India’s power sector losses seen at $27bn by World Bank

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NEW DELHI, June 24, 2014 (AFP) – Annual losses in India’s dysfunctional power sector are forecast to rise to $27 billion in 2017 unless the government enacts sweeping reforms in the face of rising demand, a World Bank study said Tuesday. India has one of the world’s lowest per capita electricity consumption rates, with the average person consuming less than a third of the annual global average of 3,044 kilowatt-hours, the study says.

But this is expected to rise sharply as the country industrialises and caters to the needs of its growing population which according to the United Nations is forecast to hit 1.45 billion by 2028.

The deficiences of the power network were laid bare in July 2012 when a huge blackout across the north and east of the country left almost 300 million people without electricity.

“An inefficient, loss-making distribution segment and inadequate and unreliable power supply are major constraints to India’s aspirations for growth,” Onno Ruhl, the World Bank’s India director, told reporters Tuesday. In 2011 the power sector incurred losses of $12-$13 billion. By 2017, the World Bank forecast the figure could rise to $27 billion assuming tariffs increase around 6.0 percent every year.

The problems stem