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Home > India > Business > Business Headline > Report

Power shortage to hit India Inc

April 02, 2008 14:47 IST

The Indian industry will feel the pinch of power shortage with the industrial production expected to be 35 per cent less during the peak summer between April-July this year.

The production is already falling down by about 25 per cent in February-March 2008, according to an industry body Assocham titled - Fallout of worsening summer power situation on industrial production in April-July 2008.

The study indicates that industrial production has suffered by 25 per cent due to the extremely erratic power situation in February and March 2008, while captive power stations within the industrial premises are running at half the capacities because of expensive fuels such as diesel and petrol that have become much more costly.

The study is based on the direct feedback from over 2,000 industrial locations across the country through various chambers.

"The industrial production suffered heavily in winters of 2007 as power deficit had remained within the range of 18-20 per cent. However, between the month of February and March 2008, the deficit went up to around 25 per cent, causing industrial production to fall steeply," Assocham President Venugopal N Dhoot said.

The situation in summers is unlikely to be improved upon because of constraint on the generation side, the minimum production loss incurred by Indian Inc would stay around 35 per cent as demand for power in domestic and other areas of economic activities is growing at around 20-25 per cent and the power utilities are unable to supply powers to industrial consumers.

"The states in which power supplies to industrial locations would be most severe comprise Delhi, Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Maharasthra, Andhra Pradesh, Karnataka, Tamil Nadu and Gujarat. In these states, the captive power plants put up by industrial units are operating not even 50 per cent capacities because fuels required to run such plants have become expensive and as a result of competition, international industrial produce is available at cheaper rates so that the question is how does Indian Inc compete in global market and accelerate its exports,'' Dhoot said.

He said industrial locations in all these states are complaining that 40 per cent of their capacities are running idle as the power availability and shortage ratio in most of these states is between 60-40 per cent.

Assocham chief also added that lack of fresh investment and modernisation, coupled with huge transmission losses are responsible for the grave power situation in the country, which is expected to continue.

Maharashtra, which is one of the most industrialised states in the country, is facing one of the worst crises with energy deficit touching about 20 per cent at over 1,700 million units (MU) and peak deficit which exceeds 4,200 MW.

Maharashtra, as per feedback given to Assocham by its constituents, is resorting to an average load shedding of 8-10 hours a day.

Madhya Pradesh, which has a power requirement of over 3,500 MU, has availability of little over 2,400 MU with deficit ranging over 26 per cent. The situation is no better in Gujarat where the power deficit is about 13 per cent. The availability in the state is only 4,780 MU against the requirement of 5,500 MU.

The southern part of the country is likely to suffer energy shortage to the extent of 2,000 MU particularly in Andhra Pradesh, Karnataka and Tamil Nadu.

In Uttar Pradesh and Bihar, the deficit is expected to force its industrial locations to curtail their production by 40 per cent as the gap between available power in UP and Bihar and their supplies is around 1,500 MU.

Jammu and Kashmir suffered a power shortage of 16 per cent in February-March 2008, which will go around 25 per cent and the gap between power availability and supplies would be around 1,000 MU.

However, in case of Delhi, the power shortage would stay around 30 per cent with gap between power availability and its supply going up by over 600 MW in April-July 2008 on an average.