Delhi: The Economic Survey released has asked the
government to push for reforms in the power sector and
payment of user charges. The survey stated that such improvement
in distribution alone could push the economic growth by
1.5 per cent.
in the power distribution area alone could account for
over 1.5 per cent of GDP of the fiscal correction,
the survey said while emphasising the need for increased
privatisation in the distribution sector.
the example of privatisation of the distribution sectors
in Delhi and Orissa, the survey hoped these companies
would emulate the success of private sector distribution
in Mumbai, Kolkata and Ahmedabad, but said: The
success would impinge upon effective enforcement of user
Reliance controlled BSES Ltd and Tata Power are distributing
power in different regions in Mumbai and Orissa (BSES).
These companies recently acquired distribution circles
in Delhi too.
to senior power sector analysts with SBI Capital Markets,
it is estimated that the SEBs are making an annual loss
of Rs 40,000 crores due to poor transmission and distribution
network and issues related to bill collection. The privatisation
of distribution has been proved successful in many parts
of India and has helped reduce the losses of SEBs considerably.
The survey however pointed out that once reforms in transmission
and distribution were in place, it would not be difficult
to elicit private investments in generation.
it said that the key bottleneck faced today lies in the
enforcement of user charges in distribution. It added
that if the power sector could work in a reliable manner,
it would serve to increase the efficiency of capital utilisation.
to a BSES spokesperson, the government should formulate
policies for the strict enforcement of user charges and
to prevent theft. These two issues are the major concerns
of the industry.
government has drawn up an ambitious programme to address
the problems entailing new generation capacity of 100,000
MW (which would roughly double the existing generation
capacity), and substantial investments in transmission
and distribution. According to the survey, the total fund
requirement to achieve this would be Rs 800,000 crore.