of course, today is also very interesting that three more states – Arunachal, Tripura and Kerala – have joined, which also will explain to you that this is something which cuts across political ideologies. It’s not a question of which party, which government rules in a particular state. Everybody wants to serve the people of India, their state, their area of influence. So I am really delighted that everybody is becoming a part of this mission. I am delighted to see your app, your portal. I do hope more and more states give you data, real time basis. Please handhold them and help them wherever they need any support to sanitize their data and give accurate data into the apps and websites. Because till we monitor and hold people accountable for the work that each one of us is supposed to do right from me downwards, I think we will never get success. Howsoever good our strategy may be, unless we monitor and we hold people accountable for it, even a beautiful strategy can fail.

So I am sure all the effort that all of you are doing, I am not getting into too details. I think the presentations were quite composite, quite comprehensive. The big picture is that we are trying to bring in efficiency into the entire value chain and we can’t expect the people of India to pay for the inefficiencies of the value chain. The effort through UDAY is to focus on setting things right, bringing in highest levels of efficiency and through that ensuring that everybody gets a chance to enjoy the fruits of development at an affordable price right through the life. And that we leave behind a framework which serves the nation for years and years to come and does not something which is a short term gain, but certainly becomes the engine or the fulcrum of the growth and development and a brighter future for the people of India.

I would like to thank REC and all the officials who have really worked to make UDAY a success. I would like to thank all the other ministries who have worked together with us, be it the Ministry of Coal, be it the Ministry of New and Renewable Energy, be it the Finance Ministry, Petroleum Ministry. It’s been an effort where everybody has chipped in – the Environment Ministry in a very big way. It’s been a collective effort of everybody working together to achieve a common goal. And I can assure you that we shall continue to work together in the spirit of cooperation, breaking the silos within ministries or departments, breaking the silos between the centre and the state, breaking the silos between the public sector and private sector. But working together with only one objective and that one and only one objective is to serve the people of India.

Thank you very much.


Q. Sir, this is …. from Axis Capital. Could you highlight the progress on scrapping up the old plants and repowering them, and if you could address your question on the Carrot and the Stick approach, it will be very grateful?
A. We have already announced that NTPC is going to phase out 11,000 MW of their old plants and we are talking with the states to see how quickly some of them could also look at replacing. Yesterday I discussed with Rajasthan, for example, they are considering phasing out some of the old and inefficient plants. UP is thinking of phasing out, so we are in dialogue with all the states. But it certainly is a decision the state has a right to take.

Q. Sir, this is Amish from Bank of America Merrill Lynch. The coal swap reform that has been initiated by the government, the coal swap reform, that’s a brilliant reform but if you can share some experiences of any state that has shown some willingness to go for that, that will be really helpful?
A. Gujarat has been the one who has benefited the maximum because Prime Minister Modi has been talking of it right from the time he was Chief Minister. I think on file there must be tons of letters that he has been writing, but somehow that decision was not been taken in the past. But now several states are enjoying the benefit of that, Uttar Pradesh has also got some benefit of it and day before also they have asked for some more swaps. Gujarat has asked for one more swap, I forgot one more review meeting which happened on Sunday evening with the Gujarat Power Minister and the Power Secretary of Gujarat. So we have had four meetings in the last, today is what? Wednesday, so 4 days and 4 states I have reviewed in the last …

Q. Sir I particularly meant the swap of coal with power through the e-auction process that you have initiated recently?
A. No, discuss with the Coal Secretary, it’s not a macro issue. At lunch you can discuss.

Q. Sir this is Shukdeep Mitra from Real Financial, sir just wanted to understand that in every individual MoU on under UDAY, we have also had targets of tariff hikes which was supposed to be one of the lower bearing fruits. However on that front we have seen filings but, you know, any progress…
A. Well, first of all, I hope you are all aware that all the MoUs of UDAY are also available on the website. So there is nothing confidential. In the old days, it was all in our files and you had no clue what’s going to happen, now all of that is in public domain, point 1. Point 2 – the tariff increase is an indicative process, if they improve their efficiencies better then they may not need to increase the tariff. So tariff is not something that I can or they can decide bilaterally, it’s the regulator who decides the tariff and that I cannot take away from the regulator. But the commitment of the states in the MoU is that they will file their tariff petitions regularly. They have indicated what they expect the tariff rise to be, what they require the tariff rise to be. But then there are some states who have informed us they don’t need to tariff hike. They are able to do it better through efficiencies. So I think that’s a decision for the state and the DISCOM to make, should they not want to do a tariff hike but increase the subsidy out of their budget, they are free to do that, I have no problem with that.

So I am the last fellow to suggest to anybody to do a tariff hike. To my mind, we should now start looking at tariff reductions in this country and better efficiency to make up for the shortfall.

Q. Manish Goyal from Enam Holdings. Just a question on like, what we are observing is unwillingness of the states to sign the PPAs, like nearly 23,000 MW of capacities are stranded. So if you can please comment on that?
A. You know, there is no unwillingness on the part of the states to sign PPAs. They already have sufficient PPAs to meet their requirements. Sadly, in the past the planning of power capacity, viz-a-viz the demand turns out to be all either wrong or not even taken care of properly. We have, in fact, brought out a far more robust electricity demand statistic and data, which is available now through the CEA website which reflects what a more realistic demand pattern will be. And it also takes into account our thrust to energy efficiency. So we are trying to reduce the waste of energy. My next programme, and we are launching it in Uttar Pradesh soon, is going to be about energy efficient pump replacing the, you know, age-old 20-30-50 year old pumps, which our farmers are using which guzzle electricity and actually cost the nation dear. Which we should replace with modern energy efficient pumps, save that electricity, reduce the bill of the farmer, reduce the waste in the whole system.

So just because there is a additional capacity which came up in an unplanned manner or in an excess manner doesn’t mean that states have to necessarily sign PPAs. Having said that, with the Make in India programme getting thrust, with the IIPs showing improvement, with more and more people wanting to come and invest, FDI is at a record high. The honorable Finance Minister has recently mentioned some very significant steps that are being taken to resolve the NPAs in different sector. We are also looking at the NPAs in the power sector along with the banks to see what we can do to reduce the stress in the power sector. All of us are working together to see how we can give a further boost to manufacturing and demand in the country and then logically there will, obviously, be more PPAs coming in the marketplace.

Q. Sir, this is Abhishek Poori from Deutsche Bank, sir one question on the draft, the National Electricity Plan actually talks about the PLF of power plants going down from 60 to 48% by 2022, whereas we are looking at Make In India, the industrial growth etc.
A. I think he explained that PLF issue, you either missed that slide or you didn’t understand. Please talk to Mr Verma. And that 42% you are picking up one scenario, there are 50 scenarios in that.

Q. I think that’s the base case scenario that she has painted.
A. Yeah, you want to take the worst case, it’s your choice. Yeah, but you can choose to be a pessimist or an optimist. I am a born optimist. So I look at top of the line, you look at the bottom. You will see what happens, but I can assure you, I will be successful.

I hope I am not being rude. It’s just that I want to give my sense of optimism and confidence in my country and my people. And we will achieve not that 42 but we will achieve the 75% or whatever is the top of the line.

Thank You.


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