Niti Aayog wants power distribution privatised over time

The Niti Aayog on Wednesday suggested that in the long run, the Indian power distribution sector should be privatised.

"Either they perform or perish. Ruthless action is required," Niti Aayog Chief Executive Amitabh Kant said in a reference to state distribution companies (discoms) while addressing a conference here organised by the India Energy Forum.

"Everyone must pay for electricity," Kant said, adding that unless metering is done at the lowest levels, the power sector will not survive.

The Niti Aayog CEO said radical restructuring is important for the power sector to create wealth, so that people invest in it.

Underlining the need for a new ecosystem of independent electricity regulators, he said urgent steps are required to reduce discoms' aggregate technical and commercial (AT&C) losses and minimise power theft.

Meanwhile, American ratings agency Fitch on Wednesday said 2017 would be a test year for the success of the reforms package launched by India "to address the persistent financial and operating weaknesses at state-run discoms".

"Progress under this programme should give some additional breathing space to the discoms, which is important for the overall electricity off-take from the generators in India and improvement of plant utilisation levels, which are at historic lows," Fitch Ratings said in a release from Singapore.

"Fitch expects the rated Indian state utilities to have large capex requirements in 2017. This will lead to only marginal improvement in their credit metrics," it added.

--IANS

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