The Ninth Plan target for generation of additional power capacity is unlikely to be achieved, K D Agrawal, chairman and managing director of the Industrial Finance Corporation of India (IFCI), said here today.
During the Ninth Plan, the total capacity envisaged is 42,245 mw. During 1997-98, the first year of the Plan, the capacity addition has been of the order of 3,283 mw and the expectation for 1998-99 is around 3,500 mw. At this rate, the Ninth Plan target is unlikely to be achieved, Agrawal said while speaking at a Ficci workshop on infrastructure finance.
The main reasons assigned for the low performance in the power sector are the problem of arriving at a satisfactory level of fuel linkages, delay in getting multiple clearances, poor financial health of the state electricity boards, low plant load factors, high cost of generation, low tariff and high transmission and distribution losses.
More From This Section
On the major issues before infrastructure financing in India, he pointed out that development of a secondary debt market and facilities for securitisation were crucial to infrastructure funding in the country.
"The government should take necessary procedural, legal and administrative steps to find a solution to this problem. The gains in the long run will far outweigh the loss to the exchequer in the form of stamp duty," Agrawal said.
He said infrastructure projects in India at the moment require various statutory and techno-economic as well as environmental clearances from various agencies. There is unusual delay in getting these multi-stage clearances from the authorities. This could be tackled effectively by ensuring a single-window dispensation for all such clearances, he pointed out. "Tariff fixing for most of the infrastructure projects has to be progressive which could ensure comfort both for promoters and lenders. Suitable institutional network has to be developed for tariff fixing in various sectors ," he said.