Powering India

Index : 1,162 | 1Yr : +9.45% | 1Mo : -0.5%

Category : Sectoral Trackers

Min Investment : 1,915

Sharpe Volatility Trend

In spite of India being the third largest producer of electricity in the world with an installed capacity of over 300 Gigawatts, around 30% of India's population does not have access to electricity. India has come a long way to become a power surplus country but due to the the lack of proper infrastructure and management, India is inefficient with power utilization and thus has a very low per capita consumption per person. This is primarily because the power distribution companies (DISCOMS) do not have purchasing power, thereby causing power deficits.

Since the majority of power generation is through fossil fuels, the sector is sensitive to the price of energy commodities such as coal, diesel and Liquified Natural Gas (LNG). Hence, the demand supply of these commodities has a significant impact on power generators.

The Government of India has launched ambitious schemes to turnaround this sector. One of them is called "Power for All" which is a programme to ensure that power necessities of the entire country are met by 2019. It calls for a collaboration of the central and state governments on funding and overall co-operation. The other initiative is Ujwal DISCOM Assurance Yojana (UDAY) which aims to turnaround the public sector power distribution companies by helping them eradicate outstanding debt obligations.

Going forward the power sector is poised to grow at a healthy rate. The government has prioritized this sector and helped in moving the the stuck-up projects to kickstart a new cycle.

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