By Yutika Agarwal
Finally aam aadmi, Arvind Kejriwal makes the big hit by taking over the chair from Sheila Dixit with a list of promises made to the National Capital. The question that arises is whether he will be able to do well to the territory and prove it to the public that he really deserves this place and can make it count.
His journey started and what came first was free water; he announced free water supply of up to 667 litres a day per household with certified installed meters along with a hike of 10% in the tariff. It is ironical that it is stated as free water because households using water beyond this limit will now be shelling more money out of their pockets than before. What is required is not free water but availability of water with certified meters, the areas which do not have access to any water supply at all does not benefit from this. The ones who benefit from this scheme are only the people who have access to water supply and use water under the sanctioned limit, however a large plurality of the population lacks access to water or are bulk users.
Followed by free water was a 50% reduction in the electricity tariffs for users using up to 400 units of electricity per month. The users using more than 400 units of electricity will be entitled to pay for the complete usage including the first 400 units of consumption. Kejriwal also announced that three major power distribution companies of Delhi namely BSES Yamuna Power Ltd, BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd be audited immediately. He further added the possibility of revision in tariffs post the audit reports were received.
If the financial statements are to be considered under the subsidized water rate will cost the Delhi Jal Board Rs 160 crores a year and Rs 40 crores for the rest of the current financial; and the reduced electricity rates will cost the government Rs 60 crores for the remaining quarter of the financial year. However, fragmentation of the tariffs by usage show that, DJB would be providing subsidy of Rs28 per KL up to 20 KL per month consumption and would not be able to recover any part of the cost, but would make profit of ~30% for consumption between 20-30 KL and super-profit of ~50% for consumption beyond 30 KL. Additionally, rate increase is expected across-the-board so billing for other two categories of consumers would also be higher so it may be possible that the new tariff structure actually bring additional revenues to DJB.
His actions currently seem heroic to the public but when thought about in depth arise some questions in mind which are currently unanswered. How will these subsidies be funded? Will these schemes benefit the entire Delhi or just parts of it? Are these justified and decisions based on complete study of scenario?
According to me, the increases subsidies and slashed tariffs are gaining popularity which is short lived, it seems inimical to the growth and overall wellbeing of as somewhere these subsidies will be funded by cost cutting and reduced investment on the welfare and infrastructural development of the NCT. These reductions also gives birth to the speculations that these will be funded by higher tax rates. As stated above, what is required is not reduced rates and free supplies but supply of the resources. In terms of both electricity and water, a considerable population does not have access to both and thus these schemes do no good to them. A segment of the population have completely been ignored under these schemes and thus tuning up these schemes are required.
The author is a II-semester student of M.Sc. Economics at TERI University, Vasant Kunj. She graduated in Statistics from Ramjas College, University of Delhi. The interest in subject encouraged her to pursue a masters in Economics. She like sto read, dance and play badminton. She worked as an Associate Analyst in the quality and risk management department in Ernst & Young, GSS, Gurgaon for a span of 8 months post her graduation.