In line with the depressed projections of economic growth, the Planning Commission on Wednesday lowered the target for power capacity addition during the 12th Plan period ending March 2017 to 88,000 Megawatt (Mw) from 100,000 Mw set earlier. Also, state power ministers raised concerns over 55 of the 89 thermal power generating units running on low capacity.
Every one per cent increase in Gross Domestic Product (GDP) requires power capacity to grow by 0.9 per cent in India. Power is one of the eight core infrastructure sectors, which have a combined weight of 38 per cent in the Index of Industrial Production (IIP).
“Now that we are realistically thinking of lowering the 12th plan GDP growth target to 8-8.5 per cent, the overall target for power generation capacity is also expected to be brought down,” Planning Commission deputy chairman Montek Singh Ahluwalia said, after a meeting of state power ministers.
The meeting noted 55 power plants were currently unable to run on full capacity owing to coal shortage. India currently has 89 thermal power generating units.
The deputy chairman also pitched for ramping up coal imports by CIL during the five-year period raising doubts over the state-owned miner Coal India Ltd’s ability to meet the entire domestic requirement alone. He said the commission was in favour of price pooling of the imported coal quantity. The pooling proposal will be mentioned in the 12th Plan document.
He also asked states to increase electricity charges and use power subsidy to improve essential services like drinking water, education and health. "This situation can be handled through a combination of tariff increase and serious efforts to reduce Aggregate Technical and Commercial losses."
On the issue of Fuel Supply Agreements with power companies, Power Secretary P Uma Shankar called for Coal India to commit supply at 80 per cent of the contracted quantity in new pacts.
Meanwhile, Rajasthan, Andhra Pradesh, Haryana, Punjab and some other states aired differences with the Centre's proposal for debt restructuring of state power distribution companies.
These states, including Rajasthan, Andhra Pradesh, Haryana and Punjab, said they were particularly opposed to a proposal under which half of Rs 120,000 debt will be met through bonds issued by DISCOMs backed by a guarantee of the state concerned.