Funding drought seen in power

The India Infrastructure Report 2004 has predicted that state-owned power utilities will require funds to the tune of Rs 1,00,000 crore for cash needs and Rs 2,00,000 crore in investments over the next five years.

The report added that for successful reforms in the power sector, the fund requirements during the reform period should be fully met through various sources.

"The financial commitments made by different agencies will be more like 'financial closure' for reforms and will provide a solid base for reforms. If such a financial closure is achieved, the reforms will not be hampered or slowed," the report says.

While the privatisation of the Delhi power distribution body has been cited as a model, the report says the emulation of the Delhi experience in other parts of the country will depend on factors like the relative weightage assigned by local politics to the delivery of services and the quality of state governments' leadership.

The report has listed the passage of the Electricity Act 2003 and the implementation of the one-time settlement scheme of State Electricity Board (SEB) dues to Central Public Sector Utilities (CPSUs) among the major policy developments in the sector.