Growth at 9% tough to achieve

ECONOMIC SURVEY 2006-07

COMMENT: Vikram Mehta, Chairman, Shell Group of Companies in India.

The Economic Survey contains an underlying note of caution. And correctly so. The Eleventh Plan growth target of 9 per cent will be difficult to meet if the laggards within the industry do not grow faster.

In fact, the energy sector could well be the stumbling block in sustaining our performance.

The rate of growth of demand for energy is exceeding the rate of growth of supply. And within the energy basket, the rate of growth of fossil fuels is exceeding that of cleaner alternatives.

In consequence, we confront three main challenges "� the challenge of an erratic and deficient energy supply, of a mounting import burden and of a degrading environment.

Clearly, we must increase the recovery of hydrocarbons (oil, gas and coal) from our discovered fields and find, and develop new indigenous reserves. We must improve the efficiency of the transmission and distribution of electricity and create the appropriate technical, fiscal and commercial structures to attract fresh investments into generation.

We must access the technologies for 'greening' fossil fuels and weaken the linkage between economic growth, energy demand and environmental degradation. We must increase our investments on R&D for the development of cleaner and competitive renewable energy sources.

In parallel, we must continue our current multi-pronged strategy to build safeguards against unexpected oil supply disruptions. We must continue to encourage the use of gas and support the industry through a transparent regulatory structuring.

We must not abridge competitive forces by "unlevelling" the playing field between the public and private sector and towards that end, we should rationalise the duty and tax structure.