Brutal crackdown

The Chandrababu Naidu government's attempt to crush the agitation against the power tariff hike has helped the Left-led movement gain wide public support.

THE problem with a high-profile image is that when things go wrong, they go horribly wrong and there is nowhere to hide. N. Chandrababu Naidu, Chief Minister of Andhra Pradesh, portrayed by sections of the media as the icon of economic reforms, has acqui red a blood-splattered image following the brutal August 28 police firing and lathicharge in Hyderabad on protestors demonstrating against the steep revision in power tariffs.

The images delivered live by the electronic media to millions of homes across the State outraged public opinion against the government. The government's refusal to initiate a judicial probe into the incidents came to be widely interpreted as an admission of guilt. The government remains unmoved by the turn of events and has rejected the plea by all political parties, including its ally, the Bharatiya Janata Party, to reconsider the massive tariff hike, which came into effect in June (Frontline, J une 23, 2000).

The images of the police firing, the indiscriminate lathicharge and charging at 25,000-odd protestors at Basheerbagh Chowk in Hyderabad by the mounted police were transmitted by Teja, a Telugu TV channel. Television viewers saw cane-wielding police hitti ng the protestors, aiming at their heads; protestors being hit by water cannons; and the police firing opening fire, which resulted in the death of two persons. The two protestors, one of them belonging to the Centre of Indian Trade Unions (CITU) and the other to the Congress(I), were hit in the chest. The video clips also showed protestors returning to claim the bodies of the dead or help the injured, or fight the police with stones. In the two-hour episode, a leader of the dhobies' union sustained bra in damage, caused by police lathis. The transmission stopped abruptly and Teja later claimed that it was muzzled by the government machinery. But, by then, the people's anger had been aroused and there were spontaneous protests in several parts of the St ate against the police action.

Even the strongest critics of the Left parties, which have for more than two years been campaigning against the government's power sector reforms under the direction of the World Bank, have voiced their protests. An industrialist said, "It is obvious to all that the communists took the brunt of the police attack." He said that the police had used "excessive force" and could have used less deadly methods of crowd control. Rubber bullets were hardly used, and water cannons and teargas shells were not depl oyed properly, he said.

Several eyewitnesses told Frontline that the firing started 10 or 15 minutes after a contingent of protestors reached Basheerbagh Chowk. At least 26 persons sustained bullet injuries in the police attack. Although the police claimed that one of th eir men suffered bullet injuries when some protestors grabbed the rifle of a policeman, an eyewitnesses said that she saw a policeman being hit by a bullet from his colleague's pistol. She even offered to name, from the badge he was wearing, the policema n who fired the pistol.

On September 4, Teja put out a story alleging police repression and censorship. It alleged that it was prevented from airing its full report on the August 28 incidents. In Khammam and other towns, cable TV operators protested against police censorship of video cassettes of the August 28 incidents. On September 5, Congress(I) MLA T. Jeevan Reddy alleged in the Assembly that government officials in several districts were forcing cable TV operators to edit out the "brutal and beastly behaviour" of the poli ce. There have been widespread allegations that the government had unleashed repression on democratic dissent.

Chandrababu Naidu's claim that extremist elements among the protestors caused the violence was immediately dismissed by the Opposition. He also claimed that the agitation was organised by a few cadres of political parties, implying that the movement had no popular support. However, Home Minister Devender Goud's admission in the Assembly that more than 25,000 protestors had been arrested since the agitation began on May 27, contradicted this. Goud also admitted that 158 instances of lathicharge on demons trators had taken place across the State during the period, implying that on an average every two days there had been three episodes of lathicharge.

B.V. Raghavalu, secretary of the State Committee of the Communist Party of India (Marxist), has in a report to the National Human Rights Commission (NHRC) alleged that goondas hired by the TDP, under the banner of the Telugu Sena, persistently attacked p rotestors across the State. (The formation of the controversial Telugu Sena was authorised by the TDP's politburo after the protests began in May.)

