Arvind Kejriwal's decision to implement two key poll promises on power and water in Delhi may have endeared him to the masses. But it has also raised questions not just about the feasibility, but also the very rationality of the policies. Editorials and opinion piece writers in leading financial dailies have criticized the decisions, saying they were likely to do more harm than good.
Here's a summation of the views:
The plan for nil water charges for up to 667 litres per day would be perverse incentive for meter tampering and exaggerated claims of leakage in the system. As for power tariffs, it would make the rates probably the cheapest nationally, but also among the most subsidised. Worse, the fiat would discourage badly-needed power investments, including in last-mile distribution. (Economic Times)
Also Read: Delhi govt orders CAG audit of pvt power companies
Delhi already has the country's highest per capita consumption of water. The problem is not consumption or price; it is the distribution system. (In electricity) The AAP has not waited for an audit, and declared a substantial subsidy. Does that not mean any audit is meaningless, since the government has already made up its mind as to what it will find - that bills are inflated? (Business Standard)
Free supply of any good, including water, to consumers will result in inefficiency. There is ample evidence to prove from different states that free supply of electricity to farm sector over the years has not only increased the exploitation of groundwater but also created financial mess in many State electricity boards. (A Narayanamoorthy in Hindu Business Line)
These policies will not benefit the really poor and will blow a neat hole in the finances of the Delhi state government. Kejriwal means well. He should use tax revenues to build rather than to subsidize. (Mint)
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