Energy sector spending low: Review

MID-YEAR REVIEW OF THE ECONOMY

The mid-year review has lamented the slow pace of expenditure in the energy sector, while expressing satisfaction with the spending on agriculture, education, rural development and physical infrastructure like roads.

The review, tabled in the Lok Sabha today, noted that the government should expedite the liberalisation of bilateral entitlements of landing rights under its open sky policy.

It said the strong economic performance in 2004-05 had, so far, been associated with high growth rates in transportation. Goods carried (in terms of tonnage) by the railways in the first half of the current fiscal was 6.9 per cent higher than in the corresponding period in the last fiscal. Also, major ports handled 9.8 per cent more goods during the period.

The introduction of a cost-plus subsidy structure for kerosene and domestic cooking gas and some delays in the pre-audit of claims has resulted in a decrease of subsidy on these fuels.

In the power sector, the review noted, there are many hurdles to the unscheduled interchange market becoming a true spot market for electricity.

"The unscheduled interchange market, which penalises buyers for unplanned offtake of electricity from the grid and rewards suppliers for meeting such unplanned offtake, has helped improve grid discipline," said the review.

Referring to the controversial access deficit charge in the telecom sector, the review notes that the issue of providing efficient and cost-effective telephone services in remote villages and subsidising such services remains to be addressed satisfactorily.

The review also emphasised the need to initiate a revolution in broadband Internet connectivity comparable to what has been achieved in voice telephony.