Historical
Perspective
The supply of
electricity commenced in India in the 1880s with the commissioning
of a small 130kw hydroelectric plant at Darjeeling, now in West
Bengal. A thermal power plant based on coal was set up in Calcutta
in 1897. In the next 50 years, upto independence, the supply of
electricity was confined mainly in and around urban centres,
chiefly for lighting purposes. Most of the ventures were due to the
initiatives of private entrepreneurs.
Legal provisions to
support and regulate the sector were put in place through the
Indian Electricity Act, 1910. Shortly after independence, a second
Act - The Electricity (Supply) Act, 1948 was formulated, paving the
way for establishing Electricity Boards in the states of the Union.
The State Electricity Boards (SEBs) have played the vital role in
the rapid expansion of the country's electricity
network.
The production of
power was reserved for the public sector in the Industrial Policy
Resolution of 1956. Since then, almost all new investment (barring
those by existing 'Licensees') in power generation, transmission
and distribution has been made in the public sector.
Electricity
generation in the country, which was only 4.1bn units (Kwh) in 1947
has increased to Xbn units during 1999-00. The installed capacity
which was only 1,362mw in 1947, has increased to 97000MW as on
March 2000. The number of villages electrified stood at 0.5mn
(85.2% of the total villages) and irrigation pumpsets energised
numbered 11.8mn, out of a possible 14.5mn.
Despite these
achievements, the power sector has been plagued by serious shortage
of supply vis-à-vis demand. During 1998-99, the country faced
peaking shortage of around 14% and energy shortage of 5.9%. Setting
up a power plant is immensely capital intensive. Capital cost per
mw capacity, varying as per fuel, averages Rs35-50mn. This implies
that resource outlay on creation of power generation capacity will
be huge.
Restoration of
financial health of SEBs and improvement in their operational
performance is one of the most crucial issues in the power
sector.
