Power shortages could short-circuit India's ambition of achieving sustained double-digit economic growth, Prime Minister Manmohan Singh warned a conference of chief ministers on Monday.
Singh set the tone by calling for a campaign against the "cancer" of power theft, and wrapped up the discussions with a stern message to power regulators.
The prime minister asked states to come down heavily on power theft, and warned the chief ministers of the dangers of power supply not keeping up with economic growth. "Shortages of this magnitude can be a serious impediment to economic activity…," he said.
"We have not been able to make a decisive breakthrough in ensuring high and sustainable rates of growth of this sector and improving its financial health."
Singh asked states to set up special courts under the Electricity Act to dispose of power-theft cases.
He said the regulatory structure was doing reasonably well but "regulators are not supermen… and have to function strictly within the legal framework."
The prime minister asked states and the Power Ministry to "intervene decisively" if regulators overstepped their limits. "Regulators should regulate but not over-regulate," he said. "They should not become a parking place for retired bureaucrats."
He said giving new players open access to consumers was the key to attracting investment, particularly from the private sector.
The entry of new players would also put the pressure of competition on the existing power utilities and raise their efficiency levels. India added only half its targeted capacity of 41,000 MW during the Tenth Five Year Plan. The government now intends to add 78,000 MW during the next five years.
Singh announced the setting up of a standing group of power ministers under Union minister Sushilkumar Shinde to monitor all issues affecting the sector; a sub-committee of this group under Finance Minister P. Chidambaram to look at financing issues for upgrading transmission and networks; and a task force at the Power Ministry to focus on hydropower.
He decided to constitute a dedicated National Power Project Management Board at the Power Ministry to ensure that power projects met their deadlines. "This is the only way we can achieve the ambitious targets we have set for ourselves," said Singh, reiterating the 2012 target for eliminating power shortages. The power sector suffers from a 10 per cent shortfall.
Shortages touch 25 per cent during peak periods in some states.
By evening, Singh promised improved incentives for reduction of transmission and distribution losses.