The All India Democratic Women's Association (AIDWA), in a memorandum to the NHRC alleged that the police "specifically targeted" women protestors (see box). Claiming that more than 100 women were injured, it observed that the police action was meant to "coerce women into withdrawing from the public sphere".

As it happened, immediately after the August 28 incidents, World Bank President James Wolfensohn said in Washington that there was "nothing dramatic" in what the Andhra Pradesh government was doing. He said that power plants should broadly recover costs and advised the Andhra Pradesh government to have a tariff structure that at least enabled full recovery of costs. He said: "If you want to subsidise poor people, subsidise them directly."

Wolfensohn's statement was greeted with an uproar in the Assembly. The Left parties and the Congress(I) claimed that the statement endorsed their position that the Bank was interfering in the affairs of the State. The BJP's floor leader, Indrasena Reddy, alleged that the government had become a "puppet" in the hands of the World Bank. He also said that it had borrowed "indiscriminately" from the Bank and was taking the State on the road to "economic slavery". The strong criticism forced the government t o place some of the documents that it had signed with the Bank on the table of the House. The documents indicate that the government has committed to the World Bank that it will keep increasing the tariffs by about 15 per cent annually in the next four y ears and thereafter by 12 per cent.

IN May, the Andhra Pradesh Electricity Regulatory Commission (APERC) notified a steep increase in power tariffs affecting almost all classes of consumers (Frontline, September 1, 2000). The revision resulted in an increase in revenues amounting to about Rs.800 crores. The Congress(I), the leading Opposition party, was quick to protest. The nine-party Left alliance, formed to protest President Bill Clinton's visit to India in March, was united on the issue too. Raghavalu explained that the Left pa rties, badly splintered since the 1970s, "learnt to live together and sank their ideological differences to ensure a united front against the government."

The Left alliance and the Congress(I) "synchronised" their protests to ensure maximum impact. Thus protests were organised at every meting attended by Ministers and at every official event.

In June the Andhra Pradesh Federation of Chambers of Commerce formed an action committee and in early July it organised a "bijli bandh" (electricity bandh) in the Chikkadapally area in Hyderabad. Shops and business establishments turned off the lights an d conducted business with kerosene lamps, torches and candles. This form of protest was later adopted by the political parties for a State-wide bijli bandh in August. Small industrialists in the industrial estates organised picketing and rasta roko actio n in Hyderabad.

Fundamentally, the APERC has been criticised for a total lack of transparency in arriving at the tariff revision. Almost every section of society - agricultural users, domestic consumers, traders and industrialists - has protested against the tariff hike . Agriculturists say that they will be unable to bear the heavy burden of the new levies. Farmers of Telengana and Rayalaseema regions, who have invested heavily in pumpsets, will bear higher costs compared to farmers in the coastal Andhra region, making them non-competitive. Moreover, they allege that the government's failure to compensate the Andhra Pradesh State Electricity Board (APSEB) - now unbundled into APTRANSCO, APGENCO and several regional power distribution companies - has led to poor financ ial condition of APTRANSCO. They allege that the government's failure to compensate the APSEB (and now TRANSCO), is the primary reason for the financial crisis.

Industrial users complain that the regulator's hearings, which led to the tariff revision, were utterly non-transparent. V.B. Shankar, vice-president of the Federation of Andhra Pradesh Small Industries Association (FAPSIA), told Frontline that in dustry representatives were not allowed to observe the proceedings of the Commission. "Even more galling," he said, "was the presence of the members of the World Bank team during the proceedings."

The APERC is also mired in a legal battle with industrial consumers. The Commission's ruling banning the use of captive power generators has been challenged in the State High Court by several spinning mills. A senior official in one of the spinning mills alleged that the APERC had failed to maintain a distance with the power supplier (TRANSCO). He alleged that the APERC was protecting the interests of the power supplier while ignoring the interests of consumers.

