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| Indicus Analytics: India's dark realities |
| India will remain a power-deficit country for many many years |
| Indicus Analytics / October 14, 2010, 0:13 IST |
Electricity, or rather the lack of it, is one of the biggest constraints on India’s growth. To begin with, connectivity continues to be an issue in rural areas. As of August 2010, more than 90,000 villages (around 15 per cent of the total) remain un-electrified; there are still two years to go for universal rural electrification according to the target set by the Rajiv Gandhi Grameen Vidyutikaran Yojna launched in 2005. Twelve states have 100 per cent rural electrification — Andhra Pradesh, Delhi, Goa, Haryana, Kerala, Punjab, Tamil Nadu, Chandigarh, Dadra & Nagar Haveli, Daman and Diu, Lakshadweep and Puducherry, and in nine states, more than 90 per cent of the villages have been electrified. An outlier is Jharkhand, the only state with less than 50 per cent rural coverage. Currently hit by a multi-crore scam in its rural electrification project, it’s unlikely that this state will get its act together soon. While more than 20,000 villages remain un-electrified in Jharkhand, states with more than 10,000 villages to be covered are Orissa, Bihar, Rajasthan and Uttar Pradesh.
Having a connection, however, is not the end of the story. Urban and rural India reel under power cuts all year round, which are severe particularly during the summer months. Latest data for the period April-August 2010 reveal a deficit of close to 14 per cent of the peak demand; in six states — Jammu and Kashmir, Bihar, Meghalaya, Uttarakhand, Maharashtra and Madhya Pradesh — the deficit of peak demand exceeded 20 per cent. The problems, of course, lie in both generation of sufficient power and the distribution systems. Capacity has lagged demand for long; during the last three plans, barely half of the targeted capacity was installed and with two years to go for the current plan to end, the government has already scaled down its power generation target to 62,000 megawatts (Mw) from 78,700 Mw. Since the 2003 Electricity Act, there have been many reforms opening the sector to private players. Though private sector interest has been high, hurdles remain in the form of land acquisition, red tape, power equipment shortages, the monopoly of Bharat Heavy Electricals Ltd., fuel linkages and so on.
Having a connection, however, is not the end of the story. Urban and rural India reel under power cuts all year round, which are severe particularly during the summer months. Latest data for the period April-August 2010 reveal a deficit of close to 14 per cent of the peak demand; in six states — Jammu and Kashmir, Bihar, Meghalaya, Uttarakhand, Maharashtra and Madhya Pradesh — the deficit of peak demand exceeded 20 per cent. The problems, of course, lie in both generation of sufficient power and the distribution systems. Capacity has lagged demand for long; during the last three plans, barely half of the targeted capacity was installed and with two years to go for the current plan to end, the government has already scaled down its power generation target to 62,000 megawatts (Mw) from 78,700 Mw. Since the 2003 Electricity Act, there have been many reforms opening the sector to private players. Though private sector interest has been high, hurdles remain in the form of land acquisition, red tape, power equipment shortages, the monopoly of Bharat Heavy Electricals Ltd., fuel linkages and so on.
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