Govt Expects Private Sector to Contribute About 40% of 12th Five Year Plan in Power Sector: Shri Shinde at Canada – India Roundtable
Inviting Canada to be partner with India in its adventure towards Power Sector reforms, Union Power Minister, Shri Sushil Kumar Shinde has said India’s power sector presents an opportunity for investment in all its segments as we seek to not only put in greater capacities but also strive to indent the latest technologies across the board. Besides the power plants, there are tremendous opportunities in high voltage transmission, distribution, smart grids, energy efficiency etc. The funding requirement for the 11th Plan (2007-2012) is almost US $ 230 bn. Encouraging foreign investment, Shri Shinde observed that in India, power sector has a regulatory regime which is quite independent of government and tariff setting falls within the regulatory jurisdictions. Shri Shinde was speaking at Canada – India Roundtable at Carleton University, Ottawa, Canada on 17th September, 2010, organised by the Carlton University and Canada Council of Chief Executives (CCCE) .
Mentioning about India’s special relationship with Carlton University Shri Shinde appreciated setting-up of Canada-India Centre for Excellence in Science and Technology, Trade and Policy in the university. He congratulated Ms. Roseann O’ Reilly Runte, the President and Vice-Chancellor of Carlton University for this significant achievement.
The Minister observed that eradication of poverty and improvement of living standards for the great mass of our population is the primary task before the Indian Government. However, the Programmes and Schemes initiated by the Government for poverty alleviation would have limited success without rapid and substantial improvements in infrastructure. And power is one of the most crucial components of the infrastructure.
Shri Shinde pointed out that India has one of the largest installed capacities for power generation in the world, still, it is woefully inadequate to meet the growing needs of the economy. With over 163 GW, the per capita consumption of electricity remains approximately 700 kwh per capita and over 40% of our population lacks access to electricity. Growth projections for the Indian economy would come to naught if we are not able to push our capacities for power generation to a much higher level.
Highlighting the various measures adopted by the government in the Power Sector, Shri Shinde said that the Electricity Act 2003 provided the policy framework for expansion of Indian power sector. The National Electricity Policy, Tariff Policy provided a far more conducive environment for fresh and higher commitments in this sector. The reform measures were enthusiastically responded to by the private sector. We are today placed at a point where we are expecting the private sector to contribute almost 40% of the 12th Five Year Plan in areas of capacity addition, said the Minister.
The new liberal policy adopted by the country has done away with the restrictive licensing regime and now 100% FDI is permitted in all segments of the power sector including power trading. The private sector’s confidence, which had been shaken in the aftermath of the Enron imbroglio, has not only been restored but is actually now quite strong. This is reflected in the heavy investments that are taking place.
The Government of India is also seeking to address the long standing problems in the distribution area through a programme called Restructured Accelerated Power Development and Reform Programme. This programme seeks to rectify the very heavy aggregate and technical losses that plague the sector. To make them more efficient, most of the State Electricity Boards have been re-structured. Attempts are being made to provide access to large parts of the population. The programme called, Rajiv Gandhi Grameen Vidyutikaran Yojana seeks to electrify all unelectrified villages by 2012 and also take up intensive electrification in rural areas, the Minister noted.
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