Growth challenges in the Indian power sector: Trends and policy Issues

Abstract

The energy is a prime mover for growth of an economy. The human well being and economical well being is dependent on the level of electrification in the particular geography. Since independence, the Indian power sector has registered significant progress. Hydro-power and coal based thermal power have been the main sources of generating electricity. Nuclear power development, which was introduced in late sixties, is remained on slower track. Electricity generation capacity with utilities in India had grown from 1713 MW in December 1950 to about 163669.80 MW1 (as on 31 July 2010). The per capita consumption was remain abysmally low and is far below any world standard. Indian government has come up with many lucrative schemes and policy to give a pace in power sector. They have opened the door for private players with many bounties, but still India has not seen “Power for all” as reality. The report has critically analyzed the various policies and recommend for the changes wherever necessary and plausible. The report is focusing on Indian power policies in general and rural electrification in general. The report is teethed with statistical and qualitative arguments for rural electrification. It determines the necessity of rural electrification for the overall growth of nation and development of its citizen. 70% of India is counted as rural and any policy designed to provide superficial lucrative benefits backed by short term political gain by considering rural people and rural geography as secondary target for development can lead our nation into track of gloomy economic condition in long run. The report has statistically proved the relationship between Gross Domestic Product (GDP) and extent of electrification. Through which, it has provided a strong structure to build the report for need for rural electrification. The report thoroughly analyzed the rural electrification schemes, incentive schemes, governing and monitoring mechanism, and loop holes in the policy structure which has acted as bottleneck in the implementation of particular policy and hampering the pace of development. Further, the report goes beyond policy & structural issues and suggested a framework which will create a breeding ground for policy to bear fruits of success and bring development in the geography with given resources and directives. Finally, the report concludes with the possible and plausible recommendation for the sector. The recommendation is based on the through literature review of existing policies of nation and policy structure in various other developing and developed countries.