The Confederation of Indian Industry (CII) has called for urgent reforms to secure 24x7 power supplies for all. The chamber said that high power distribution losses are adversely impacting GDP growth.
The losses of State Electricity Boards (SEBs) at over Rs 1,00,000 crore as of 2009-10 account for a large proportion of the fiscal deficit and the subsidies budget of the State Governments. Therefore increasing the burden on State finances, the chamber said.
Mr Chandrajit Banerjee, Director-General, CII, said: “The financial loss has been estimated at 1.5 per cent of the national GDP. This will act as a major deterrent to private as well as global investments in the sector.”
“With mounting losses, the ability of the SEBs to buy power is curtailed leading to load shedding and the inability to supply 24x7 power to all customers. Consequently, the Government's aim of ‘power for all' is likely to be difficult to attain in the long term. As power has a multiplier effect on the GDP, the lack of growth in the power sector may slow down GDP growth,” he added.
CII has made several suggestions for reforming the distribution sector.
These include increasing competition, implementing ‘open access' to provide electricity buyers the option to select their source of supply, placing electricity under the purview of the proposed Goods and Services Tax (GST) and timely issuance of cost reflective tariffs.