India economic issues in the power sector

.Economic growth in India depends critically on the development of the power sector. As the rest of the Indian economy expands demand for power grows roughly twice as fast and, because power is relatively capital intensive, its share in total fixed asset formation is increasing rapidly.

The institutional structure of the electricity supply industry is complex. The Ministry of Energy in the Government of India, and the Central Electricity Authority - the technical arm of Central Government for the power sector are responsible for broad issues of policy, planning and other matters affecting the power sector at the national level. In addition there are two new generating companies at the Center, the National Thermal Power Corporation and the National Hydro-electric Power Corporation, which are planned to grow into important wholesalers of power in the coming years. The Atomic Power Authority, reporting to a separate Ministry of Atomic Energy, is responsible for all commercial nuclear power generation in India. The Regional Electricity Boards, standing between the Center and the States, have begun to coordinate operations among the utilities within their regions.. The most important agencies in the power sector are the State Electricity Boards, which own and operate three-quarters of the Indian power system.

Consumption: The demand for power has increased rapidly over the last two decades. Most of the increase has originated with industry, both because of industrial growth and increases in the intensity of power use in the industrial sector. Agricultural demand for power has in fact grown more rapidly than industrial demand but, starting from an almost negligible base, it still constitutes only a modest fraction of total demand.

Not only has there been a change in the composition of power demand among sectors, but also among different areas of the country. As the Western Region industrialized more rapidly than the Eastern Region, the proportion of electricity consumed in the West has risen. A similar shift in the growth of capacity is apparent. In the country at large there has been a shift in elec tricity demand towards rural areas, for industrial as well as agricultural use.

. years. Shortages of both power and energy have been pervasive for several While their exact extent is hard to measure, some States and regions clearly have been more seriously affected than others. Shortages appear to be somewhat seasonal, being most severe in the period preceding the monsoon replenishment of hydro reservoirs. There was an estimated supply shortfall of about 15% in 1977/78, and about 10% in the first 9 months of 1978/79.

Shortages fall largely on industry. Since 1968/69, downturns in the supply of electricity to industry have preceded industrial downturns by a year; while other factors such as the performance of agriculture are un doubtedly important determinants of industrial performance, electricity supply appears to be a major constraint on industrial growth.