June , 2018
Power theft hits India’s GDP hard
15:21 pm

Aritra Mitra

In 2013, a documentary film, Katiyabaaz, dealt with the issue of power theft in India. Loha Singh, the protagonist of the film steals and provides illegal connections for living in Kanpur. “Why should I be scared of the government when electricity doesn’t scare me?” asks the protagonist.

Kanpur once prided itself on being the ‘Manchester of the East’ for its thriving factories. Today, it is a derelict city, teeming with people and battling with power shortages. Kanpur residents endure up to 16 hours of power cuts a day as electricity wires hang precariously over congested roads. The city is notorious for power theft. Political apathy and administrative indifference contribute largely to it.

Power loss in India

The losses in power sector can be classified into two categories – technical and non-technical. Technical losses refer to losses in transmission from power plants to end consumers. This problem is unavoidable. On the other hand, non-technical losses are hard to understand. Such losses are essentially monetary or commercial losses. They arise when distribution companies supply electricity without getting paid. These non-technical losses occur because of non-paying customers.

Reasons behind power theft

There are mainly two ways by which power thefts occur in India and they are meter frauds (manipulating the electricity usage data) and unmetered usage (where power is enjoyed for free). Political interference can also be held largely responsible for power theft in India. It has been observed that in many parts of the country, power theft increases during elections. Farmers occupy a major chunk of the country’s electorate and political leaders often promise them free or subsidised electricity. Moreover, most of the overhead electrical wires in India are still not insulated and that invites illegal hook-ups.

Power theft in cities

Power theft is not simply a rural phenomenon. According to a report in The Times of India, urban slums are sites of intensive power thefts. In 2002, the Calcutta Electric Supply Corporation (CESC) sources had revealed that much of the electricity theft in Kolkata was detected in posh areas. A raid conducted then by the CESC exposed that most of the power stolen by domestic consumers in Kolkata occurred in upmarket residential areas like Park Street, Shakespeare Sarani, Alipore and New Alipore. However, the situation has improved with the implementation of strong anti-electricity theft measures that include imprisonment up to five years and fine up to Rs. 50,000.

Industrial power theft: Case Studies

In December 2017, the Jharkhand state government had set up a special investigation team to probe power thefts and irregularities. According to a source in the state’s energy department, losses of over Rs. 3000 crore were being incurred by the state government due to power theft. A Jharkhand Bijli Vitran Nigam Limited (JBVNL) source said, “Power thefts by industrial units have been rampant despite raids by the anti-theft wing of JBVNL. Mini-steel plants having induction furnaces in and around Jamshedpur, Seraikela and Chaibasa (West Singbhum) are among the major culprits.” Amarnath Mishra, the General Manager of JBVNL’s Singbhum supply area stated, “We have managed to curb power theft by industrial units to a great extent but revenue loss is still prevalent. Owing to a weak billing system, we are not able to say how much power is being actually sold.”

In 2014, Madhya Pradesh’s Poorva Khestra Vidyut Vitran Company issued a fine of Rs.1.62 lakh against Welspun Energy Private Ltd. for gross industrial theft of power. In 2017, Mumbai’s civic body-run power utility Brihanmumbai Electric Supply and Transport (BEST) had slapped a claim of Rs.4.85 crore on the owner of a restaurant in suburban Mahim for alleged power theft. An official from BEST said, “Acting on a tip-off, our team raided the two – storey restaurant. We found that a cable for power supply was connected illegally through a changeover switch arrangement.”

Such incidents occur rampantly across India. Technological innovations are being brought in to reduce power thefts. Sensors are being used to detect load imbalances. Companies are also coming up with smart meters and sensors that can detect meter tampering. Smart meters communicate meter readings directly to electricity distributors, eliminating the need for someone to come out and read meters and also reduce the risk of tampering.

Impact of power theft on Indian economy

According to a report, published by the Northeast Group, the Indian power sector loses around $16.2 billion to theft every year. Ben Gardner, President of the Northeast Group stated, “India loses more money to power theft than any other country in the world. The state of Maharashtra – which includes Mumbai – alone loses $2.8 billion per year, more than all but eight countries in the world. Nationally, total transmission and distribution losses approach 23% and in some states, losses exceed 50%.”

According to the World Bank estimates, power theft reduces India’s GDP by around 1.5%. A recent study by the NDTV also concluded that 40% of the electricity in India is still unpaid. Of all the power generated in the country, around one fourth is either stolen or lost in transmission.

Governmental measures to curb power theft

The Union Ministry has suggested that in order to combat various challenges of rural electrification, power distribution companies should raise awareness among the public on the uses of electricity. They should take up extensive drives to curb the theft of electricity and regularise illegal connections and focus on quality, reliability, quantity and timings of power supply in rural areas. The Indian government has also put emphasis on a rationalisation of “cost of connection” for rural households, 100% metering at all levels to “facilitate energy audit” and rationalisation of tariffs in line with tariff policy of 2016. 

The central government has pledged an investment of billions of dollars for creating a smart grid infrastructure. In November, 2014, Prime Minister Narendra Modi announced $4 billion in funding for smart metering programmes. Additionally, over $ 8billion is available for loss reduction programmes and dozens of projects are now underway across India. Measures such as these may reduce power theft in India.

Technological interventions to curb power theft

The high rates of transmission and distribution losses in India are around 60% in several states. This has led to the emergence of several technologies to address the non-technical power loss. Companies such as Omron, Sensus and even Nokia have begun operations in this sector helping power distribution companies detect and address power theft and meter tampering in real time. Others have begun work to reduce costs by enabling remote reading of meters.

Omron, a Japan-based company, the world leader in securing and controlling technologies, launched its Integrated Tamper Detection Solution in India in 2017. Integrated Tamper Detection Solution comprises of a technologically advanced security sensor, embedded in a smart meter. Vinod Raphael, Country Business Head, Omron Electronic and Mechanical Components, Business Division in India, said, “Though it is difficult to reckon the proportion of power theft in transmission and distribution losses, it is certainly one of the major concerns for the utilities. Omron has launched a security sensor for the smart meter by detecting all kinds of (electrical and non-electrical) tampering.” The sensor uses GSM technology to transmit the data to the distribution company’s central server. Raphael also added, “Now, we have started the development of sensors that can be clamped on to low tension distribution lines and can detect load imbalances”. Omron’s new solution is in synergy with the government’s efforts towards minimising transmission and distribution losses, considering the government setup of a “smart meter task force” to address this alarming state of affairs and to contribute towards shaping India as a Smart Grid Nation.

Transmission and distribution losses remain one of the major concerns for the power sector in India. As per varied industry reports, the country ranks fifth in the world in terms of installed capacity, but still more than 300 million people do not have access to electricity. The losses give rise to a vicious cycle – utilities running into losses leading to increase in power tariff leading to more burdens on the end users which ultimately results into more unscrupulous ways to tamper with meters.


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