Electricity Theft In India: An Analysis By- Pritee R. Deotale
Electricity Theft In India: An Analysis
Authored by- Pritee R. Deotale[1]
Abstract
India
stands third-largest in electricity production and second-largest in
electricity consumption worldwide as of 2022. It is a backbone of Indian
Economy as well as a prime mover of a modem economy. This backbone is hard hit
by an offence called Electricity theft. This offence has an adverse effect not
only socio-economic growth and development of the country, but also it has
hindered the commercial, Industrial and financial sector with a greater
magnitude. Human intelligence and need for free electricity has given birth to
this offence. The electricity theft is being done in various ways since ages.
The Statute Electricity Act 2003 deals with electricity theft and its
punishment per se. This research paper will analyze the legal and regulatory
framework for Electricity theft in India. Further the paper will analyze the
issues and challenges in curbing this age old practice and lastly it will
suggest the reforms needed to channelize the proper and legal use of
electricity.
Keywords:
Electricity Theft, Electricity Act
2003, Legal and Regulatory Framework.
1. Introduction
India
is one of the fastest growing economies and yet crores of people eat hand to
mouth here. The changing time has completely changed the dynamics of human life
at par. Ever since the inception of electricity it has served mankind
significantly and thus became the fourth pillar of life apart from food clothing
and shelter. India is the third largest producer and second largest consumer of
electricity worldwide with an installed capacity of 395.07 GW as of January
2022.[2] Still
Indian Power Sector is facing a serious issue of lean revenue collection
against the energy supplied and one of the major reasons behind the revenue
losses is electricity theft. Electricity theft may seem like a petty offence at
rural level but it is rampant at urban level and when looked at national level
the impact of this offence magnifies and the financial loss it brings is beyond
imagination.
2 Legal Position of Electricity in India
Electricity
falls under concurrent list in schedule seven of the Constitution of India.
Thus both center and state have the authority to make laws on this subject. The
law which regulates Electricity is The Electricity Act 2003 and it is a Central
Law. The act deals with all the major aspects of electricity like generation,
transmission, distribution, trading, theft etc. The Electricity Act 2003 is the
supreme law which deals comprehensively with electricity theft in India.[3]
3 Meaning of Electricity Theft
Electricity
theft is a criminal practice of stealing electric power. Section 135(1) of the
Electricity Act 2003 defines ‘Theft of Electricity’ which says a person is
guilty of electricity theft if he dishonestly makes use of electricity in the
following ways. Taps or makes any connection with overhead, underwater lines or
cables. Tampers meters or uses current reversing transformer, or any device
which interferes with accurate registration of electric current. Damage or
destroy electric meter, equipment or wire so as to interfere with proper
metering of electricity. Use of electricity for the purpose other than for
which the usage of electricity was authorized. Irregularity in paying the bill
by bribing the billing authority and record the meter at a lower number than what
it is shown in real life.[4]
4 Kinds of Electricity Theft in India
Electricity
losses are majorly divided into two main categories; technical losses and
non-technical losses. Technical losses are the losses which are caused at the
power stations or during transmission and distribution etc. But electricity
theft falls under non-technical losses as they are caused by the actions of
third party.[5] Further
the Electricity theft can be categorized in different kinds as per the
electrical equipment used to carry out this offence and they are:[6]
4.1
Billing irregularity and Unpaid Bills: Billing irregularity is a very common practice in electricity
theft. Irregularity in paying the bill by bribing the billing authority and
record the meter at a lower number than what it is shown in real life.
Ineffective measuring mechanism of power consumption registration. Unpaid bills
of domestic, business and industrial users result into heavy losses to
electricity companies affecting the economy.[7]
4.2
Meters: This one meter can be used in different
ways to carry out the electricity theft. Tampering of meters and preventing the
mechanical disc from moving by sealing it. Next is to bypass the meter
illegally by connecting it to the fuse which prevents the movement of rotating
disc and the consumption of energy is not recorded. The other method includes
opening of meter without damaging its seal and reversing the dials. Electronic
meters can also be tampered by a sudden electrostatic discharge which causes
latent or permanent damages.
4.3
Wires and Cables: Illegal
tapping of bare wires or underground cables is another way of electricity
theft. Even at times the circuit wire is disconnected or broken from the
circuit terminal block and a triple breaker is inserted in the circuit to carry
of theft.
4.4
Phase-to-phase connection: This
is similar to using an alternate neutral line, except that the system voltage
becomes the phase-to-phase voltage at 240 or 380 volts.
