Power-sector outlay in Ninth Plan flares up

As far as the revised estimates are concerned, outlay for the centre sector has been stepped up to Rs 59,924.96 crore from Rs 54,544.47 crore envisaged earlier. The budgetary support for the power sector during the plan period has been enhanced to Rs 20,469.54 crore from Rs 18,149.54 crore proposed earlier.

However, the outlay for state sector power projects has been retained at the proposed level of Rs 71,227.00crore.

The capacity addition during the first year (1997-98) of Ninth Plan worked out to be 3,286.3 mw and during the current year the addition has been estimated at 3,299.3 mw. The capacity addition projected for the next fiscal (99-00) would be of the same order. However, as per the plan projections, additional capacity would substantially go up to 8,046.2 mw in penultimate year and finally in the terminal year it would be of the order of 22,298 MW.

Significantly, during 1997-98, the capacity addition from the centre sector was only 333 mw and has been pegged at only 191.3 mw in the current fiscal. The bulk of the capacity addition was from the private sector amounting to 1,527.3 mw in 1997-98 and 1,830 mw in the current fiscal. The contribution of the state sector was 1,426 mw in the previous financial year and 1,278 MW has been estimated for current fiscal.

As the envisaged capacity addition during the Ninth Plan period at 40,245 mw would be less than the working group’s recommendation of 50,622 mwbecause more was not feasible given the resource constraints, the Planning Commission has estimated that the additional requirement during the Tenth Plan would be of the order of 56,000 mw. Based on the past experience and assuming the requirement of Rs 4.5 crore per mw, the total investment for the power sector has been assessed at Rs 3,50,000 crore including transmission schemes in public and private sector.

The strategies worked out by the Planning Commission for the hydel sector include advance action on projects to improve the hydro-thermal mix by the end of the Tenth Plan and revamping the existing institutional structure and financing arrangements which were not presently conducive for hydro projects development. It has also underlined the need for formulating a suitable policy for development of hydro projects.

The other focus would be on further simplification and streamlining of the procedures for clearances and investment decisions in the public sector and encouragement to captive andco-generation power plants to supplement the capacity addition programmes envisages in the Ninth Plan.

The Commission has also suggested that the government should facilitate setting up to appropriate institutional and legislative mechanism for reforms and restructuring of the power sector which would act as catalyst in improving the capabilities of power sector utilities for undertaking long-term investments as well as leverage funds from the private sector for the development of the power sector. For this purpose, it pointed out, the long-term funds in the national and international markets be accessed for augmenting public expenditure to give fresh impetus to growth.