Manmohan Singh with P.M. Sayeed (left) and Himachal Pradesh chief minister Veerbhadra Singh at Jhakri. (PTI)

Shimla/Rampur, May 28: Free supply of power is blocking the growth of the power sector and should be scrapped, Prime Minister Manmohan Singh said today.

“Giving free power will not help in self-sufficiency in power generation and it could be an obstacle in additional power generation,” Singh said while dedicating to the nation the 1,500-mw Nathpa Jhakri hydel power project, India’s largest.

“At a time when the demand for power was steadily rising and power cuts were rising alarmingly in the country, in order to fulfil this demand it was time to tell the people that free power was a hindrance to the key power sector.”

An acute power shortage that sparked unrest across the state had prompted the Congress-led Maharashtra government to withdraw free power for farmers though this was one of the lollipops that helped the alliance win last year’s Assembly elections.

Currently, another Congress-led government, in Andhra, supplies free power to 95 per cent of the state’s farmers.

The United Progressive Alliance’s common minimum programme, drawn up in consultation with the Left, however, makes no mention of providing free power to farmers.

The Prime Minister urged the state electricity boards to sharpen up their act, else “our target of increasing electricity generation will not be fulfilled”.

“The state electricity boards are undergoing steady losses. So the boards must improve their functioning by carrying out reforms,” Singh said.

The UPA aims to provide electricity to every village in the next four years under the Bharat Nirman Yojana, the Prime Minister said, adding that he was pleased that former Prime Minister Rajiv Gandhi’s dream of completing the Nathpa Jhakri project at Jhakri, about 150 km from Shimla, has been accomplished.

The project, which became operational in May 2004 when all its six units began producing power commercially, generated 7,448 million units of energy till May 24, 2005.

It is a major source of power for the northern grid and lights up millions of homes in nine states and Union territories: Haryana, Punjab, Jammu and Kashmir, Chandigarh, Delhi, Uttar Pradesh, Uttaranchal, Rajasthan and Himachal Pradesh.

Union power minister P.M. Sayeed, however, dealt a blow to Himachal Pradesh and other power-producing states when, after inspecting the project, he ruled out a generation tax on power.

“There is no question of imposing generation tax. The states can only charge the electricity duty on consumption of power units,” Sayeed said.

Officials of the Satluj Jal Vidyut Nigam, earlier known as Nathpa Jhakri Power Corporation, said there is no threat to the hydel project from the 40-metre-deep upstream lake formed in Tibet. The plant was closed for several days because of the lake threat last year.

“On the basis of information exchanged with Chinese engineers by the Central Water Commission, the lake is not likely to burst,” said Nigam chairman and managing director Y.N. Appa Rao.