The recently announced power sector reforms by the Government are a step in the right direction as easier and assured access to power will help boost productivity of the manufacturing sector, says a Nomura report.

According to the Japanese financial services major, besides a shortage of supply, poor T&D infrastructure and large-scale pilferage are some of the issues plaguing the power sector.

On November 20, the Government approved three key projects in the power sector, targeting the improvement of transmission and distribution (T&D).

It approved a Rs 43,033-crore rural electrification scheme, the Deendayal Upadhyaya Gram Jyoti Yojana. This scheme would replace the existing Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).

“This should strengthen the power distribution infrastructure in the rural areas and help the Government reach its goal of being able to provide power 24/7 across the country,” the Nomura report said.

In addition, the Government approved the Rs 5,200-crore scheme for strengthening the power transmission and distribution network in six North-East States.

It also approved a Rs 32,612-crore scheme for strengthening the sub-transmission and distribution network in the urban areas.

The Nomura report noted that these schemes should help address some of the issues and were a step in the right direction.

“These announcements, following the recent coal e-auction guidelines, indicate that reforming the power sector remains a key Government priority,” it said.

The Japanese brokerage firm further said “in our view, easier and assured access to power will help boost the productivity of the manufacturing sector”.

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