Our state electricity regulators must push to reduce distribution losses and encourage open access. The budget can help by increasing incentives for loss reduction in accelerated power development and reform programme and compensation, if needed, as in adopting value-added tax, to implement open access. Part A of the budget, which deals with expenditure and proposals, can announce funds for modernization of Coal India Ltd and introduction of the private sector in coal, as in the new exploration licensing policy for petroleum and gas, along with a regulatory framework, as promised in the last full budget. Strict environmental safeguards and a generous rehabilitation policy for infrastructure projects can forestall legitimate land acquisition and environmental protests, which are under-appreciated hurdles to raising generation capacity. With natural gas from the Krishna-Godavari basin off India’s eastern coast, cheaper liquefied natural gas and a possible Iran pipeline, a common carrier national gas grid is an imperative. As the Petroleum and Natural Gas Regulatory Board offers greater clarity, private investors will emerge, but support for public investment, by raising GAIL (India) Ltd’s capitalization, is also needed. Conversely, a lighter helping hand for Power Grid Corp. of India Ltd would prevent it from becoming an inefficient behemoth and encourage more private investment in transmission. Finally, in energy, Part A could announce large budgetary support for Nuclear Power Corp. of India Ltd and Bhabha Atomic Research Centre, and simultaneously, legislation to permit entry of the private sector into atomic energy.
Source: Livemint.com (2nd July, 2009)