Union power and coal minister Piyush Goyal said on Thursday that India would need $250 billion (around Rs153 lakh crore) over the next five years to provide electricity to all citizens; and the private sector would have to play a bigger role in coal production.
Investments to this amount would be needed in power generation, coal mining and electricity distribution and transmission to ensure power supply to all households in the country by 2019, Goyal said.
Pitching for investments by global companies, the minister said renewable energy would need around $100 billion and transmission and distribution $50 billion over the next 4-5 years. He gave no indication of any incentives for private companies to make such a massive investment in, what is widely regarded by foreign investors, as a notoriously business-unfriendly India.
''This government is sincere in giving power to all and will protect investments as we go forward,'' he said.
The country's total power consumption will double to 2 trillion units by 2019 and the bulk of investments will come from the private sector although the government will invest more, he said at the India Economic Summit organised by the Geneva-based World Economic Forum and industry chamber CII.
India has 53 million homes that do not have access to electricity and many businesses depend on generator sets, putting avoidable pressure on both oil imports and the environment.
''This latent demand of 53 million homes and businesses put together, along with growing industrialisation, will double the requirement of power in the next five years. To meet the demand, we have to increase the utilisation of existing assets, sort fuel supply problems and improve the electricity mix by adding alternative energy sources,'' Goyal said.
He said Coal India Ltd was expected to double its production to around 1 billion tonnes by 2019. Boosting Coal India's output, increasing private sector engagement and rationalising gas prices will get priority, he said.
''In the years to come, the private sector will play an important role in the production of coal. Also, we are not leaving Coal India to its problems. We are addressing the issues and I see the production of Coal India doubling in the next five years,'' Goyal said.
The coal ordinance to auction blocks through an electronic platform was cleared by the cabinet last month. It followed a Supreme Court's order quashing 214 coal blocks allocated to various companies since 1993.
Pointing out the advantages of solar power, Dong-Kwan Kim, managing director of Korea's Hanwha Group, said if the government could provide a stable regulatory environment, ''investors are ready to flock to India''.
Goyal said the Centre had been looking to resolve the inverted duty structure that hurt manufacturers in the solar energy sector.
Domestic players want this structure to go as it results in finished goods being taxed at rates lower than imported raw materials.