Vol. 10 · pages 246–250

229 POST-WAR ELECTRIC POWER DEVELOPMENT to this because it is necessary you should know what has happened in the interval and also to show that the Government of India has been pursuing the matter in all earnestness and with all speed. The Triple Programme There is another important development in electrical policy to which I would like to draw the attention of all of you here. You will recall that at the last meeting of the Policy Committee, Mr. Collins, on behalf of the Bombay Government, made certain references to the contemplated introduction of the “Grid” system in the Bombay Presidency. During the last year, we in the Government of India have given a great deal of thought to the regional as distinguished from the local development of electricity in different parts of this country. We have felt more and more that if the services offered by electricity are to be brought to the door of producers as well as the consumers at the cheapest possible rates compatible with efficiency, we may have to follow albeit cautiously and gradually, the triple programme on which the Central Electricity Board in the U.K. have worked from the very beginning, viz. :— (a) The creation of large-scale power stations located in the main industrial areas under the control of public supply undertakings ; (b) the construction of main transmission system (with smaller secondary lines attached to it for tapping agricultural and other outlying areas) so that the entire region to be developed by the main system can be held in a power ring or a series of power rings radiating out from the large scale power stations ; and (c) standardisation of frequency as far as possible within the region to be developed by the power system. This triple programme constitutes the foundation of the “Grid” system, as we know it, to be operating in the U. K. since 1926 and it is my hope that if such a scheme of regional development is adopted in this country, we may before long bring the great boon of cheap electricity service to the door of everyone, high or low. You may be interested to know that when the “Grid” system on a large scale was first contemplated in the U. K. it was estimated that by 1940-41 the national production of electricity would reach the

230 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES colossal figure of 25,000 million units and the working cost of electricity would by that date fall from 9.4d, as recorded in 1925-26, to less than 4d. per unit, while the large industrial consumer would be able to obtain his power requirements at ½d. Items On Agenda I will now turn to the Agenda for our meeting to-day. As you will see, there are altogether four items on the Agenda. Item 4 places before you for your consideration two schemes, one for the Technical Power Board and the other for sending Indians to foreign countries for training in electricity. Neither is a controversial subject. I will not therefore take your lime in dwelling upon them. Item 2 on the Agenda is unfortunately not quite so uncontroversial as item 4. Item 2 relates to the question of applying to electrical undertakings certain accounting principles for ascertaining their income, expenditure and profits. This item is not as controversial as it appears. The issue raised by this item covers two questions and not one, and the controversy would be very much narrowed if they were considered separately. The first question is whether the dividend of an electricity supply undertaking should or should not be related to the charges for consumption of electricity. The second question is how to determine reasonable dividend. On the first question, I venture to say, there can be very little dispute. Electricity is to be a prime necessity of the people both for production and consumption. The price of such a prime necessity cannot therefore be at the will of the suplier. The whole industrial future of India will be put in great jeopardy if India could not ensure cheap and abundant supply of electricity. The necessity of correlating dividends to charges is therefore paramount. If this is granted, the necessity of enforcing rules of accounting which will give the undertaking a reasonable return but no more and choke all holes for concealed profits cannot be disputed. Principles Of Accountancy The issue then becomes a secondary one. In pressing for enunciating principles of accountancy we are not introducing any revolutionary idea. We are following the lines laid down in British Legislation on

231 POST-WAR ELECTRIC POWER DEVELOPMENT Electricity contained in the London Electricity Act of 1925 and the Electricity Supply Act of 1926. The Electrical Commissioner with the Government of India has drawn up a Memorandum in which he has proposed a set of such accountancy principles for being applied to electricity undertakings. His Memorandum was circulated to the Provincial Governments and to Electrical Undertakings for their opinions. There has been unfortunately some divergence of opinion. As a means of bridging the gulf, the Government of India proposes to appoint an Advisory Board to advise on principles which may be just and proper. I hope you will regard this solution as a satisfactory one. There remain items 1 and 3 of the Agenda. They are indeed the most. important items of our Agenda and you will bear with me if I take some of your time to deal with them. With regard to item 1, it might be well to refresh your memory by telling you how the position stood at the last meeting of the Policy Committee. At the close of the discussion of the items on the Agenda the Policy Committee desired that the Labour Department should draft a Resolution embodying the measure of agreement reached and that it should be placed for discussion at a subsequent meeting of the Policy Committee. A draft Resolution was accordingly drawn up which is in the following terms :— “That this meeting recomends that the further development of electricity supply in India be actively pursued as a State or quasi-State enterprise and that steps be taken to eradicate any factors that retard the healthy growth of electrical development in the Provincial, State or Local authority—owned undertaking as well as the commercially owned undertakings.” It was felt that the draft Resolution was not very clear. The Resolution spoke of further development. It said nothing about the undertakings that have already come into existence. The Resolution spoke of the necessity of controlling factors likely to hamper or retard the healthy growth of electrical development but did not specify what the factors were. It was therefore felt desirable that the Resolution should be again carefully considered in the Policy Committee to clear up elements of doubts. This is how item 1 comes to be what it is.

