Photo: PTINew Delhi: The success of Prime Minister Narendra Modi’s ambitious plan to electrify all households in India by December 2018 faces a familiar hurdle: the money-losing state power retailers. Convincing states to allow profitable power tariffs will be Modi’s biggest challenge in fulfilling the pledge that helped him rise to power in New Delhi in 2014. Years of selling electricity below cost has eroded discoms’ ability to invest in infrastructure, buy enough power from generators and repay bank debts. Even if all rural households get power, making adequate returns on their investment will be a challenge for retailers given the low-usage pattern. “Poor cost recovery can result in poor maintenance and thus huge investments in network infrastructure can go waste.” Bloomberg

Source: Mint September 28, 2017 03:00 UTC