Answer

Thermal power remains the backbone of India’s energy sector, contributing over 73% of electricity generation in 2022-23. However, coal-rich States like Chhattisgarh, Odisha, and Jharkhand produce substantial electricity but consume significantly less, leading to an imbalance in energy distribution. This disparity raises concerns about environmental burdens, economic equity, and sustainable energy policies, necessitating urgent policy interventions.

Imbalance Between Electricity-Producing and Consuming States

• Lower Consumption in Producing States: NTPC’s thermal electricity generation data show that States like Uttar Pradesh, Odisha, and Chhattisgarh consume only 40%, 38.43%, and 29.92%, respectively, of the electricity they produce. This highlights a disparity in energy usage between producing and consuming States.
  For example: Chhattisgarh generated a significant share of NTPC’s electricity, yet it remains one of India’s lowest per capita electricity consumers, indicating an unequal distribution of energy benefits.
• Disproportionate Pollution Burden: Thermal power-producing States bear high pollution levels due to coal combustion and emissions, while consuming States benefit from clean electricity without facing environmental degradation.
  For example: Jharkhand, Odisha, and Chhattisgarh house major NTPC plants and suffer from high air pollution due to SO₂ and particulate emissions, while Gujarat and Maharashtra, as net consumers, face minimal pollution consequences.
• Net Electricity Exporters with Low Industrial Growth: Many electricity-producing States are net exporters but have lower industrial and economic growth, as industries prefer States with better infrastructure and investment policies.
  For example: Chhattisgarh, a major power producer, exports over 535.29 MW but lacks the industrial base of Maharashtra or Gujarat, which import electricity yet have strong economic growth.
• Revenue Disparity and Lack of Tax Benefits: Producing States do not receive tax benefits since electricity generation is not taxed, while consuming States earn electricity duty revenue without bearing production costs..
• Limited Development in Producing States: Despite housing power plants, producing States struggle with inadequate infrastructure and social development since most economic benefits go to consuming States.

Consequences of This Imbalance

• Environmental Degradation in Producing States: High pollution levels lead to health issues, soil degradation, and loss of biodiversity, impacting agriculture and quality of life in producing States.
  For example: Jharkhand’s Jharia coal belt faces severe air and water pollution, increasing respiratory diseases among residents, while consumers in Punjab or Tamil Nadu face no such hazards.
• Economic Disparities Between States: Producing States remain economically weaker, while consuming States flourish due to lower operational costs and steady electricity supply.
  For example: Maharashtra and Gujarat, despite importing electricity, have high industrial output, whereas producing States like Bihar and Chhattisgarh struggle with economic growth.
• Public Opposition to New Power Plants: Local communities in producing States oppose new thermal projects due to displacement, pollution, and lack of direct benefits, leading to project delays.
  For example: Residents of Singrauli (Madhya Pradesh), home to NTPC plants, frequently protest against land acquisition and air pollution, delaying expansion projects.
• Inefficiency in Resource Utilization: Producing States lack sufficient local demand for their own power, resulting in underutilization of resources, while consuming States struggle with peak demand management.

Policy Measures for Equitable Resource Distribution and Sustainable Development

• Compensation for Producing States: The Union government should establish a compensation mechanism where producing States receive financial benefits for environmental and infrastructural burdens.
  For instance: The Sixteenth Finance Commission can introduce a pollution compensation fund to transfer a fixed percentage of power revenue to producing States.
• Green Energy Investment in Producing States: The government should prioritize renewable energy investments in producing States, ensuring a transition away from coal while maintaining their economic stability.
  For instance: Jharkhand and Odisha, major coal-producing States, should receive higher renewable energy allocations under the National Green Hydrogen Mission to diversify their power sector.
• Revenue Sharing from Electricity Duty: The electricity duty collected by consuming States should be partially shared with producing States to ensure fiscal equity in power generation.
• Mandatory CSR Spending on Local Development: NTPC and other power producers should be mandated to allocate a higher share of their CSR funds for healthcare, infrastructure, and pollution control in producing States.
  For instance: NTPC Singrauli should invest in air pollution control measures, local hospitals, and skill training programs for affected communities, ensuring direct benefits to locals.
• Decentralized Power Utilization: Encouraging local consumption through industrial incentives in producing States will boost economic growth and reduce dependency on external buyers.
  For example: Chhattisgarh and Jharkhand should receive special industrial subsidies to attract manufacturing units that utilize locally generated power, ensuring economic benefits remain within the State.

Bridging the production-consumption gap demands strategic policy reforms, targeted infrastructure investments, and robust renewable energy integration. Such measures can ensure equitable resource distribution and mitigate regional disparities. By fostering inter-State collaboration and promoting technology-led solutions, we can pave the path toward resilient, inclusive, and sustainable development for a power-empowered future.

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