Our Bureau

New Delhi, May 30

The Centre today asked State Governments to increase power generation capacities and reduce commercial losses to make the electricity sector financially viable and encourage greater private participation.

"Many States have not added any significant capacity in the last 5-10 years. This has worsened the power scenario in the country," the Power Minister, Mr Sushil Kumar Shinde, said at a meeting with power and energy secretaries of States here.

According to the Miinster, while Central public sector units have added substantial generation capacity, most States have lagged behind. Mr Shinde said that the Ministry would take up the matter of States not spending their allocated funds on capacity expansion with the Planning Commission. The efficiency level of State utilities is far below that of the national average, he said. Moreover, Aggregate Technical and Commercial (ATC) losses in some States were as high as 70 per cent, he said, and asked States to cut overall losses to ensure viability.

The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, said while average ATC losses were about 40 per cent for the country, the Government should aim at reducing it to 15 per cent in the next few years. Loss reduction should be given greater thrust than new capacity addition, he said.

(This article was published in the Business Line print edition dated May 31, 2006)
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