Power On The Blink In Many States

The annual economic survey of 2007 has painted a grim picture of the power sector as it stood at the end of the 10th Plan. Not only has the target for generation of additional power generation as well as capacity installation been missed in two successive five plans, it is a matter of serious concern that the losses incurred by state power institutions and electricity boards have recorded a fresh record in 2006-07. A significant share of the cost of effecting these reforms can be met by the Centre, under the Memorandum of Understanding. Also, Finance Minister Mr. P. Chidambaram in the 2007-08

budget has stepped up the allocation under the Accelerated Power Development and Reforms Project in a bid to reduce the aggregate technical and commercial losses.

A recent Ministry of Finance report submitted on development of Mumbai to make it an international finance centre has suggested that the city's governance should change from the current third world standards to first world, to make that IFC status possible. Amongst other things the deficiencies in Mumbai include poor provision of power, water and sewerage. It is high time the Maharashtra government woke up to this reality. A perusal of the economic survey would indicate that power generation in many states seems to have been hampered for several reasons like coal linkages and availability of the raw material remaining a problem. The government hastens to admit and explain that though state utilities are battling with this problem, the Union coal and power ministries are also addressing this problem. The Survey estimated the generation losses from April to October 2006 due to gas supply shortages at 18.43 million units. To meet their requirements of coal, the state electricity boards would have to import 7.4 million tonnes in this financial year.

India has an installed capacity for power at 1,28,432 mw, out of which nearly 55 percent comes from the states (over 71,000 mw), over 33 percent from the Central sector undertakings and just 10.9 percent from the private sector. There were ambitious plans to add 40,000 mw capacity in the Ninth Plan and another 41,000 mw in the Tenth Plan. While the capacity addition in the previous plan was just 50 percent, it would be a net addition of more than 23000 mw during the current plan period, a shortfall of 43 percent.

With more states looking to the Centre and central sectoral undertakings for power supply the Centre and its power corporations have launched several schemes – the latest approach being ultra mega power projects, two of which have been awarded already and two more to be tied up later. If the objective is to meet the power needs of a growing economy and its people, the only way out to achieve it is to substantially increase the generation capacity, target subsidies, unbundled the power utilities and drastically cut down transmission and distribution losses.