Column : At an inflection point
“Inflection points: They represent, in my description of it, what happens to a business when a major change takes place in its competitive environment. A major change due to introduction of new technologies, a major change due to the introduction of a different regulatory environment. The major change can be simply a change in the customers’ values, a change in what customers prefer. Almost always it hits the corporation in such a way that those of us in decision making position are among the last ones to notice.”
—Andy Grove, former chairman & CEO, Intel
After nearly a decade of rapid growth marked by reform, buoyancy and investment, thoughts of pessimism in India’s power sector are nearly the same as they were a decade ago when the growth phase started. Questions about the financial health of distribution companies are not very different from what were asked a decade ago. This time, the additional survival questions have emerged on fronts of fuel availability, land acquisition and also on environmental issues.
The Economic Survey 2010-11 highlights that India currently has some of the lowest and most uneconomic average electricity tariffs at retail levels in the world, which are around 50-150% lower than the tariffs in the countries much better endowed with coal or gas energy. As per a study by Crisil, power tariffs in India in the five years ended FY10 grew at an annual rate that was virtually half the
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