Salient points of the press conference of BJP National Spokesperson Shri Gopal Krishna Agarwal

 

 

Salient points of press conference of BJP National Spokesperson Shri Gopal Krishna Agarwal

 

False promises and Fraud in the name of social welfare by the opposition parties

 

National spokesperson of Bharatiya Janata Party, Shri Gopal Krishna Agarwal, exposed the fraud of CM Arvind Kejriwal's populism in providing free electricity in a press conference held at the Central Office today. Sh. Agarwal said that Arvind Kejriwal's government is cheating the people of Delhi in the name of providing free electricity because the companies providing free electricity will recover about Rs 20 thousand crores from the people of Delhi in future. This amount is going to increase by about Rs 5 thousand crores every year. In future, the people of Delhi will have to pay for electricity at much higher prices for current consumption.

 

Sh. Agarwal said that by the financial year 2021-22, the regulatory assets for electricity distribution in Delhi was Rs 18,578 crore and the annual interest amount accruing on it will be approximately Rs 1500 crore. The subsidy amount given by the Kejriwal government for electricity is being given to private distribution companies instead of transferring it directly to the public. In the year 2018, LG of Delhi had said that audit should be done through CAG but Kejriwal government has refused. Is Kejriwal government refusal to get discoms audited by CAG because of corruption?

 

 

1.      Aam Aadmi Party (AAP)’s, one leader after another is getting exposed for their misdeed - whether it is liquorgate, mohalla clinics or money laundering, they are facing trial and are in jail.

 

2.      Today we expose another of their misdeeds. Providing subsidised electricity creating Regulatory Assets, is another example of a regulatory mechanism being misused to defraud the public and the exchequer by AAP Government in Delhi. Earlier governments used loan restructuring and ever greening for bank frauds.

 

3.      People of the country should be well aware of the false promises and fraud played out by the opposition parties in the name of social welfare.

 

4.       It is not without reason that is 2014 India was in the category of fragile five economies of the world, the reasons being – corruption, leakages, nepotism and financial indiscipline to name few.

 

5.       Poor policies since independence led to this fragile state of the economy. Welfare in the name of socialism was nothing more than personal gratification of the few.

 

6.      And it is not without efforts that India is now the fastest growing economy of the world and is the fifth largest economy. PM Modi over the last 9 years has worked overtime to create an ecosystem of transparency, good governance, targeted and leakage proof delivery through use of technology, equality of opportunity, fighting nepotism in such diverse field as politics, bureaucracy and even sports.

 

7.      Economic power requires robust reforms, fiscal responsibility, sound macroeconomic parameters, ease of doing business, ease of living etc. BJP-led governments have a positive agenda and a clear roadmap to achieve its goals. Therefore BJP is getting support of all the people across the country.

 

8.      Opposition has no roadmap or agenda and therefore in search of relevance and revival is resorting to unethical and irrational promises without any serious intent to implement, trying to make fool of the people.

 

9.      One Recent Example: Karnataka: Congress Government diverting funds to the tune of Rs. 40,000/- crore from developmental projects for their poll promises. The Deputy Chief Minister of that State is on record saying that the State will have no funds for development expenditure because the funds will go to fulfil poll promises.

 

10.  Diversion of limited state resources for buying votes and for the purpose of appeasement of certain sections of the society, bodes ill for the country. False promises and fraud on the fiscal status of the government by resorting to financial jugglery have become routine for opposition.

 

11.  The State of Delhi is a classic case where, under recovery on the supply of electricity is leading to a creation of Regulatory Assets. We all know that the electricity distribution in the city was privatized long back. These private companies are not able to recover costs including fixed rate of return on capital employed. This under recovered amount constitutes ‘Regulatory assets’ in the balance sheets of these private distribution companies. Since these amounts, which now range in tens of thousands of crores remain recoverable assets in the balance sheet, future consumers of electricity in Delhi would end up paying for electricity consumed today.

 

12.  Clause 5.11(h)(4) of National Tariff Policy, 2016 states that future consumers should not be burdened with past costs.

 

13.  The facility of a regulatory asset has been provided by Electricity Regulatory Commissions to limit tariff impact in a particular year and should be done only as a very rare exception in case of natural calamity or force majeure conditions.

 

14.  DERC determines and regulates the private Discoms in Delhi. It says that the recovery of outstanding under recovered amounts called Regulatory Asset, along with carrying cost of these assets should be time bound and within a period not exceeding seven years. There are three Discoms in Delhi. BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd and Tata Power Delhi Distribution Ltd.

 

15.  In case of BSES Rajdhani Power Limited’s, responsible for distribution of electricity in Delhi, the calculation of Average Billing Rate (ABR) and Average Cost of Supply (ACoS) shows that ACoS as per BPR, 2023 is Rs. 9.9 per unit whereas the ABR at current tariff is Rs. 7.05 per unit. Therefore despite continuous yearly tariff determination exercises undertaken by DERC, there remains a huge unrecovered amount (Regulatory Assets). The total difference between Aggregate Revenue Requirement (ARR) and power purchase cost till FY 2021-22 is Rs. 8191 crores. The same for BSES Yamuna Power Limited is Rs. 5362 crore and for Tata Power Delhi Distribution Limited it is Rs. 5021 crores. The total figure for FY 2021-22 comes to Rs. 18,578 crore. If we conservatively assume the carrying cost for this amount to be 8% per annum, the annual interest payable to the distribution companies would come to around Rs. 1,486 crore. This interest burden will be payable by the electricity consumers of Delhi.

 

16.  It must be kept in mind that the Delhi State government takes pride in the fact that electricity rates in Delhi have not been increased in the last 8 years. It is utterly dishonest of the AAP government to claim so because the Regulatory Assets of the power distribution companies have ballooned during this period and it’s the people of Delhi who will have to pay it eventually and that too with interest that is being accrued at the rate of Rs. 1,500 crore annually. AAP government has allotted Rs. 3,250 crore in the budget for the year 2023-24 to Discoms as subsidy for consumers. That amount will go towards providing free electricity up to 200 units per connection and 50 percent subsidy for consumption up to 400 units. And this amount is incorporated in recovered amount. Thus the Regulatory Assets will not be affected (reduced) by this allocation.

 

17.  There are other issues of Delhi government transferring subsidy amount to the Discoms instead of transferring it to the consumers (Direct Benefit Transfer). Transferring such big amounts to companies is prone to corruption, continuous refusal of AAP government to subject Discoms to audit by CAG is a concern.

 

18.  There are several other examples from the past of UPA government

 

a) Issuance of oil bonds to the oil marketing companies to the tune of Rs. 1.25 lakh crore during UPA.

b) Out of budget borrowing to the tune of Rs. 2 lakh crore by the Food Corporation of India and not accounting for it in the central budget.

 

19.   I would also quote “Milton Friedman who had famously said that there is no such thing as a free lunch.” What opposition parties are promising in terms of transfers to voters as free will come at a cost in the long term.   

 

20.  Bharatiya Janata Party, under Narendra Modi ji is working relentlessly to provide fiscally prudent and responsible social welfare schemes and expose false and fraudulent promises of the opposition. We believe in empowerment and not entitlement and the difference is evident in sound current macro-economic fundamental like GDP growth, fiscal deficit, inflation, foreign exchange reserve etc.

 

21.  Whether it’s taking step to empower women or the subject of MSP for farmers, Hon’ble Prime Minister Sh. Narendra Modi is concerned for all.  The MSP for six rabi crops and the dearness allowance for Central Govt Employee has been hiked yesterday. We thank Prime Minister Narendra Modi for these steps.

 

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