According to K. Rosaiah, Congress(I) spokesperson, the APERC's computation of tariffs for domestic consumers is seriously flawed as consumers are charged a peak load rate even though the APTRANSCO is not incurring any peak load costs for power purchased from other States. A former Electricity Minister, Rosaiah alleged that the tariff did not take into account the weightage of peak and non-peak power consumption by domestic users. He said that the government promised a subsidy of Rs.2,100 crores in Decem ber 1999 but scaled it down to Rs.1,345 crores in May 2000 and that this was accepted by the APERC without due consideration.

Several issues regarding the functioning of APTRANSCO have been highlighted by critics of the government. First, only 41 per cent of the power supplied by APTRANSCO is billed. This means that about two-thirds of the consumers are bearing the load of the entire system. The transmission and distribution (T&D) losses of APTRANSCO stood at 37 per cent in 1999-2000, compared to the international norm of 10 to 12 per cent. It is generally accepted that power theft is an important component in what goes under the name of T&D losses. The APSEB had not been incurring losses until 1994, that is, before the reforms were introduced. The reform process has dramatically changed TRANSCO's losses, which are now in excess of Rs.3,000 crores.

Critics of the government allege that this situation has arisen partly out of the government's failure to compensate TRANSCO for the power it has to provide to agricultural and other consumers at subsidised rates. To make matters worse, TRANSCO's T&D los ses have increased from about 19 per cent in 1994-95 to about 37 per cent in 1999-2000. These losses have imposed a colossal drain on the utility. It is estimated that a 1 per cent reduction in T&D losses would generate additional revenue to the tune of about Rs.125 crores for TRANSCO. The argument against the hike goes thus: a 6 per cent saving in T&D losses, possible in technical terms, would undermine the very rationale for the tariff hike.

Greater transparency in economic affairs, leading to improved efficiency, has been held out a major argument in favour of economic reforms. Chandrababu Naidu's popularity among business interests was based on this attractive proposition. However, transpa rency is widely perceived to be the major casualty in the power sector reforms. One area where transparency has been found most wanting pertains to the operations of the independent power producers (IPP).

Dr. Jayaprakash Narayan, campaign coordinator of Lok Satta, a non-governmental organisation (NGO), which concentrates on political reforms, told Frontline that a proper metering and reconciliation system would enable the electricity board to funct ion more efficiently. This would bring down costs, and as a consequence, the tariffs. He also advocates decentralisation of electricity distribution, possibly allowing for the emergence of consumer cooperatives. Lok Satta claims that the operations of th e IPPs have been non-transparent, allowing for cost-padding on several counts.

Left party leaders allege that the hike in tariffs is meant to serve the interests of private players in the power sector. They argue that higher tariffs are, in part, caused by the very nature of the operations of the IPPs. Moreover, higher tariffs are also meant to keep "investor interest" alive in the distribution business. The next stage of the unbundling process of electricity utilities, which is due, may offer tremendous room for the free play of private interests in power distribution.

Raghavalu, in a public interest petition before the High Court, has raised the apprehension that the assets of the now publicly-owned distribution companies may be sold for a song to private entities. The value of TRANSCO's assets are likely to be in the region of Rs.60,000 crores. In addition, it has properties whose commercial value is likely to be in the region of Rs.25,000 crores. It is feared that these assets will be heavily undervalued. Raghavalu says that, for instance, the assets of the four di stribution companies in Tirupati, Hyderabad, Visakhapatnam and Warangal are valued at Rs.370 crores while their real value, including considerable real estate, would be several thousand crores. The gross undervaluation of assets of the public company mea ns that the private sector entity, which will take a 51 per cent controlling stake in the newly formed private distribution company, need bring only a couple of hundred crores as equity.

It is now clear that electricity as a public issue is unlikely to remain off the political agenda. Despite its ambivalence on the reforms process, the Congress(I) is clearly under pressure to maintain the momentum of the protests. The Left parties, enthu sed by the widespread support the movement has enjoyed, are ready for a long haul. For the TDP government, the August 28 incidents have perhaps brought to a close a phase in which he was posed as the CEO of a reforming State.