According to The WSJ , price controls and quasi monopoly of state-owned Coal India, has produced lower investment in the Energy Industry.
As a result of that policies India´s economic growth fell to 5% in the year ended in March,nearly half the rate growth it was five years ago.
"A major blackout last summer deprived 600 million Indians of electricity for about 48 hours. Rolling outages are common. Peak-hour power demand outstripped supply by 8.7% for the 12 months that ended March. Power sector stocks have lost 18% in the past year, even as the broader market gained 10%"
The immediate problem is inadequate supply of coal. More than half of India's electric power comes from coal, most of it supplied by state-owned Coal Company, but it hasn´t met the
growing demand in past years.
As a result of that policies India´s economic growth fell to 5% in the year ended in March,nearly half the rate growth it was five years ago.
"A major blackout last summer deprived 600 million Indians of electricity for about 48 hours. Rolling outages are common. Peak-hour power demand outstripped supply by 8.7% for the 12 months that ended March. Power sector stocks have lost 18% in the past year, even as the broader market gained 10%"
The immediate problem is inadequate supply of coal. More than half of India's electric power comes from coal, most of it supplied by state-owned Coal Company, but it hasn´t met the
growing demand in past years.
But the government's now is beginning to address these problems.
Last week, lawmakers said generators that have supply agreements with Coal India can reduce the amount of coal they buy from the state-owned miner to about 65% from 80% earlier, importing the difference. The government also said power generators can pass on the additional cost of imported coal to distributors.
Separately, power distributors owned by eight provincial governments have hiked end-consumer prices by up to 24% this year. This should help power generators sell more expensive power to distributors.
The power sector will attract more investment. In the year to March 31, investment in infrastructure like power grew at only 7.8%, half the average rate since 1991.
The latest measures may signal New Delhi is willing to move further on power pricing reform,and the end of India´s power shortages.
