Transmission and distribution upgrades necessary to help ensure ‘Power for all’ by 2020

Adequate infrastructure is a pre requisite for sustained growth of any emerging economy. The energy infrastructure has over the years become an increasingly critical component. Government of India’s focus on providing ‘Power to all’ by 2020 underscores this further and is poised to cause a quantum shift in the energy demand in the years to come. Further, electricity is moving beyond traditional applications into areas such as mass mobility. This may cause unprecedented scale of transformation in the energy sector in terms of need for energy and its reliability dimensions.

This growth cannot be managed by the government alone and the public and private sectors need to work together for financing the developments and also bring the technological inputs. The government’s stance in this regard has been positive with a favourable policy regime and a robust business environment which can help ensure that capital keeps flowing into the sector. It is now time to bring about greater innovation on the back of conducive policy regime.

Effective implementation of these changes can create enormous opportunities for various stakeholders and market players of indigenous and foreign origins. In fact, many foreign players have teamed up with Indian partners to set- up base in India. India acquired the ninth slot in the top 10 countries attracting highest FDI in 2014 and these FDI inflows to India saw an upward trend in 2015 on account of economic recovery. India also jumped 16 notches to 55 among 140 countries in the World Economic Forum’s Global Competitiveness Index that ranks countries on the basis of parameters such as institutions, macroeconomic environment, education, market size and infrastructure among others. These statistics reflect a very optimistic economic environment which is encouraging. The total FDI investments which India has received in FY 2015-16 (April 2015-March 2016) was US$ USD40 billion, which clearly reflects the government's efforts to improve ease of doing business and relaxation in FDI norms have borne positive results. The energy sector has attracted a significant slice of this investment.

However, this has to go beyond mere investment numbers. What we really need to do is to help ensure that the generation resource base is diversified, and the transmission and distribution infrastructure is upgraded so that the government’s vision of ‘Power for All’ by 2020 can be realized in a sustainable way. This could serve the core economic interests of the country and the consumers at large who, hitherto, have had to cope with inadequate and unreliable electricity services. It would also announce India’s emergence as a large, modern and expanding energy economy and cement its place as an investment destination.

Anish De

Partner, Infrastructure & Government Services at KPMG in India