The central government laid the foundation stone of reforms in 1991 when it introduced the policy to liberalize the power sector and promoted private investments in the sector. The initial focus of the policy was on the power generation.
The Indian Ministry of Non-conventional Energy Sources has an aim to raise the share of renewables in power generation to 10%, i.e. 10000 MW, by 2012. A lot of incentives are being given to promote renewables.
The Indian electricity sector is an example of government inefficiency. State Electricity Boards that are owned by government suffers lose of 30-40% of power, mainly due to thefts, whereas the loss of private power distributors is about 10%, mainly due to technical faults. Government grants and perversion has killed the motivation of managers of public sector to check thefts. Grants also restrict their incentive to avert blackouts and to maintain power lines, all works done better by private players. Privatization of SEBs has saved the subsidies of government (almost 1.5% of GDP) and indebted the managers to upgrade their operational and financial performance.
Introduction of the open access system is the latest development in electricity sector of India. Many state electricity boards and power distribution companies are buying electricity from power rich states.
As India has signed the nuclear deal with US and deal with France underway, India's energy generation capacity will increase largely. The efforts to secure gas resources as another option to conventional sources have also gained momentum in recent past.
Hence, India is looking forward to have a bright future by investing and planning heavily in power sector. The movement has been initiated with the privatization and capturing of various energy resources for electricity generation.
For further information about Indian Electricity Sector and its future growth, read the report "Future of Indian Electricity Sector (2005-2012) " by RNCOS at:
http://www.rncos.com/Report/IM026.htm
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