Sluggish power sector could hit economic growth: India Ratings
India Ratings & Research, part of global major Fitch Group, also cautioned that expected investments worth Rs 1,75,000 crore in various power projects could turn into non- performing assets unless fuel issues are resolved.
"Non availability of sufficient power as well as insufficient power generation capacity addition could impact the country's overall economic growth," India Ratings & Research Director (Corporates) Salil Garg told PTI here.
For every one per cent increase in Gross Domestic Product (GDP), the power generation need to increase by one per cent.
Otherwise, there would be inadequate electricity supply that can impact not just the power sector but also other industries.
"The progress of reforms in the power sector is happening at a slow pace. The sector is expected to suffer this year (also) and investors are not likely to be enthused to put money into the sector," Garg noted.
Indian economy is projected to grow at a slower pace, in the range of 5.7-5.9 per cent, this fiscal.
India, which has an installed power generation capacity of over 2,00,000 MW, expects to add about 88,000 MW in the current Five-Year Plan ending March 2017.
The report '2013 Outlook: Indian Power', co-authored by Garg and released today, said that fuel risks -- coal and gas-- along with uncertainties about financial viability of distribution companies (discoms) remain major issues.
Huge tariff hikes -