Failing the power sector
Apropos of the edit “And the lights all went out (July 30) makes a very serious point—merely adding capacity without viable utilisation is meaningless. As per Central Electricity Authority data, India’s thermal power plant load factor (PLF), a measure of the utilisation of a power plant, slipped to 59.43% in June—its lowest in over a decade. In the same month, a year ago, thermal power PLF stood at 68.01%. The capacity lies idle due to lack of buyers at a time when almost one-third of the population does not have access to electricity. Subdued demand, an indicator of sluggish growth in the industrial sector, portends mounting problems for the developers of projects that have been commissioned in the last five years and the lenders who extended loans to them. For an economy that is ostensibly on the mend, an almost flat demand curve for electricity—a key indicator of whether an industrial revival is underway—and 57 thermal power producers across the country that are shut down due to lack of demand even in peak summer continues to belie an industrial revival story. India’s per capita power consumption stands around at just 940 kWh, much lower than that of China’s 4,000 kWh. India has installed power generation capacity of 2,49,488 MW. But the daily generation is only to the tune of 1,35,000 MW, much lower than what is desired to develop the country into an industrial hub. To add to woes, transmission and commercial (AT&C) losses are to the tune of 26% of generation. The power ministry has to address this issue instead of making tall claims about power generation. The reluctance on the part of politicians to hike electricity tariffs is not sustainable and the present position does not augur well for power sector.
Keep RBI independent
Apropos of the column “The proposed Indian Financial Code: Venturing into an unknown territory” (July 30), in entwined global economies of today, central banks the world over must work on a global canvas with domestic economy as the running theme. A consummate grasp of economic fundamentals underscored by prudence and patience is vital to link global and endemic economic indices to then operate corrective levers. The likes of RBI constantly try to upgrade that wherewithal and yet stay insulated from transient political exigencies. A case in point is the nationalisation of PSU banks over which debates are still on even after decades of this happening. RBI’s pedigree kept our economy insulated from the crises of the US, the eurozone and can be expected to counter more of these should they occur when nations ignore basic economic postulates.
R Narayanan, Ghaziabad
Please send your letters to:
The Editor,The Financial Express, B1/B, Sector – 10, Noida – 201301. Distt: Gautam Budh Nagar (U.P.).or e-mail at: email@example.com or fax at Delhi: 0120-4367933