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Thursday, August 12, 2010

Half of rural India still lives in darkness

Most Indian investors rely a lot on the growth potential of India while making their investment decisions. And you might be no different. But what if the India growth story ends with a whimper? Well, if the country's power woes were to continue unabated, this might become a reality after all. As per a report in Mint, around 57% of rural households and 12% of urban households in India have no access to electricity. That partly explains why our per capita power consumption (700 units a year) is way below the world average (2,600 units). 
The power sector is already battling a number of serious issues that have stymied its growth. Fuel and equipment shortages are the norm. Vast tracts of land to set up the plant are hard to come by. Over that, the whole host of regulations makes the project execution very tiresome for companies. All this has resulted in the country consistently falling short on capacity addition targets. If we do not get over these issues fast, which anyways looks very bleak, the day is not far when we will rue our destinies. 

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