Power supply worsened in Odisha despite huge investment, shows ASSOCHAM study
Despite Odisha attracting 12 per cent share in the new investments in the country's power sector, energy supply in the state has worsened due to rise in deficit, industry body ASSOCHAM said today.
"Odisha has attracted new investments worth about Rs four lakh crore of the total new investments worth over Rs 31 lakh crore attracted by the power sector from various public and private sources across India during 2004-05 and 2012-13," according to a study conducted by ASSOCHAM.
In attracting new investments in the power sector, Odisha ranks second after Gujarat.
Despite this achievement, condition of power supply in Odisha has worsened over the years as power deficit in the state had increased by about 2.5 per cent during the course of 2004-05 and 2012-13, it said.
This is mainly due to high growth in power demand as compared to that in power availability, the study titled "State-wise analysis of power sector: Consumption, demand & investment" said.
Besides, another worrying aspect is that only 43 per cent of households in Odisha have electricity facility available to them, it said.
Though, agriculture is the mainstay of the economy of Odisha, the state is lagging behind in farm infrastructure development as it is ranked 19th in terms of power consumption growth in agriculture sector, the study said.
In order to garner additional funds in power sector, the state government should lure private investment through a tax incentive scheme and facilitate quicker implementation of pending power projects, the ASSOCHAM study suggested.
Besides, efforts should also be made to promote power generation by tapping new and renewable energy sources like wind, hydro, bio-mass and solar.
During 2012-13, Odisha attracted new investments worth over Rs 3,318 crore in the power segment of which private sector accounted for a lion’s share of about 67 per cent as against 33 per cent share of public sector, said the study
"Flow of private investments is determined by attractiveness of investment opportunities as they are mostly driven by profitability considerations," said D.S. Rawat, national secretary general of ASSOCHAM while releasing findings of the chamber’s study.
"Bureaucratic efficiency, infrastructure and ease of land acquisition influence flow of private investments," said Rawat adding tax concessions, product market conditions and exit policies are effective tools to woo private investment.
With investments worth over Rs 16 lakh crore, Odisha accounts for third highest share of about 33 per cent in total outstanding investments worth over Rs 49.5 lakh crore attracted by power sector across India as of 2012-13 clocking compounded annual growth rate (CAGR) of about 26.5 per cent, said the study by ASSOCHAM Economic Research Bureau (AERB).
Odisha has also taken a great leap forward in this behalf as the total outstanding investments in power sector attracted by the state have increased from over Rs 1.6 lakh crore as of FY 2004-05 thereby growing at a CAGR of over 33 per cent.
Besides, the state share has improved drastically from just about six per cent to about 33 per cent, it said.
About 47 per cent of investment projects in the power sector attracted by Odisha were under implementation as of 2012-13 and the state has registered some improvement in implementation of power projects, the report said.
