The Hindu Business Line : Power tariff for industry `on higher side' in TN

Ms Lili Liu, Lead Economist, Economic Policy, Poverty Reduction and Economic Management, Vice-Presidency, World Bank, made these points during the course of her presentation at the opening session of a two-day, World Bank-organised workshop on `Accelerating growth with equity in Tamil Nadu,' here on Wednesday.

According to her, Tamil Nadu's power utility is among the more efficient State power utilities in the country and Tamil Nadu is the second largest power market in India. However, Tamil Nadu, as well as India, will have to find a solution to the power sector reforms to resolve the shortage and poor quality of power supply, as a viable power sector is critical for achieving fiscal stabilisation, accelerating economic growth and ensuring sustainability of ground water resources.

"Although power theft and corruption are a lesser issue in Tamil Nadu and the State has much higher ratio of metered electricity to total power sales than comparable States, reducing cross subsidy is critical to the financial viability of the power sector," she said, highlighting the need for reforms in the sector.

Ms Liu said Tamil Nadu's reform strategy should address four broad areas — improving investment climate, creating fiscal space for poverty reduction, improving service delivery and poverty monitoring and evaluation.

Tamil Nadu's development challenges included unemployment, which was a serious concern; slowdown in the primary sector and continued vulnerability to droughts, and severe water shortages; 12-17 million people live in poverty, plateauing of IMR (infant mortality rate) and slowing down of MMR (maternal mortality rate) decline; and fiscal crisis in the late 1990s.

Ms Liu said Tamil Nadu's infrastructure was more developed than in many Indian States, but compared poorly with other emerging economies.

Close to 40 per cent of managers questioned in a survey or about 50 per cent of exporters in the State viewed infrastructure as a major or serious constraint to growth.

She said partnerships with the private sector to mobilise private financing and to tap domestic capital markets were fiscal and growth necessities.

The PPP (public, private partnerships) experiments in Tamil Nadu were ahead of other States and had demonstrated potential benefits and lessons.