The 61-year-old Prabhu, a former member of the Shiv Sena, joined the Bharatiya Janata Party (BJP) on Sunday to take part in the next set of reforms as promised by the Narendra Modi-led NDA government.
Described by many of his colleagues as “intelligent, focused and result-oriented”, Prabhu, a four-time member of Parliament from Rajapur constituency in Maharashtra, has been heading the advisory group for integrated development of power, coal and renewable energy. Prabhu is Modi’s sherpa— the senior official who helps prepare the agenda for leaders—for the upcoming G20 summit and is well versed in the grammar of governance.
“He pushed through two things—the Electricity Act of 2003 and securitization of dues from the states. This has been his landmark contribution to the Indian power sector,” said a former secretary in the Union government who had closely worked with Prabhu. Prabhu was a minister in the Union cabinet for six years where he handled portfolios such as industry, environment and forests, chemicals and fertilizers, heavy industry and public enterprises and power.
India allows 100% foreign direct investment (FDI) in the power sector, and the Electricity Act 2003 opened significant opportunities for private sector investments. The landmark Act also provided for non-discriminatory open access in the transmission segment and mandated State Electricity Regulatory Commissions to introduce open access in distribution after taking into consideration state-specific conditions.
While several amendments to the Act are being considered now in tune with the times, many including petroleum minister Dharmendra Pradhan have lauded it. “In Atalji’s (Bihari Vajpayee) government, a new Electricity Act was brought in and after that power generation capacity increased in the state and so did private sector investments. That was a very transparent and progressive step,” Pradhan had earlier told Mint. Of India’s current capacity of 254,049.49 megawatts (MW), 36% or 90,903MW is operated by the private sector.
Prabhu, who headed the task force for interlinking of rivers, was also the chairman of the Maharashtra State Finance Commission, Saraswat Co-operative Bank and member of the Maharashtra Tourism Development Board, and has been lauded for the settlement of outstanding dues by the state electricity boards (SEBs) which helped in saving the state-owned utilities from financial collapse. He was also instrumental in the implementation of the landmark tripartite agreement which allowed the Union government to recover the amounts due from the states by deducting them from central devolution.
Interestingly, many distribution utilities are now saddled with losses arising from theft, besides transmission and billing inefficiencies. State electricity boards with debt of Rs.3.04 trillion and losses of Rs.2.52 trillion are on the brink of financial collapse. His initiatives at the power ministry included electricity for all by 2012, the Electricity Bill of 2001, accelerated power development programme and rural electrification.
“He has a knack for working diligently and quietly,” added the former government official cited above. Another person who has worked closely with Prabhu as part of his advisory group which has held around 20 meetings said, “A lot of us have told him that he was the right person in the wrong party. Now, since that has been taken care of, a lot is expected out of him.
He has been the architect of the Indian power sector reforms and was instrumental in opening up of the electricity generation and distribution sector. Had he continued, he would have revamped the sector. He will be holding an important portfolio, given his track record. ”
The advisory group headed by Prabhu has already submitted two reports on the coal and electricity distribution sector to Piyush Goyal, minister for power, coal and new and renewable energy. This comes in the backdrop of the Supreme Court’s landmark September judgement that cancelled the allocation of more than 200 coal blocks between 1993 and 2010 and provided the government an opportunity to make a fresh start and put in place a transparent rules-based regime in the allocation of coal. “There is a lot of mutual respect between the minister and Prabhu.
What distinguishes him from the others is his ability to drive consensus and being incisive. Also, not having a private agenda makes him credible,” added this person. Prabhu, who holds a bachelors degree in commerce and a degree in law from Mumbai University, is a qualified chartered accountant and is involved in nine strategic dialogues. He is married to Uma S. Prabhu, a journalist.
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