India shortages hurting industry

India shortages hurting industry

The electricity shortage in India has reached a critical point, beginning to adversely affect investments under the free-market reform program.

The annual Economic Survey, released this spring, stated, “The recurring power failures even in the capital city of Delhi this winter underline the critical nature of the power problem throughout the country.”

India needs investments worth (US)$79 billion to ease power shortages.

According to the survey, India added only 14,799 MW in generation capacity during the first four years of its Eighth Five-Year Plan, which ends this year. The original projection for the period was 30,858 MW.

The survey noted several reasons for the shortfall, including a shortage of funds, equipment, land acquisition, territorial disputes, disturbed conditions at plant sites and contract failures. The government is working on a strategy to ease the power shortage, to include more private capital and restructuring of inefficient state-run distribution utilities.

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