The Indian Budget 1996-97 The Indian Economy Overview

IN DEPTH: Indian Power Industry

[Indian Power Industry] [Related Pages: 1 2 3 4 5 6 7]

New Strategies in Indian Power Sector

The new United Front coalition government in India will face a dark future due to serious power crises unless steps to resucsitate the electrical power generation industry are taken with renewed vigor.

Technically, every village in India is wired up. Insufficient power generation makes that an empty boast.
One of the few political issues on which all parties contesting recent elections could agree was the need to encourage investment, especially in infrastructure. And with good reason. India is plunging head-long towards an energy crisis that will cripple the country's burgeoning economy if government does not act fast.

As part of India's five-year-old economic reform plan, the energy sector was recently opened up to private investments. The new power policy assured, among other things, a 16 percent rate of return, protection against currency fluctuations and committed buy back arrangements.

The previous Congress government had sanctioned eight multi-million dollar "Fast Track" power projects, bypassing the usual red tape and avoiding the years of international tender notices and political horse-trading.

Though the new United Front government has promised to honor the power deals made by the previous Congress administration, this government already has some other heavy financial commitments of its own.

In the meantime, the government and the state-owned power sector have no alternative but to look for ways of increasing the efficiency of the existing electricity generating capacity. The World Bank's support in this regard may be the the turning point.

One of the major factors bogging down electricity generation in India is the irregular availablilty of fuel for thermal power stations. Both petroleum and coal based plants are suffering from this malady, primarily due to insufficient transportation infrastructure and, in the case of coal, non-optimal utilization of available natural resources. Steps must be taken on a war footing to counter these lacunae.

On the consumer management side, the government has facilitated the restructuring of the State Electricity Boards with the help of the World Bank.

[Indian Power Industry] [Related Pages: 1 2 3 4 5 6 7]

Parosh Buragohain is an expert commentrator on the Indian infrastructural sector in local and foreign print media.

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