AT THE FIRST Power Ministers' conference after the passage of the Electricity Act, 2003, the most important message that the Union Energy Minister, Ananth Geete, has delivered is: meet the power generation targets of the Tenth Plan. In very clear terms, he has warned the States and their Electricity Boards that into the second year of the Five-Year Plan, only 2,958 MW of additional capacity had been provided against a Tenth Plan target of about 41,000 MW. Work had begun on adding another 18,842 MW. Unless the States manage to launch work on the remaining proposals, the balance of 19,309 MW would hang in the balance.

It was a grim reminder to the States and the utilities to get on with the challenging task on hand, particularly in the background of the huge slippages in achieving the targets set in the Eighth and Ninth Plans. Unless work on the projects to generate 19,309 MW begins before the year is out, they cannot be commissioned by the end of the Plan period in 2007. Of the 41,000-plus MW additional capacity to be built in the current Plan, over 22,800 MW will be in the Central sector, a little over 11,000 MW in the States' sector and only 7,121 MW in the private sector. To ensure that the target is met at least this time, the Centre and the Planning Commission have accorded top priority to the power sector, allocating a whopping Rs. 1,43,399 crores to the Ministry, including a gross budgetary support of Rs. 25,000 crores and the remaining Rs. 1,18,399 crores in internal extra-budgetary resources. This compares to just Rs. 14,900 crores and Rs. 30,648 crores during the Ninth Plan.

It is only natural for the Power Minister to expect all the agencies involved in the task to remain on course and strive to achieve the target. Many of the States have also accorded primacy to the power sector in their annual and Tenth Plan outlays. What remains to be done is to get started with the projects, monitor their progress and ensure their completion on time. But the Power Minister's concern stems from the track record. According to the Union Ministry, only 53.77 per cent of the target for the Eighth Plan was achieved and during the Ninth Plan, only about 50 per cent of the projected 40,245 MW was added. As such, the target for the Tenth Plan was fixed at the same level, hoping to achieve it at least this time. Mr. Geete has his task cut out. He has to closely monitor the progress on the power generation front to ensure there is no slippage in the current Plan. A significant feature in this Plan's target is the relatively minor role accorded to the private sector and this perhaps reflects the failure of past attempts to enthuse independent power producers to step in.

Realising the importance of the power sector, many of the State Governments have undertaken crucial reforms and signed MoUs with the Centre to complete this process by accessing funds under the Accelerated Power Development and Reform Programme. They are thus committed to restructuring their State Electricity Boards and helping them turn the corner. Containing transmission and distribution losses, detecting and stamping out `theft' and providing budgetary support for any subsidies that the boards have to bear are some of the features of the reform programme that the States have embarked on. The Electricity Act, which took a long time to get through Parliament so that the Centre could build a consensus, should also enable the States to speed up the reforms. If the States want to avoid `privatisation' of transmission or distribution, the only way forward is to curtail line losses and ensure 100 per cent billing of all supplies so that the power boards increase their revenue and can augment generation.