Power Industry

Power is a key factor that contributes to the industrialization and the economic growth of a country. It is one of the most important infrastructures on which the development of various economic sectors of a country depend. Availability of reliable and quality power at affordable rates is very crucial. It helps to make the domestic market competitive globally and thus enhance the quality of life for people. The nuclear, hydro, and thermal energy are the prominent sources of electricity generation in India.


In India, the power industry is huge. The total installed power generation capacity has been 1,47,402 MW (approximately). India is the world’s sixth-largest consumer of power. It accounts for about 3.5% of the total power consumption in the world. Over the years it has been observed that the power industry in India has been growing considerably and promises great potential for new foreign investments. Today, the government of India permits up to 100% foreign direct investment in the power sector. Thus, there is a great opportunity lying ahead for foreign investors to invest in the sector.


The Central Ministry of Power is the main authority responsible for the overall development of electrical energy. The ministry is in charge of planning, formulating policies, monitoring and implementing power projects, processing of projects for investment decision, and enacting legislation with regards to power generation, distribution, and transmission.


In order to attract foreign investments into the power industry of India, the government has announced several policies and has taken initiatives from time to time. The most important amongst all the policies announced by the government is the enactment of the Electricity Act. The act was enacted in 2003. The act mainly aims to solidify the existing laws relating to the generation, distribution, transmission, and trading of electricity, promote healthy competition among companies in the power sector; and ensure that there is a supply of electricity to every nook and corner of the country. The Electricity Act also aims to rationalize electricity charges, promote efficient and environmentally favorable policies.


The Central Ministry of Power has also initiated various reform measurers to attract private foreign investments in the sector and thus enhance power generation capacity and promote power efficiency in the country.


Moreover, the Central Ministry of Power has set an ambitious plan of “power for all by 2012”. The plan is an outline draft for the development of the power sector in India. The plan requires the installed power generation capacity be increased form current 1,47,402 MW (approx) to 2,00,000 MW by 2012. Through this plan the Central Ministry of Power aims to increase the per capita availability of electricity by 1,000 units by 2012 and to supply power to all at an affordable cost and enhance the commercial visibility of the power industry.


The power industry in India has a huge scope for foreign investment. The power industry is one of the industries in India that offers a win–win situation for investors. The power industry in India promises great returns for their investments. The ambitious power plans of the government of India are an ideal platform for making investments.

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