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Tuesday, Feb 28, 2006


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Concern over power sector

Our Bureau

New Delhi , Feb. 27

Painting a gloomy picture of the country's beleaguered power sector, the Economic Survey estimates the overall losses to the economy on account of the sector at a massive Rs 3,00,000 crore.

Faster reform initiatives, ensuring adequate fuel supply and putting in place suitable policy packages are among the measures suggested in the Survey to bail out the sector.

With peaking shortages of around 12 per cent and average shortage of about 8 per cent, the country is estimated to have lost about 50 billion units or a massive Rs 15,000 crore in foregone generation alone during the current financial year, the Survey for 2005-06 said.

"The Power scenario in the country continues to be a matter of concern.

The simplistic assumption of 5 per cent power-intensity of aggregate output in the economy yields a supply-multiplier of 20 and an associated GDP loss of Rs 3,00,000 crore," the Survey, which was tabled in Parliament today, said.

According to the Survey, the electricity generation during April-December 2005-06 grew by 4.7 per cent to 458.6 billion units.

This was not only less than the annual target of 5.8 per cent but also lower than the 6.5 per cent growth achieved in the same period last fiscal.

The slowdown in generation has been attributed partly to the ongoing coal and gas supply crunch, which resulted in a growth of only 1.4 per cent in thermal power generation.

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