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Nagaland incurs huge loss in power sector

power naga

Dimapur, February 4: Nagaland is incurring huge loss in the power sector and needs to take appropriate actions at the earliest so that the State power sector can work on sound commercial and economic principles.

According to the XV Finance Commission report, the total revenue receipt of the State Power Department was Rs 458.3 crore from 2010-2011 to 2014-15, where as the expenditure during the period was Rs 1487.8 crore, thereby incurring a loss of Rs 1,029.5 crore.
The report noted that data on AT&C losses and ACS-ARR gap (average cost of supply-average revenue realized) is not reported by the State Government on the UDAY portal.
“The State has reported high AT&C losses in its memorandum. Receipt-Expenditure gap in the power sector is also widening,” it noted.
The Aggregate Technical and Commercial Losses (AT&C) losses is a combination of energy loss (technical loss + theft + inefficiency in billing) and commercial loss (default in payment + inefficiency in collection).
The FC recommended measures like pre-paid metering/smart metering, feeder segregation, and drive against power theft should be taken up immediately to reduce the burden of losses and protect against fiscal risk.
On the proposal for corporatization and unbundling of the power sector, the FC said it is still under examination.
The report also observed that the Government of Nagaland signed the UDAY agreement for operational efficiencies only.
‘Social Indicators’
The report said Nagaland’s per capita revenue expenditure per annum on education (Rs 8,336) and health (Rs 2,933) are higher than North East and Himalayan States (NEHS) average (Rs 5,970 and Rs 1,987 respectively) in 2018-19.
This prioritization of social expenditure reflects in the key human development indicators of Nagaland, which are better than national averages (barring institutional deliveries which is 32.8% compared to national average of 78.9%).
The FC said better health and education of the population indicates scope for service sector development in the State.
On tourism, the report said natural and cultural heritage of Nagaland may be leveraged to promote tourism.
Observing that the State has already started festivals and events like Hornbill, Sekrenyi and Aoleang, which attract both domestic and international tourists, it recommended that eo-tourism may be encouraged through incentives or PPP mode.
Homestays, individual as well as community-based, may be promoted as viable alternate source of income. The State Government may take active measures to link homestays with e-commerce players, it suggested.

Power dept

‘Local Bodies’
On local bodies, the report said it has low own resources, as the village councils, municipal councils and town councils have negligible resources.
The State needs to explore options like user charges, parking fees, property tax, market fee, etc., to improve resources of local bodies and establish a Property Tax Board (PTB) at the earliest, the FC recommended.

On municipal elections, the FC said it has not been held since 2004-05 because the Constitutional provision regarding the reservation of 33% seats for women is under litigation in the State.
The State needs to immediately resolve the issue of reservation and conduct elections at the earliest to allow local bodies to function democratically, it said. (Page News Service)