4.5
Unauthorized Use: If the
consumer makes an unauthorized use of electricity, i.e., if the connection was
given for domestic purpose and the consumer uses it for commercial purposes
then also it falls in the ambit of electricity theft.[8]
4.6
Transformers: Illegal
terminal tapping of overheads lines on the low voltage side of the transformer.
This tapping is further done in two ways and they are fish pole connections and
flying connections.
5 Reasons behind Electricity Theft in India
Electricity
theft is an age-old practice and it is born out of certain ground level issues
like lack of available capacity, corruption, higher electricity prices, weak
infrastructure, poor enforcement of law against electricity theft etc. One of
the strange reasons for electricity theft is election. It has seen that
electricity theft increases during election which also means Political leaders
earn votes by allowing electricity theft. As we know farmers form a huge part
of total voters in India and political leaders often attract them with a
promise of free or subsidized electricity to attract votes.[9] Furthermore
most of the overhead electrical wires in India are still not insulated helping
people to do illegal hookups and the law is not deterrent enough to create fear
among the electricity thieves.[10]
6 Access to the Premises
Section
135(2) of the Electricity Act 2003 states that an authorized officer on behalf
of the State government may enter, inspect, break open and search any place and
premises and check the meter through which energy is supplied, where there is
reason to believe that electricity has been, or is being drawn dishonestly. Any
occupant of the place of search or any person on his behalf shall remain
present during the search and the inspecting officer shall prepare a memorandum
of inspection.[11]
7 Punishment for Electricity Theft in India
Section
135 to Section 150 of the Electricity Act 2003 talks about Offences and
Penalties which comes under Part XIV of the act. Section 135 defines
electricity theft and also talks about the various forms of electricity theft.
This section also prescribes punishment for electricity theft depending upon
the load abstracted; If the load abstracted is lesser than 10 watt then the
first conviction will be not less than thrice of financial gain. If the
conviction happens for the second time and subsequently then not less than six
times of financial gain.[12] If
the load abstracted is greater than 10 watt then the first conviction will be
not less than thrice of financial gains and if the offence happens second time
or subsequently then the punishment will be imprisonment not less than 6 months
which can exceed to 5 years and fine not less than 6 times of financial gains.[13]
Section
136 deals with theft of electric lines and materials; it says whoever
dishonestly cuts or removes or take away electric line, material or meter from
a tower, pole, any other place of installation where it might be rightfully or
lawfully stored or kept and whoever commits an offence of theft of electric
lines and material, and shall be punishable with imprisonment for a term which
may extends to three years or with fine or with both.[14]
Section 137 of Electricity Act 2003 lays down punishment for receiving stolen
property.[15] Section
141 deals with extinguishing public lamps, it says whoever, maliciously
extinguishes a public lamp shall be punishable with fine which may extend to
two thousand rupees.
Electricity
Act 2003 also talks about the offences by companies.[16] During
a raid at industrial and commercial establishments in Haryana the authorities
detected around 2500 cases of electricity theft.[17] This
showed that 30-35% of electricity supplied was stolen. Then in 2007 Government
made offences related to electricity theft cognizable and non-bailable.[18] Section
152 talks about compounding of offence but it is allowed once per consumer.
Section 153 talks about creation of special courts for speedy disposal of
offences covered under section 135-140 and 150. The Supreme Court held that
clear cases of electricity theft could not be decided by Consumer Forum where
special courts have constituted.[19] The
Supreme Court held that when a service provider prima facie finds that the
consumer has committed the offence of electricity theft and if the service
provider disconnects the electricity line without giving an opportunity of
being heard or without any proper notice, the electricity line can be restored
only after the consumer compensates the service provider.[20]
8 Impact of Electricity Theft in India
Electricity
theft has an adverse effect on the economy, as huge revenue losses owing to
electricity theft amounts to billions annually. In developing countries like
India around 50% of generated electricity is lost through theft which result in
scarcity in electricity supply and unsatisfied consumers.[21] The
AT&C (Aggregate Technical and commercial) losses ranges from 15% to 65%
across India with an average of 34% annually.[22]
Electricity theft disturbs the local area supply of electricity, leading to overloading
of transformers creating blackouts or brownouts. It also leads to damage of
property and utility and increases the transmission and distribution losses due
to tampering of wires and cables.[23]
Heavy losses due to electricity theft has prevented reduction of tariffs and
subsidies provided for agriculture. Eliminating these losses are needed to
improve the standard of living by allowing economically weaker section to
access electricity.[24]
9 Measures by Government to curb
Electricity Theft
The
Union Power Ministry came up with suggestions for the States that the power
distribution companies should raise awareness among public about curbing
electricity theft and irregularities and focus on quality, quantity,
