The Indian power ministry announced on Thursday that it will invest $4 billion (INR 25,300 crore) in the power industry to roll out a new metering system and upgrade distribution networks around the country to help tackle the power theft issue.
The announcement is a key step by Prime Minister Narendra Modi's government to wipe out the electricity theft problem plaguing the country and to introduce uninterrupted power supply. The total project will reportedly cost $5.27 billion of which $4 billion will be contributed by the government.
The new scheme will see the power ministry rolling out new meters for distribution feeders, transformers and consumers. The plan also intends to strengthen sub-transmission and distribution networks, Reuters reports. The project will help cut technical and commercial losses in the power department.
Power theft has been a major problem in the country. According to a previous Bloomberg analysis, India loses $17 billion in revenue annually due to prolonged power cuts and blackouts. The country also loses over a quarter of its power due to poor wiring.
Billing rates "are too low, and theft is too high. If you look at the power losses, 80 percent is theft," Ratul Puri, chairman of Hindustan Powerprojects , a privately held power plant operator told Businessweek in an earlier interview.
The government has raided several private companies after the Modi administration stepped in. More than 750 cases of power theft were reported before June.
Experts suggested that power should be subsidized to solve the emerging problem. But theft- from both the poor and rich - made it unfeasible.
In a 2013 feature for The Hindu, William Ash, a Strategic Program Manager at the IEEE Standards Association explained that "smart meters" are a great way to tackle the theft problem.
"Most of the time, this theft happens through tapping of electricity from live wires, which also poses risks to people's lives. The use of smart meters thus becomes extremely relevant in developing countries such as India," Ash wrote.
A smart meter is an electricity-measuring device that remotely switches "the customer's power supply off and/or individual appliances based on demand response. It can remotely control electricity consumption to maximise energy efficiency and load balancing," Ash explained.
The Modi government has set a goal to use renewable energy to power at least one light bulb in the remote areas of India by 2019. Narendra Modi has been credited for solving the power theft problem in Gujarat when he was the chief minister. o f the state