Make efforts to attract more FDI: Parliamentary panel to Power Ministry

NEW DELHI: Amid multiple woes hurting the power sector, a Parliamentary panel today asked the Power Ministry to make efforts to attract more foreign direct investments into the sector.

Currently, Foreign Direct Investment ( FDI) up to 100 per cent is permitted in the power sector.

"In the present power sector scenario, all efforts need to be made to attract FDI as these funds bring along new technologies, inputs and skills sets," the Committee on Estimates said in its report tabled in the Lok Sabha.

Citing the Economic Survey 2011-12, the panel -- chaired by Francisco Sardinha -- said there are financial health and viability issues across the entire spectrum of power sector generation, transmission and distribution.

"The Committee therefore strongly reiterate the Ministry of Power should revisit the incentive structure for FDI in power sector and take pro-active steps to attract desired quantum of FDI flows," it said.

Further, the panel emphasised that it is essential that the Ministry also comes out with a blue print to chalk out future strategies in this regard.

A slew of issues such as persisting fuel shortages, poor health of distribution companies and environmental hurdles, are hurting the domestic power sector -- which aims to have a generation capacity addition of about 88,000 MW in the 12th Five-Year Plan (2012-17).

During the 2007-12 period, the country witnessed a capacity addition of 54,964 MW as against the initial target of 78,700 MW.

The Ministry informed the panel that various factors, including environmental issues, resulted in slippage in terms of capacity addition.