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Chairman's Message

Dear Friends,

My colleagues on the Board join me in extending a warm welcome to you on the Ninety Fourth Annual General Meeting of your Company.

India’s GDP growth for the second successive year was less than 5%. The year is likely to be a slow recovery year. However, with a stable government at the center, the economy is expected by most to revive at a faster pace.

With an installed capacity of 243 GW, India is the fifth largest power producer in the world. India’s power generation capacity consists of thermal (69%), hydro (17%), renewable (12%) and nuclear (2%) sources. However, the increase in the last year in the installed capacity was mere 19 GW.

As far as electricity is concerned, coal is expected to remain the largest source of fuel (over 35%) over the next 20-25 years. Domestic coal production has been stagnant in the last seven years, while demand from coal based generation capacities has continuously risen over these years. However, the coal sector at present has become jaundiced with various regulatory, investigative and judicial issues. Many coal mines allocated to power producers are on the anvil of being rescinded. The irony is that inspite of our country having about 300 billiion tonnes of coal reserves, we have to import large quantity of coal and even after that the power plants are not able to get coal upto their need. The only panacea for the Government of India, is to appoint Mining Development organisations that can augment production and productivity. It would be both fast and sustainable.

The Government understands the criticality of the power sector. Several steps have been announced in the Union Budget 2014-15 to facilitate growth in the power sector:

  • Rationalizing coal linkages
  • 10 years’ tax holiday has been extended for power companies starting production and distribution by March 31, 2017.
  • Rs. 500 Crores allocated for Setting-up of Ultra Mega Solar Projects in Tamil Nadu, Rajasthan, Gujarat and J&K to promote Renewable energy.
  • Rs. 400 Crores allocated for development of solar power driven farm equipments.
  • Another Rs. 100 crore has been allocated for cleaner thermal energy scheme.
  • The concessional basic customs duty of 5% has been extended to machinery and equipments required for setting up solar projects, besides also lowering excise on some solar equipments.
  • A sum of Rs. 500 cores has been allocated for strengthening of transmission and distribution infrastructure in rural areas under the ‘Deendayal Upadhyaya Gram Jyoti Yojna’.

The Government of India has gone on record to commit that it would provide 24*7 Electricity to all households in the country by the year 2019.

The potential for power distribution, generation and transmission sector would remain huge in the foreseeable future.

Hemant Kanoria