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“Imports of essential raw material like coal will only help add value to the Indian economy,and revival of investment sentiment in the power sector through quick resolution of fuel rows is key to sustainable gro..

02 Nov 2012

NEW DELHI(Commodity Online): The power sector of India is badly affected by he Coal shortage and has lead India to darkness with 2 to 10 hours of power cut in several states. A large size of capacity in power generation achieved during the 11th Five Year Plan could not be commissioned because of shortages of coal in the country. As much 55 GW of new capacity in the thermal sector has been hit by coal shortages, according to Associated Chamber of Commerce and Industry (ASSOCHAM).

The power sector is under stress with the result that not only power distribution companies are burdened with a debt of Rs 1.90 lakh crore. Close of Rs one lakh crore of bank finance is also stuck in the power sector.

Against the coal requirement for thermal power generation during 2012-13 of 476 million tons, indigenous supplies may be only 407 million tons, requiring the balance to be met through imports.

According to the Reserve Bank of India, the demand-supply gap in coal is projected to rise further during the Twelfth Plan. New plants that have been commissioned on the basis of coal linkage are facing severe constraints in the absence of committed Fuel Supply Agreements (FSAs).

Import of coal is much essential or the domestic production of coal in the country should be improved to face the situation. Coal India must also be held accountable for achieving the production targets. Whatever the issues with the power producers must be resolved at the earliest.

“Imports of essential raw material like coal will only help add value to the Indian economy,and revival of investment sentiment in the power sector through quick resolution of fuel rows is key to sustainable growth, says ASSOCHAM.


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