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Private participation in power - Enabling environment vital to energy security

In view of the widening electricity demand-supply gap, huge investment requirements and shortfall in investment targets, it is imperative for the government to create an enabling environment to attract greater private participation in the power sector.

India's energy sector is currently confronted with multiple challenges, which stem not only from supply-side constraints but also from demand pressures imposed by a buoyant economy and a growing population. As per recent Planning Commission estimates, if economic growth is sustained in the 7-8 per cent range, the energy demand would rise by at least 5.2 per cent annually.

In the face of relatively inflexible supply options, the gap between energy requirement and availability can only be expected to widen in the future. This gap raises serious concerns, not only about the country's energy security but also on the sustainability of its economic growth momentum. On a more micro-level, the shortage could lead to rising incidence of power outages and greater import dependency on fossil fuels such as crude oil and coal.

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