How rampant is electricity theft in India? Grid companies lose 70 billion a year, why does the state choose not to care?
Against the backdrop of a global energy crunch, India has not been spared from severe power shortages.
India is actually a major power producer, generating 160 million kilowatts of electricity per year, second only to China and the United States, yet according to official Indian data from 2020 India’s per capita electricity consumption is far below the world average, due to its very outdated power infrastructure and severely aging power equipment and power lines.
India’s losses in power transmission are as high as 22.7% and even 50% in some areas, which in long-distance transmission allows India, which does not have extra-high voltage technology, to produce a large portion of the power lost in transmission consumption.
The other major cause of India’s power shortage, besides equipment and technology, is “electricity theft”.
How crazy are ordinary people in India about stealing electricity?
According to India’s own statistics, India steals 30% of the electricity it produces every year, which is almost as much as the total amount of electricity generated in Pakistan in a year.
Helping people steal electricity is a popular profession in India, where the wires are so intricate over the streets that even an unfamiliar senior electrician would have no way of figuring out where they came from.
Indians steal electricity by the simple and brutal method of throwing water on top of a transformer to damage it, and then stealing the electricity from the power company when it sends someone out to repair it.
The frenzied theft of electricity by civilians in India gives the false impression that electricity in India is extremely expensive, but the opposite is true: electricity is quite cheap for civilians in India, costing only 4 rupees per kilowatt-hour, or 30 cents.
Electricity is cheap in India, so why do they steal it?
The general population in India has a very low income
Although India is the fifth largest economy in the world, with a population of 1.38 billion, the GDP per capita is very low, just over $2000. Based on a per capita income of about 60% of GDP, Indians earn an average of $1,200 per year.
The average Indian spends about $7-8 per month on electricity under normal circumstances, which is almost 10% of the average Indian’s monthly income and clearly beyond the reach of the Indian population.
India’s caste system is deeply entrenched
India’s daily power supply is mainly to the “high caste” rich areas, and usually the high caste people get more than 18 hours of power per day. Even if the lower caste slums get electricity, it is only for a very short period of time, 2-3 hours a day, and blackouts are the norm.
There is a famous saying in India that “power outages are disrupted by occasional power supply”. In India, where a quarter of the population is extremely poor – that’s more than 300 million people who can’t afford to consume electricity at all – and where modern life depends on electricity, electricity theft has become the norm.
Indian politicians encourage “electricity theft”
Moreover, in India, “electricity theft” has become a major tool for politicians to get votes in regional elections, as long as they encourage people in their constituencies to steal electricity.
Theft of electricity has become both a source of electricity for the poorer classes and the best way for forces to win votes, and politicians have naturally turned a blind eye to electricity theft after coming to power, and even obstructed India’s power inspectorate from investigating it. Indian power company’s charges often have to risk their lives to collect electricity, and over time the charges are not willing to go to the following charges. As for the economic losses generated by electricity theft, and individuals have nothing to do with the natural and no one to care. The reason is that electricity theft has caused widespread blackouts in India for more than half the country.
When India was founded, it set an ambitious goal of becoming a major power with a strong voice, but to this day, India’s economy has yet to take off in any real way, and for that reason it is eager to industrialize.
But as we all know, industrialization, especially heavy industry, requires a strong power base, without which nothing is possible, and a weak power base is one of the main obstacles to India’s economic development.
Not only is India’s power infrastructure and power technology backward, but the management and distribution of power supply is also extremely confusing.
Power generation and supply in India is in three different forms – central, state and private power companies.
Centrally managed power can be distributed equally to the states, but the central government can hold only 30% of India’s total power. States have different levels of economic development, and the more power-rich states are reluctant to transmit power to the power-starved states. The private power companies are only supplying electricity to the rich, which creates a huge imbalance in the level of power supply across India.
Outdated equipment and outdated power control systems have all contributed to India’s power shortages.
India’s transmission losses are around 30%, compared to the world average of 9%.
Power theft by the urban poor in India has given rise to a large number of grassroots electricians who can get poor households electricity from the public grid with just a pair of pliers, and this unregulated connection has led to higher losses in power equipment.
Power theft, private wire pulling, transmission and distribution losses cost India’s power companies roughly more than $11 billion a year, or nearly $70 billion. According to World Bank estimates, India’s power debt has reached 5% of India’s GDP, and such a vicious cycle has left power companies unable to make the necessary investments in renovating the grid system.
Data shows that electricity theft alone is slowing India’s GDP by about 1.5% per year.
Power theft is not only costing power companies dearly, it is also severely hampering India’s economic development.
Manufacturing industries and factories, for example, are often allocated more power and they become targets for power thieves, who often cause power outages in factories that can’t sustain production, and other industries suffer from power theft as well. As electricity theft has become more and more rampant, in addition to the poor, many companies have also become involved in the theft of electricity, stealing it in a grand manner after giving enough benefits to the power company executives. This not only causes losses to the country’s electricity, but also breeds serious corruption.
India is facing a shortage of coal and gas, and the vast majority of India’s power plants are thermal.
According to India’s plan, India’s economy will grow at 8% in 10 years, and India’s electricity supply will have to increase 5-6 times more than it does now to maintain this growth rate. The Indian government is also taking great pains to solve the problem of power supply and electricity theft, but so far with little success. It seems that India still has a long way to go to solve the problem of electricity supply.