After the dismal performance in the 10th Plan, the power sector is facing a similar fate in the 11th Plan with the Centre, states and private companies estimated to fall short of a massive Rs 450,000 crore during 2007-12 -- nearly 45 per cent of the total funds requirement.
The country needs about Rs 10,31,600 crore to add more than 70,000 MW of generation capacity, besides creating and upgrading transmission and distribution systems. However, the sector would have a shortfall of Rs 4,51,607 crore, as per the report of Working Group on Power for 11th Five-Year Plan.
The major chunk of the shortage is for states which are slated to make total capacity additions of around 24,000 MW in the 11th Plan and need Rs 5,14,167 crore. On a debt-equity ratio of 70:30, states need an equity capital of Rs 154,250 crore, but surprisingly have no equity available to fund the expansion. Out of Rs 3,59,917 crore of total debt required, the states can arrange Rs 1,64,973 crore. This leaves a gap of close to Rs 2,70,000 crore in debt and equity for the states taken together, after considering an additional Rs 80,000 crore in funding by special schemes such as APDRP and Rajiv Gandhi Gramin Vidyutikaran Yojana.
The massive shortage is not surprising given the fact that the state utilities suffered a loss of Rs 26,150 crore and posted a negative rate of return of 27.43 per cent, according to the Economic Survey released in February 2007. According to the report, the 11th plan capacity addition target has been set at 68,869 MW. But since around 23,000 MW has been added in 10th plan, compared to the targeted 41,000 MW, the 11th plan would need a capacity of 76,000 MW.
During 2007-12, the Centre would add at least 37,000 MW, private firms over 9,000 MW and states 23,000 MW. (Economic Times)
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