Given the current economic policy paralysis, inflation and macroeconomic chaos in India, combined with the EU debt crisis and the slowing global economy, the global economic crisis seems to be heading towards the South Asian nation. Against such a backdrop, infrastructure assumes even greater importance as sustaining the high growth trajectory envisaged for India greatly hinges on the development of this sector.
Electricity is one of the most important infrastructure aspects for economic growth, given its forward and backward linkages with the economy, and affects the growth trajectory and development of the country (as a whole) as well as its constituent regions. However, despite its importance, Indian power sector faces multidimensional challenges. Some of the major issues are: fuel shortage (coal and gas), unavailability of transmission capabilities, investment requirements (private sector and FDI), land acquisition, opposition to nuclear energy, rural electrification, slow progress of existing projects, sourcing of equipment, electricity tariffs, thefts, etc.
Nevertheless, given the sector’s importance, government is making all efforts for its rapid expansion. The Twelfth Five Year Plan targets capacity addition of 75 GW and an estimated investment outlay of Rs 5,50,000 Crore for the developing the sector. Such optimist targets would definitely translate into various business opportunities for the power sector players across the value chain. Companies which do not have a presence in the sector may also be looking forward to opportunities to diversify their business. Against this backdrop, it is important to analyse all aspects the sector.
