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India power sector needs “sweeping reforms”: World Bank
June 24, 2014, 9:29 am

 

 An Indian cycle rickshaw puller drinks water on a hot day in Allahabad, India, Saturday, June 7, 2014. Thousands of people enraged by power cuts during an extreme heat wave have been rioting across northern India, setting electricity substations on fire and taking power company officials hostage, officials said Saturday [AP]


An Indian cycle rickshaw puller drinks water on a hot day in Allahabad, India, Saturday, June 7, 2014. Thousands of people enraged by power cuts during an extreme heat wave have been rioting across northern India, setting electricity substations on fire and taking power company officials hostage, officials said [AP]

Underlining the tough challenge the new Indian government faces, a new World Bank report has said electricity distribution to the end consumer in India needs urgent reform if India is to scale back to high economic growth.

“Power distribution in India needs sweeping reforms if it is to bring back the country to a high growth trajectory and meet its goal of expanding access to electricity to all by 2019′, the Bank report released on Tuesday said.

India, which faces some of the world’s biggest blackouts, needs to free utilities and regulators from external interference and enhance competition in the sector, said the World Bank. More than 300 million people in India still lack electricity.

India’s annual per capita power sector consumption is at around 800 units, which is among the lowest levels in the world, says the World Bank’s latest report “More Power to India: The Challenge of Distribution”.

The study has identified electricity distribution to the end consumer as the weak link in the sector although official data shows peak deficit is down to 5.4 per cent from 16.6 per cent in 2008.

Total accumulated losses in the sector stood at $25 billion in 2011.

These losses are concentrated among discoms and bundled utilities – State Electricity Boards (SEBs) and the State Power Departments, the report said.

“Revitalising the power sector by improving the performance of distribution utilities, and ensuring that players in the sector are subjected to financial discipline is the need of the hour,” said Onno Ruhl, World Bank Country Director in India.

Indian Minister Piyush Goyal, in charge of power, coal and renewable energy, met with top executives of some of the largest financiers of the power sector on Monday to assess the power crisis.

“I am told that the stress on financial institutions is not as bad as it is made out. Power is the need of the hour and personally I feel that utilities are good assets as market has demand for what they are going to provide,” Goyal was quoted by Indian daily Economic Times.

 

TBP and Agencies

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