Montek Ahluwalia supports privatization of power distribution

The Deputy Chairman of Planning Commission, Montek Singh Ahluwalia, on Friday pitched for privatization of power distribution, saying it could help in reducing humungous losses being incurred at present.

"The present position is out of the total electricity distribution in the country, only four percent is through the private sector suppliers. I personally don't see why over a 10 year period, maybe this four percent should go to 50 percent. I don't necessarily expect it over 100 percent," he said.

Commenting on whether privatization could help the sector recover losses, Ahluwalia said that a significant increase would not harm the industry.

"I do not see any reason why we shouldn't experiment. If we are happy to have transmission being done by private sector, generation 50 percent private, there is no logical reason why distribution should not be also done significantly, I am not saying 100 percent, but significantly. At the moment is four percent," he said.

Ahluwalia also suggested privatization in the sector either directly or through the franchisee by Indian states.

He further said that the distribution sector is a weak part of the power sector and problems related to it need to be addressed cautiously.