"The way the current situation (can) be handled is through some combination of tariff increase and serious efforts to reduce AT&C losses," Planning Commission Deputy Chairman Montek Singh Ahluwalia told state power ministers.
In the power and energy sector, he said, "we need to recognise that the objective of inclusive growth will not be met if the power sector is not put on economically sustainable basis."
"The crucial weak link in power sector is distribution. Let us be clear about it ... There is no way they (states) are going to get energy ... There is no way they are going to support GDP growth (of the country), that also means the growth rate of individual states," Ahluwalia said
The Commission had invited the state power ministers to discuss the strategy to deal with various issues of energy sector during the 12th Five-Year Plan (2012-17). It is in the process of finalising the voluminous document.
"..It cannot possibly be the case that we are running an overall annual loss of about Rs 70,000 crore (in power sector)," he said.
Extending his support to the Power Ministry's proposal to restructure distributions companies debt to the extend of Rs 2,00,000 lakh crore, Ahluwalia said the states should increase the electricity tariff to reduce these firms deficit.
He said, "the outstanding debt of these (electricity boards) will have to restructured. The debt has been allowed to grow ... Possibly because state governments allowed it to grow." (MORE)