Lack of quality of infrastructure has been the recurring theme when the India story is discussed anywhere these days. The government is not short on initiatives. Can will be backed with implementation?

The telecommunication sector in India is recording one of the fastest growth rates in the world. Tele-density stood at 11.75 per hundred at end-January, 2006.

The ambitious target is to reach 250 million connections by December 2007, and I am confident of success. I propose to provide Rs 1,500 crore from the Universal Services Obligation Fund in 2006-07. More than 50 million rural connections will be rolled out in three years and, thereafter, a connection will be available on demand. The digital divide between rural India and urban India will be bridged. In order to extend financial support to infrastructure for cellular telephony in rural areas, the Minister of Communications will bring a Bill in the Budget session to amend the Indian Telegraph Act.

Not power, though

Power generation in 2005-06 has, so far, shown a modest growth of 4.7 per cent because of shortage of fuel, mainly LNG and coal. The demand-supply mismatch continues. More efforts are required to augment capacity in generation, transmission and distribution. Eighty two projects are under construction and, when completed in one to three years, will add 33,000 MW of capacity in the public sector and 6,500 MW of capacity in the private sector. Of these, about 15,000 MW will come on stream by March 31, 2007.

The Ministry of Power has invited bids for five ultra mega power projects of 4,000 MW each, of which two will be pit-head (in Chhattisgarh and Madhya Pradesh) and three will be coastal (in Gujarat, Karnataka and Maharashtra). It is our intention to award these projects before December 31, 2006.

Hoping for more light

Capacity addition alone is not enough; we need deep and durable reforms in transmission and distribution. In order to create an enabling and empowered framework to carry out these reforms, the Prime Minister will establish an Empowered Committee of Chief Ministers and Power Ministers. A target of 3,075 MW of installed capacity for the Tenth Plan was fixed for non-conventional energy sources, including wind power. By December 31, 2005, that target had been exceeded and 3,650 MW of capacity installed. I propose to provide a sum of Rs 597 crore next year for non-conventional energy resources. All States have signed memoranda of understanding to implement the Rajiv Gandhi Grameen Vidyutikaran Yojana. Ten thousand villages will be electrified in the current year and, in 2006-07, 40,000 more villages will be electrified. The key to the success of this programme is the engagement of franchisees and proper commercial and contractual arrangements for distribution, billing and collection.

Partners for fuel

A comprehensive review of the coal policy is underway. This year, 45 coal blocks have been allotted for captive consumption to the power, cement and steel sectors and to the State Governments. After reserving blocks for Coal India Ltd and its subsidiaries for the period up to 2012, it has been decided to de-block coal reserves of 20 billion tonnes for power projects. The definition of captive consumption will also be amended to allow coal mining by producers with firm-supply contracts with steel, cement and power companies. The capacity of Central Mines Planning and Development Institute Ltd (CMPDIL) to drill in order to prove reserves is now only 200,000 metres per annum, and this will be expanded substantially.


Energy security is high on the Government's agenda. In five rounds of the New Exploration Licensing Policy (NELP), 110 production-sharing contracts have been awarded. The Ministry of Petroleum and Natural Gas has now made its biggest offer under NELP VI. Fifty five blocks and an area of 355,000 sq km, which is thrice as large as the previous round, have been offered. Besides investment in the upstream and downstream segments, we are encouraging investment in refining, pipelines and green fuel projects. In the refinery sector alone, an investment of Rs 22,000 crore is expected in the next few years.

(This article was published in the Business Line print edition dated March 1, 2006)
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