Andhra’s Data Centre Policy Faces Legal, Fiscal Questions

Ah, marvellous. Andhra Pradesh has discovered the most efficient way to power a data centre: simply declare yourself exempt from the awkward business of wiring the grid, and hope no one notices until the ribbon is cut. The state's proposed Deemed Distribution Licence would let facilities like the Google-Adani cluster in Visakhapatnam become their own power distributors — which translated from policy-speak means they get to cherry-pick the cheap electrons and leave the rest of us paying for the substations. Legal and fiscal scrutiny has of course arrived, ahead of schedule, like a power cut during a heatwave. Naturally, the state's answer to awkward questions about electricity law is to propose a new kind of deemed: deemed lawful, deemed prudent, deemed nobody's business but Google's and Adani's.

The cleverness is almost painful. By 'deeming' a private data centre a distributor, the government sidesteps the messy question of what electricity law actually permits — after all, why amend a law when you can just declare the problem away? Regulators, discoms and consumer advocates are presumably sharpening their court filings even as the ribbon-cutting photos are being staged, because the one thing everyone in power infrastructure loves more than money is a precedent that lets the next fellow skip the queue. The Adani-Google alliance must be delighted: a captive power supply, a compliant state, and the bill forwarded to the hapless citizen. It is, frankly, a masterclass in privatising profit and socialising substations.

And what of fiscal prudence? When private data centres are allowed to self-supply, the public utility loses a large industrial consumer — the very cross-subsidy that keeps residential tariffs quasi-affordable. So the state's AI ambition becomes a transfer of wealth upward, dressed in the language of 'ease of doing business' and 'data centre growth.' Somewhere, a bureaucrat is drafting the next deemed licence: perhaps one allowing data centres to deem themselves exempt from taxes, or one deeming the entire state budget a promotional expense. At least then the robbery would be honest. One might even deem it progress.