Power sector to influence economic growth: Montek

Soaring crude oil prices and rising inflation will be hurdle for India in achieving the proposed economic growth, said Deputy Chairman of Planning Commission Montek Singh Ahluwalia.

Unless the problem in power sector sorted out, the economic growth will adversely affect the country’s economic policies, he said after releasing a Mckinsey report titled “Powering India, the road to 2017” on Monday.

Currently the losses in the power sector stood at a high 35 percent and the state governments need to take measures to reduce the AT&C losses, he said. However, the report indicates that AT&C losses could be brought down to 15 percent by 2017, he added.

The McKinsey report has introduced the ten-point programme to make Indian power sector vibrant. The programme aims to address—viability and market risks, slow pace of capacity addition, inadequate fuel supplies and operational inefficiencies.

The report has suggested that a focused distribution sector reforms could reduce AT&C losses to 15 percent by 2017. Incidentally, the government planned to achieve this targeted by the end of 10th Plan period ending 2007. It has also suggested creation of a well functioning wholesale market for power trading.

Introducing differential peaking tariffs will supplement in improving market mechanisms, the report has said. “Prepare and bid over 140 project sites by 2012, with end-to-end approvals in place,” the report has suggested.


Source:
http://www.commodityonline.com/news/topstory/Power-sector-to-influence-economic-growth-Montek-10145-3.html