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SEBs to get extension for unbundling

July 07, 2004 12:52 IST

The pre-Budget Economic Survey for 2003-2004 on Wednesday said the UPA government would extend the date for unbundling of State Electricity Boards as demanded by various states.

The Electricity Act, 2003 laid down the framework for reorganisation of the SEBs in a timeframe to be decided by the state governments with consent of the Central government.

Economic Survey 2003-2004: Complete Coverage

"In view of the concern expressed by a number of states, the mandatory date for unbundling and replacing the SEBs will be extended," the Survey, tabled in Parliament, said.

Under the new statutory regime, generation of power is completely delicensed and captive power generation freely allowed, the Survey said and added early attempts to introduce private generation companies into India's electricity sector faced difficulties due to poor financial health of the distribution monopolies owned by states.

Private companies embarking on power generation faced credit risk (fear of non-payment by SEBs).

The Electricity Act, 2003 was enacted with the main objective of providing a liberal and progressive framework for growth of power sector by introducing competition in the different segments of generation, trading and distribution of electricity.

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