Shortage of electricity in Pakistan over the last many years has adversely affected the economy of the country and welfare of its people. In a latest policy paper titled "Electrification and Household Welfare" prepared by the World Bank, lack of reliable access to electricity in Pakistan was conservatively estimated to cost the economy dollar 5.8 billion or 2.6 percent of GDP in a year. The report further states that there is no consensus on the access rate of electricity in Pakistan. The official estimates based on household surveys suggest that about 5 million people remained off-grid in 2016 but data from a 2017 census leads to an estimate that is almost 10 times as high: almost 50 million people constituting 36 percent of the population. Based on the latter figure, the annual income gain could reach dollar 5.7 billion a year if the entire off-grid population was connected to the grid. Improving the reliability of electricity could even add to these gains. It was further assumed that average load shedding was reduced to six hours a day in fiscal 2015. With an estimated income loss of 1.6 percent associated with every hour of daily outage, rural households would reap another dollar 3.9 billion in annual income gains if electricity was provided 24/7. The actual access rate to electricity in Pakistan is very much up to debate, however, but it is generally believed that a large share of population continues to live without electricity 24/7. The number of connections reported by the utilities suggests that access to grid electricity was only about 74 percent in 2016 (90 percent in urban areas and 63 percent in rural areas). A household survey sponsored by the IFC suggests that 35 percent of Pakistan's population lacked access to electricity in 2014 and that the access rate in parts of the country was alarmingly low.

We feel that the World Bank has done a commendable job in estimating the access rate to electricity and the loss to the economy due to the non-availability of electricity. In particular, it was very difficult to estimate total cost to the economy due to lack of electricity and that is why most of the analysts talked about the subject in general terms and not in a precise manner. Moreover, it is more than evident that electrification status does not only affect economic gains or growth rates but is also associated with a broad range of other benefits, including income and expenditure, better health outcomes for children, improved school enrolment and increased women's labour force participation. It may be stated, however, that though all these benefits from expanding and improving electricity supply are important but not all of them can be quantified in monetary terms. Pakistan could of course increase reliable access to electricity by continuing to expand the electric grid and by developing alternatives to grid electricity, especially given that Pakistan has a large potential for renewable energy from wind, solar and hydropower. Besides, Pakistan would require to adopt energy sector reforms by addressing inefficiencies in the allocation and distribution of natural gas, increasing fuel efficiency in electricity generation, reducing losses in transmission and distribution of electricity and correcting pricing issues in the electricity market.

Keeping in view the importance of provision of electricity, the previous government had accorded top priority to electricity generation and reduced power cuts to households and industry in its tenure. As a result, installed capacity of electricity was raised to 29,573MW by February 2018 as compared to 22,812MW in 2012-13, thus posting a growth of 30 percent. This was not a small achievement but much more needs to be done to ensure ample supply of electricity which is very important for employment generation, promotion of exports and accelerating growth. In addition, the prolonged load shedding of electricity makes the youth of the country angry and frustrated, thus affecting their efficiency and quality of products. In certain cases, there has been agitation on streets. Hopefully, the present government would also continue to focus on additional generation and distribution of electricity though its emphasis on building dams is an indicator that it may be more interested in increasing the availability of water than early provision of electricity.

Copyright Business Recorder, 2018