reliability and supply of electricity. The Ministry has also suggested 100
percent metering at all levels to facilitate energy audit and rationalization
of cost of connection at rural level and improve energy efficiency and
interventions which are made to reduce the AT&C (aggregate technical and
commercial) losses.[25] Further
schemes like Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) where government
of India is providing free electricity connections to households belonging to
BPL (below poverty line).[26] States
such as West Bengal and Bihar has removed applicable connection charges
required to be paid by the prospective consumer in order to obtain electricity
connection from a discom for households. However, the applicable connection
charges are to recovered later from the consumer through the electricity bills
in the form of installments. These initiatives were made to motivate the
economically weaker households to avail the electricity connections.[27]
Government
of India has introduced smart meters as they are becoming extremely relevant in
power saving and giving the exact bill. It can remotely control the electricity
consumption and maximize the energy efficiency and load balancing. They are
highly cost- effective and are capable of having one way communication. These
smart meters are good for distribution companies which will help them detect
unusual and heavy power demand. It’s very useful in areas where the ratio of
electricity theft is high and manually detecting it is difficult. The
electricity service providers can further discontinue the services to domestic
and commercial users which don’t pay bills. One of the most important reasons
to bring these smart meters to use is to prevent the technical and
non-technical loss of electricity. Governments of New Delhi, Maharashtra,
Andhra Pradesh, Puducherry and Karnataka have taken this initiative.[28]
Further
to strengthen these measures the Ministry of Power has launched National Smart
Grid Mission (NSGM), Integrated Power Development Scheme (IPDS) and Ujwal
Discom Assurance Yojana (UDAY) with special focus on smart metering. Mandatory
deployment of smart meters was included in the National Tariff policy of 2016.[29] Other
measure taken by the State governments to curb electricity theft is by creating
field vigilance team. The Gujarat Electricity Board has set up a vigilant
department designated as the Director of Security and Chief Vigilance Officer
(DSCVO). Separate Police Stations are set up under this to specifically deal
with electricity theft cases.[30] A
theft detective drive was launched by the Maharashtra State Electricity
Distribution Company Limited (MSEDCL) after a massive spike of electricity
theft cases. It was launched to improve its collection efficiency and handle
corruption cases tightly. Six dedicated police stations were established under
this to handle electricity theft cases. In November 2020, 728 consumers were
found engaging in electricity theft with a total of 9 lakh units. Later on in
2021, MSEDCL has formed special squads in Pune to monitor residential, commercial
and industrial areas and it found around 1096 cases of electricity theft in
just 45 days indicating an approximate loss of 3.99 crores.[31] The
Feeder Franchise scheme of MSEDCL came to manage electricity theft as well as
educate the consumers for payments of bills for the state’s welfare.[32]
10 Issues and Challenges for curbing
Electricity Theft
Electricity
is the strongest pillar of all-round growth and development of any economy as it
facilitates everything from domestic uses to education, from commercial uses to
industrialization, from charging gadgets to charging electrical vehicle, to
even connecting the world via internet. Nothing in left untouched by
electricity and still availability of electricity is a dream for many till
today. Electricity theft is a major reason for huge electricity losses in the
county and it is backed by few other issue and challenges which makes it even
worse. Government of India is providing free electricity to households of BPL
(below poverty line) under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
scheme but the BPL households are not willing to take this free electricity
connections in fear of high amounted bills, this further highlights the other
issue of unawareness among the people about electricity schemes.[33] Quality,
reliability and timing of electricity supply are also considered as important
reasons for not taking up electricity connections. Bigger states like Uttar
Pradesh has a prevalent practice of ‘katia Connection’ which is nothing but
direct theft of electricity and this issues has to monitored seriously by the
discom staff of the respective state.[34] Furthermore
some of the major challenges faced are invalid meter reading due to installation
of meter at inaccessible places, absence in quality checks, errors in recording
the electricity consumption, data tampering all these magnifies the
non-technical losses to greater extent.[35]
11 Conclusion
Electricity
theft has emerged out as a very serious problem and the cases of electricity
theft are increasing gradually. This practice has led to electric scarcity with
the increase in tariff. Providing electricity subsidies is getting difficult
for the government. The power distribution companies are already facing huge
losses and they are under debts. If the electricity theft continues then soon
the discoms will go bankrupt. Electricity theft is an outcome of mal-governance
hence in order to manage it the government needs to promote good governance in
this sector. Setting up better infrastructure, implementing technologically
advanced systems and proper implementation of the schemes launched by
government will help in curbing electricity theft to a greater extent.
