India became power surplus in the first quarter of 2014-15, heralding a new phase in its infrastructure development story.
According to data compiled by the Central Electricity Authority, total power availability was about a per cent more than the total demand from industrial, commercial and household sectors. This was a dramatic improvement over the average three per cent power deficit recorded in 2013-14.
Power ministry officials admitted that the improvement on the power availability front was expected because in the past few years the country has been witnessing an annual power capacity addition of more than 20,000 Mw. But they were surprised by the dramatic recovery which occurred in spite of a sharp uptick in economic growth in the same period.
Many states like West Bengal have, in the past, seen an improvement in power availability as a result of industrial stagnation. With lower demand for power from industries, such states have often seen an improvement in power availability or a drop in power deficit. However, in the first quarter of 2014-15, power became surplus in spite of an economic growth rate of seven per cent, which was possible largely because of a spike in the manufacturing sector’s performance.
Another reason that contributed to surplus power availability was the pace of tariff increases in the power distribution sector that saw a sharp reduction in subsidies, an improvement in the health of power utilities and a surge in fresh investments in the power sector.
All these developments, power sector experts said, would help sustain the healthy power availability situation reached in the first quarter of the current year.
Source: Business Standard
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