Power on the blink in many states

As per the annual economic survey of 2007, besides not meeting the target of additional power generation in last two successive five-year plans, state power institutions as well as electricity boards incurred record losses in 2006-07.

OVER THE years it has been noticed that the central government could do little to ensure that the state electricity boards fall in line with the provisions of Electricity Act and start implementing reforms in the power sector.

The center also took an initiative by signing a memorandum of understanding (MoU) with certain erring states so that power reforms can be implemented there. As per the MoU, center agreed to share the cost to be invested in power reforms. Also, in recent budget, Finance Minister Mr. P. Chidambaram increased the allocation under the Accelerated Power Development and Reforms Project with an aim to reduce the total technical and commercial losses.

As far as power sector is concerned Maharashtra and West Bengal seem to be in deep trouble. However, Andhra Pradesh, Karnataka and Tamil Nadu are trying their best to buy additional power so that they can meet the projected peak demand in the summers.

In fact some of state electricity boards are thinking on the lines of purchasing power at a three times higher rate. So, because of expensive power purchase and transmission and distribution losses their losses have gone up to Rs. 26,000 crore by 2006-07

The recent report submitted by Ministry of Finance on the development of Mumbai to make it an international finance center, suggested that in Mumbai there is need to raise the standard of governance. So, it is high time that Maharashtra government woke up to this reality.

The scenario in Kolkata is also not so different. Basic infrastructure as per international acceptable standards is not in place. In this regard recently Asian Development Bank offered loans. I suggest central government should also pitch in with additional finances so that power scenario can be improved in the city.

As per the economic survey, several reasons including insufficient supply of coal and other raw material are hampering the power generation in various states. Because of fuel scarcity, most of the gas-based power plants, especially in a state like Andhra Pradesh, are not generating electricity this year.

Survey mentioned that India’s installed capacity for power is 1,28,432MW, out of which nearly 55 per cent comes from the states (over 71,000 MW), over 33 per cent comes from the central sector undertakings and just 10.9 per cent comes from the private sector.

OVER THE years it has been noticed that the central government could do little to ensure that the state electricity boards fall in line with the provisions of Electricity Act and start implementing reforms in the power sector. The center also took an initiative by signing a memorandum of understanding (MoU) with certain erring states so that power reforms can be implemented there. As per the MoU, center agreed to share the cost to be invested in power reforms. Also, in recent budget, Finance Minister Mr. P. Chidambaram increased the allocation under the Accelerated Power Development and Reforms Project with an aim to reduce the total technical and commercial losses. As far as power sector is concerned Maharashtra and West Bengal seem to be in deep trouble. However, Andhra Pradesh, Karnataka and Tamil Nadu are trying their best to buy additional power so that they can meet the projected peak demand in the summers. In fact some of state electricity boards are thinking on the lines of purchasing power at a three times higher rate. So, because of expensive power purchase and transmission and distribution losses their losses have gone up to Rs. 26,000 crore by 2006-07 The recent report submitted by Ministry of Finance on the development of Mumbai to make it an international finance center, suggested that in Mumbai there is need to raise the standard of governance. So, it is high time that Maharashtra government woke up to this reality. The scenario in Kolkata is also not so different. Basic infrastructure as per international acceptable standards is not in place. In this regard recently Asian Development Bank offered loans. I suggest central government should also pitch in with additional finances so that power scenario can be improved in the city. As per the economic survey, several reasons including insufficient supply of coal and other raw material are hampering the power generation in various states. Because of fuel scarcity, most of the gas-based power plants, especially in a state like Andhra Pradesh, are not generating electricity this year. Survey mentioned that India’s installed capacity for power is 1,28,432MW, out of which nearly 55 per cent comes from the states (over 71,000 MW), over 33 per cent comes from the central sector undertakings and just 10.9 per cent comes from the private sector. The central government had an ambitious plan of adding 40,000 MW capacity in the Ninth Plan and another 41,000MW in the Tenth Plan. However in the previous plan capacity addition was just 50 per cent and a net addition of about 23000MW during the Tenth Plan period means a shortfall of 43 per cent. With more states looking at the center and central sector undertakings for power supply, the center and its power corporations have launched several schemes recently. The latest is ultra mega power projects, two of which have been awarded already and two more are yet to be tied up. If the government wants to meet the power needs of the growing economy and its people, they will have to substantially increase the power generation capacity, cut down the transmission and distribution losses drastically and will have to unbundle the power utilities.