12 Suggestion
The Central and State governments have laid
down many schemes to curb this malpractice and some other measures which will
altogether curb this are; taking stringent action against the accused and
imposition of heavy penalty. Implementation of an efficient mechanism to monitor
the total electricity consumption at every level i.e., from domestic to
industrial. Statistical assessment of load dispatch centers should be done at
regular intervals. Providing technical training to the operating personnel.
Last but not least creating awareness among the consumers about the
unauthorized use and electricity theft and motivating them to make use of
ethical practices for electricity consumption.
[1] Pritee R. Deotale,
Ph.D. Research Scholar, Maharashtra National Law University, Nagpur,
[email protected].
[5] Ipleaders, “Punishment
for Electricity Theft in India”, https://blog.ipleaders.in/electricity-theft-punishments-india/
(last visited June 18, 2022).
[6] Vinay Kathera, “Power Theft
in India”, https://energycentral.com/c/um/power-theft (last visited June
18, 2022).
[7] Mohammad Irshad, “Electricity
Theft- A Primal Concern”,
https://blog.ipleaders.in/electricity-theft-a-primal-concern (last visited June
18, 2022).
[9] Aritra Mitra, “Power
theft hits India’s GDP hard”, BUSINESS ECONOMICS, (last visited June 19,
2022).
[10] Ankita Agarwal, “Power
theft in India”, https://www.projectguru.in/power-theft-india (last visited
June 19, 2022).
[12] Section (135)(1)(e)(i) of The
Electricity Act 2003.
[16] Section 149 of The Electricity
Act 2003.
[17] Sukhbir Siwach, “Power theft
raids: How they happened, and why Haryana govt carried them out”, INDIAN EXPRESS,
https://indianexpress.com/profile/author/sukhbir-siwach (last visited June 20,
2022).
[18] Cabinet approves amendment to
make power theft cognizable offence, THE ECONOMIC TIMES,
https://economictimes.indiatimes.com/industry/energy/power/cabinet-approves-amendment-to-make-power-theft-cognizable-offence/articleshow/843872.cms?from=mdr
(last visited June 20, 2022).
[21] Thomas B. Smith, “Electricity
theft: a comparative analysis”,
http://www.provedor.nuca.ie.ufrj.br/eletrobras/estudos/smith1.pdf, (last
visited June 21, 2022).
[22] Ibid.
[23] Bharath Ram, “Power
Theft”, https://www.cag.org.in/newsletters/public-newsense/power-theft (last
visited June 21, 2022).
[24] “Anti-power theft
campaign fetches Jaipur Discom Rs 91 crore”, ECONOMIC TIMES,
https://energy.economictimes.indiatimes.com/news/power/anti-power-theft-campaign-fetches-jaipur-discom-rs-91-crore/71868097
(last visited June 21, 2022).
[25] Deepak Patel, “Curb
electricity theft and focus on quality: Power Ministry’s Suggestions to States
on rural electrification”, https://indianexpress.com/article/india/curb-electricity-theft-and-focus-on-quality-power-ministrys-suggestions-to-states-on-rural-electrification-4636185
(last visited June 22, 2022).
[26] Ibid.
[28] Usha Rama, “Solution to
Control Power Theft in India”, https://usharama.edu.in/blogDetail/solution-to-control-power-theft-in-india
(last visited June 22, 2022).
[29] Deepak Patel, “Curb
electricity theft and focus on quality: Power Ministry’s Suggestions to States
on rural electrification”, https://indianexpress.com/article/india/curb-electricity-theft-and-focus-on-quality-power-ministrys-suggestions-to-states-on-rural-electrification-4636185
(last visited June 22, 2022).
[31] Somit Sen, “Maharashtra:
Power theft of more than 9 lakh units detected by MSEDCL”, TIMES OF INDIA,
https://timesofindia.indiatimes.com/city/mumbai/maharashtra-power-theft-of-more-than-9-lakh-units-detected-by-msedcl/articleshow/79570217.cms
(last visited June 22, 2022).
[33] Deen Dayal Upadhyaya Gram Jyoti
Yojana (DDUGJY) scheme, india.gov.in,
https://www.india.gov.in/spotlight/deen-dayal-upadhyaya-gram-jyoti-yojana (last
visited June 22, 2022).
[34] Ibid.
[35] Swarnendu Chatterjee
and Hamna Viriyam, “Power Theft Management: The India Chapter- Is it Time
for a Refurbishment”, https://ijpiel.com/index.php/2021/05/10/power-theft-management-the-india-chapter-is-it-time-for-a-refurbishment
(last visited June 22, 2022).