Theft is cancer for power sector: Manmohan Singh | india | Hindustan Times
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Theft is cancer for power sector: Manmohan Singh

PM on Monday calls for a determined campaign against the cancer of power theft.

india Updated: May 28, 2007 15:37 IST

Calling for a determined campaign against the cancer of power theft, Prime Minister Manmohan Singh on Monday said a breakthrough in raising electricity output remained elusive and was seriously affecting economic growth.

"Theft is the cancer of the power sector. We need to come down on it heavily as it is seriously affecting the financial viability of the sector as a whole," the prime minister told a national conference on the power sector in New Delhi.

"Honest consumers who pay electricity bills regularly bear the brunt of the cost of theft," he told the conference, attended by Finance Minister P Chidambaram, Power Minister Sushil Kumar Shinde and state chief ministers.

The prime minister expressed concern that India was facing an average energy shortage of around 10 per cent and a peak-level shortfall of over 13 per cent, which was as high as 25 per cent in some states.

"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."

Manmohan Singh also proposed to chief ministers an accelerated power development and reforms programme, funded by the central government by converting loans to grants, to cut transmission and distribution losses.

"We need to upgrade the transmission and distribution system in a time-bound manner. This is an important effort as the financial viability of the sector and making it a commercial proposition depends on this initiative."

The prime minister also observed that capacity addition had been rather tardy during the 10th Five Year Plan at a mere 50 per cent of the target and said it reflected poorly on the planning process at both the state and central levels.

"I feel the time has come when we need to take a close, hard look at the process of project execution in the power sector. In fact, time is running out and unless we are able to arrest the growing shortages, the effect on our economy may well prove disastrous."

Manmohan Singh said some estimates had placed investment needs in the power sector at Rs 600 billion (around $15 billion) and expressed concern that unlike telecom, electricity generation was unable to attract foreign capital.

"I think this is a serious issue that needs to be considered. Why are we unable to attract private investment? Are there systemic or structural issues that need to be addressed in order to make the sector viable and capable of providing decent returns to investors?" he queried.