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From the Editor: Power Tangles

Business Today editor introduces the latest issue of magazine.
twitter-logoProsenjit Datta | Print Edition: October 25, 2015
Business Today Editor Prosenjit Datta
Business Today Editor Prosenjit Datta

According to statistics put up on the CEA website, at the end of May 2015, a total of 19,706 villages remained to be electrified in the country. These are the villages that have no electricity connections at all. There are probably double the number of villages that have some sort of electricity line passing through them, but where the houses have no power connection. And an even larger number of villages where homes might have a power connection, but do not enjoy more than an hour or two of electricity at best any day. Even bigger towns and big cities often have many areas that see power cuts for seven to eight hours a day.

The current estimates are that some seven crore households and about 28 crore people in the country still do not have access to electricity, 68 years after Independence.

And it is not as if industrialists and businessmen enjoy unlimited access at the cost of poor consumers in villages and towns. One of the biggest threats to India's economic growth - and Prime Minister Narendra Modi's Make in India plans - is the erratic power supply to industry and services. (Other infrastructure bottlenecks - from roads to ports - are also equally responsible, but more on that subject another day.)

The flip side of the issue is that India has huge coal supplies, the fuel of choice for the bulk of the conventional power plants. Indeed, India has the second-biggest reserves of coal in the world. We also have abundant sunlight - one reason the government has set an ambitious target for 100 gigawatt of solar energy to be generated by 2022.

More importantly, enormous investment has gone into the building of power plants - both conventional energy as well as new sources. In fact, power generation has been a great favourite of all industrialists who are seeking an infrastructure play. In the past 10 years, 160 GW of conventional and unconventional power production capability has been added.

So, what is the problem exactly? Well, for one, historically no one has tried to think of a comprehensive plan for the power sector. Piecemeal solutions have been attempted. In the 1990s and much of 2000s, the conventional wisdom was that power generation was the problem. This led to the opening up of the generation part to the private sector and a lot of investment came in. Capacities increased dramatically. But fixing power generation without fixing distribution and transmission did not solve the problem. Then a school of thought proposed privatising distribution as the way out. So far, it has been tried out with mixed success - in Odisha, it has been a failure, while in Delhi, it has been a partial success, but with the distribution companies and the government often at loggerheads over many issues. And, of course, power cuts still remain in Delhi.

But over the past two decades, the state-owned distribution companies have ended up being the biggest culprits to the dream of power for all. Twenty-one of the 29 state electricity boards have notched up such enormous losses that they do not want to buy power even when it is easily available. The UPA government tried to fix the problem but failed. Now Modi is trying to do the same. The question is whether even he - or his talented Power Minister Piyush Goyal - can actually sort out this tangled mess. Read about it in our cover story.

This issue also carries our technology special report. It looks at how robots are revolutionising the services sector, how artificial intelligence is solving everyday problems, and how wearable technology is becoming a hot business for entrepreneurs... and lots more.

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