232 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES State Control And Ownership The discussion at the last Policy Committee meeting seemed to indicate clearly the intention that electrical supply enterprise in areas where there is none at present should be pursued as a State or a quasi-State enterprise ; but there remained an element of doubt as to the extent to which the State should come in those areas in which electrical undertakings were already functioning. For instance, is it advisable that the State or other authority should as a general rule exercise an option to take over an undertaking whenever under the terms of an individual licence such option arose ? And is it advisable that the State should exercise control over existing privately—owned undertakings for the purpose of securing bulk supply for regional development or control of generation ? There may be cases in which in order to secure suitable regional development bulk supply from some other undertaking should be given to some existing undertaking and that it may be that the manner in which an existing undertaking operates and expands may have to be brought into line with general schemes for regional development. We wish, therefore, in this discussion to get clarification not only as to the extent to which State ownership should come in but also as to the extent to which the State should control where State ownership cannot immediately become operative. Jevon’s Economic Criteria The issue between State enterprise and private enterprise has ever been a matter of controversy. This controversy is now resounding in India in full blast since we have started the project of planned economy. Old Jevons in his tract on State in relation to Industry, attempted to formulate certain economic criteria by which the line between State enterprise and private enterprise can be drawn and which have been the gospel of the opponents of State enterprise. According to Jevons, there were four criteria which ear-marked an industry for State ownership. They were (1) small capital account: (2) routine operations : (3) the co-ordination of several services such as Posts, Telegraphs and Telephone and (4) the sufficiency of a single all-embracing plant as in the case of water and gas supply. The followers of Jevons in this country propose to add some more criteria, the object of which is to restrict the field of State enterprise

233 POST-WAR ELECTRIC POWER DEVELOPMENT except in one case, viz., they are prepared to enlarge the field by allowing the State free field in such cases which could not be profitable for private enterprise to undertake. The controversy may have had some solid basis when private enterprise was a fact. But to-day private enterprise is only a phase. There is nothing private in an economic order when industry is carried on by huge Public Joint Stock Companies. There is nothing of individual enterprise in an economic order where the slogan of a business firm is caution and not adventure and where the prime consideration is to stabilise profits by seeking to maintain in an orderly permanence existing economic conditions. It is unnecessary for me to enter into this controversy. For there are very few opponents of State ownership and State control who do not make an exception in the case of electricity. Item 3 raises the question as to who should exercise the option when it falls due by reason of the termination of the licence issued to an electrical undertaking for the supply of electricity. The matter of purchasing an electrical undertaking. This question is now regulated by the provisions of Section 7 of the Indian Electricity Act. According to this section, the authority to exercise the option to purchase vests in the first place with a Local Authority and where the Local Authority does not elect to exercise the option it passes to the Provincial Government. The question raised by item 3 on the Agenda is whether it is not desirable that option should also be given to the Central Government and, if so, at what stage and under what conditions. It is proposed that the Central Government should also have an option to purchase. Having regard to the fact that electricity is a public utility, there ought to be no difficulty in vesting the Central Government with such an authority. Provincial Or Central Control ? Unfortunately, there seems to be some reluctance to accept this principle. Planning in India has been confronted with two issues, the issue of State versus Private enterprise and the issue of Provincial or Central control. With both issues we are all quite familiar and item 3 deals mainly with the second issue. To those who believe in State enterprise it should be a matter of small consideration whether the enterprise should be Provincial or Central and little or no objection