Addressing a press conference at the Borjhar airport here, Kumaramangalam said that the Power Finance commission will work out a schedule for proportional reduction in surcharge on power for the states which is aimed at encouraging more projects in the power sector.

The minister, who was on way to Delhi after attending the second conference of power ministers of the north-eastern states and Sikkim, which ended in Shillong on Tuesday, expressed concern at the ever-increasing financial crisis in the state electricity boards.

The Union minister said the subsidy provided in the power sector to the states was a `gift' and that the amount should be repaid.

Terming the power ministers' conference in Shillong as a `success', Kumaramangalam said that specific projects have been identified in the power sectors inthe states and the state electricity boards will be encouraged to set up these projects. Kumaramangalam said that the electricity boards suffering losses should divide their activity into heads of transmission, generation and distribution and then identify the grey areas.

During the ninth plan, he said, the projected power generation would be 30,000 mw including 6000 mw of hydel power. The north-east's share in the hydel power output would be 673 mw, he said. The minister announced that the Ranganadi hydel project would be functional by 2001.

He announced that a North-Eastern Electric Regional Commission, comprising the N-E states and Sikkim, will be formed soon for better generation and distribution of power.

An amount of Rs 200 crore would be spent by his ministry in the next five years with an aim to electrify all villages in the country.