New industrial policy may suggest listing of power distributing companies

To bring down high power cost of the industry, the new industrial policy is likely to suggest use of Aadhaar for providing subsidised electricity to farmers and poor households and listing of distribution companies to promote transparency in their operations, sources said.

The power tariff for the industry in India at about Rs 8 per unit is very high compared to that in developed countries and other emerging economies, and there is a need to bring it down with a view to promote the Make in India initiative.

The commerce and industry ministry, which is working on a new industrial policy to replace the 1991 policy, is keen to bring down the power cost to boost manufacturing as well as promote ease of doing business.

The proposed policy aims at promoting emerging sectors and modernising existing industries. It will also look to reduce regulatory hurdles and encourage adoption of frontier technologies such as robotics and artificial intelligence.

Sources said that Aadhaar-linked direct benefit transfer mechanism for providing subsidised power to agriculture sector and poor households would check pilferage in power distribution.

"These initiatives would help in rationalising cost of power for industries," they added.

Listing of discoms would bring in transparency in their operations and also force them to become more efficient, they said adding "ideally power should be charged on cost plus basis".

The new policy may also recommend rationalisation of open access charges (OAC) with a view to realise the goal of one national market for power.

The Department of Industrial Policy and Promotion (DIPP) in August last year floated a draft industrial policy with an aim to create jobs for the next two decades, promote foreign technology transfer and attract USD 100 billion FDI annually.