Power shortages cost India $68 bn in GDP, says report

India loses an astronomical ` 4,14,800 crore or $68 billion of its gross domestic product (GDP) because of electricity shortage

Published: 28th September 2013 10:37 AM  |   Last Updated: 28th September 2013 10:38 AM   |  A+A-

India loses an astronomical ` 4,14,800 crore or $68 billion of its gross domestic product (GDP) because of electricity shortage, this observation was made in the Ficci-Booz & Co report on power transmission released on Friday.

The report said that one of the important reasons why the country is lagging  in transmission capacity is the what is called the Aggregate Technical and Commercial (AT&C) losses being faced by the sector.

Aggregate Technical and Commercial  losses in India stood at 26 per cent, which was much higher than the global average of 9 per cent in 2010.

Even India’s neighbouring countries that import power from India have better management of transmission and distribution losses.

The report also pointed out that transmission bottlenecks are an important reason for these shortages.

Since demand and generation capacity are both expected to increase in the future, transmission constraints need to be addressed urgently, the report noted.

“There is strong correlation between power consumption and the GDP of the country. Power shortages currently cost India a GDP loss of $68 billion (0.4 per cent of total GDP),” the Ficci report said on Friday.

The report said India is very deficient as far as investments in the transmission sector in concerned and stated that 50 per cent of the amount invested in power generation should be invested in transmission, in India this figure stands at 30 per cent.

The Ficci report also pointed out that the inability to evacuate excess power  regions facing power shortages has also been an issue.

The investment required in the power transmission sector is about $35 billion, out of which about $19 billion is expected from state-run Power Grid Corporation. The rest $16 billion would have to be secured from private players, the report further added.

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