The North Eastern and Eastern states of India have been endowed with huge natural resources in terms of minerals, forest, bio diversity and large river basins. As per 2001 census, although the regions have nearly 27.6% of the national population and a geographical area of 22.67%, they have remained somewhat left out in the India’s growth story. The economic indicators show that the regions are still way behind in comparison to the rest of India. They have over 75% of coal reserves and 45% of country’s hydro-electricity potential but it accounts for 15% of the country’s total installed capacity. The per capita consumption of only 315 units as against a national average of 704 indicates the low access to electricity of the regions.
Looking at the widening gap in demand and supply of electricity in future and to tap the coal and hydro potential, most of the states in the regions have geared up to generation capacity addition. This large capacity addition will require a huge investment which may not be possible without large scale participation by private players. Many policy level initiatives have been formulated to attract private investment to meet this huge capacity addition targets. Most of the states have un-bundled their erstwhile SEBs or are in process of unbundling to improve their financial viability which will be helpful in attracting private players. Of late, these initiatives/measures have started to show results and some of the states in the region have started to develop themselves as power hubs.
However most of the plans are delayed mainly on account of poor implementation and problems in Land acquisition, Rehabilitation & Resettlement issues and MOEF clearances. In some cases, socio-political disturbances posed problems to the safety of the employees leading to delay. In addition to the above mentioned issues, disputes on water sharing are hindering the utilization of full potential in north-eastern part of India. Also, state border issues like in the case of Subansiri are delaying the project development. Lack of high capacity transmission corridors is leading to congestion and resulting in bottling up of power in certain grid conditions leading to sub-optimal utilization of generation capacity. Further, poor implementation of distribution reforms coupled with metering and collection inefficiencies is choking the distribution segment. Combination of all these factors is acting as a road block for the potential investors.
This brief background note, an attempt is made to present the power sector profiles of eastern and north-eastern states of India along with various issues and challenges that need to be addressed in order to create a vibrant power sector in these states.