Power tariffs should include social costs
Build infrastructure' has become the favourite slogan of India Inc and is seen as the most important action for development. The discussion usually focuses on the massive investment required and the difficulties of providing it, but rarely on the way infrastructure planning is done. Official plans propose increasing the power generation capacity by 60% over the next 5 years and by 600% by 2031. According to the Planning Commission's working group on power, an investment of Rs 9,70,000 crore will be required just for the next five years. These projections are seen as natural for development. But there are several irreconcilable problems with this approach, which are leading to a crisis. The earlier we review our path, the better it is for our Economy and for democracy. Our plans are not accompanied by an assessment of impacts, nor a check on whether they are realistic. We do not estimate the land and water needed to install and run proposed power plants, nor do we check tariff impacts of investments. Even ballpark estimates of the number of people to be displaced are rare even though, potentially, the numbers can be large. For example, a study by the coal ministry estimates that coal mining alone will displace 8.5 lakh people in 20 years. Getting water or land for new power projects is going to be impossible without major social conflicts. Getting fuel will not be any easier. According to current estimates, known Indian coal reserves will be used up in 50 years. In this scenario, Indian energy imports will upset even the international fuel Markets. Three corrections are urgently needed in infrastructure planning. First, we should recognise that social and environmental costs are real and are paid, usually by the poor. These costs should be included in the cost of electricity. Second, the focus should shift from energy consumption to services. Current planning focuses on electricity