For instance, a 6 per cent real growth in GDP should be accompanied by 9 per cent growth in power availability. But the chicken and egg analogy would elude a conclusive answer even in this case. Either way, inadequate investment in power would cost the economy dear.

All sectors of the economy have gargantuan appetite for power. The energy consumption of sectors, viz industry at 50 per cent, agriculture at 24 per cent and domestic consumption at 15 per cent proves the dependence of the economy on power infrastructure.

A study conducted in the early 80s estimated production losses owing to power shortages to be as high as 1.5 per cent of GDP. Recognising the government's inability to meet its energy needs, industry has turned to captive power, which nowprovides as much as 48 per cent of its requirements.

Trend and Prospects: The average growth of energy demand, which was 8 per cent in the 80s, decelerated to 7.5 per cent in the first half of the 90s. Considerable slippage in capacity additions has given rise to peaking and energy shortages of 29 per cent and 15 per cent respectively.

The Rakesh Mohan committee, in its India Infrastructure Report, suggested an addition of 83,525 mw, at an investment of Rs 4,683 billion for generation, transmission and distribution, over a decade, thus more than doubling the then existing installed capacity at the end of 1995-96. The investment for the period was arrived at considering feasible improvement in efficiency and saving in power and a fixed average price of $1 million per mw of generation capacity added.

The committee further said that over 30,000 mw of power-generation capacity needs some form of renovation and modernisation. The likely benefits in terms of extra peaking capacity and energy to berealised through renovation and modernisation was estimated to be equivalent to 5,000 mw.

But the capacity additions during the first three years in the time frame of the report as shown in the table , have trailed far behind the recommended additions.

Even the addition of 3,300 mw in 1998-99 is suspect, as the budgeted expenditure is unlikely to take place. The 1998-99 outlay for power assumes much of the investment funded though internal and extra budgetary resources - essentially funds raised by public-sector undertakings on their own. The efficacy of raising resources of that order is doubtful considering systemic constraints. For instance, the power ministry could not utilise over Rs 2,000 crore in 1997-98 because the central utilities could not raise the required internal and extra budgetary resources. Resource mobilisation would continue to play a key role in the development of the power sector.

Realising the resource intensity of this sector and the financial stringency of the state,infrastructure, which till now was a state monopoly, is now being opened to the private sector. Despite the government's measures to attract private-sector investment, the response has been lackluster due to litany of constraints such as low returns, policy opacity, procedural bottlenecks, high transaction costs and legal hurdles.

To strengthen this vulnerable underbelly of the Indian economy, several measures have been initiated. Measures such as greater flexibility to tap the external commercial borrowings market, establishment of the Infrastruture Development Finance Company (IDFC) as a private company with public funding and promulgation of an ordinance to set up regulatory authorities at the state and central levels were aimed at attracting investments. These measures were followed up with further steps in the 1998-99 union budget, which hiked the outlay in the power sector by a whopping 46 per cent over the revised estimates of 1997-98 to Rs 10,906 crore. The budget, inter alia, envisaged securitisingdues of PSUs from the state electricity boards, concessions in direct taxes and floating of the Resurgent India bonds by the State Bank of India to solicit investments from non-resident Indians. These measures may have a limited impact.

India is bestowed with immense natural endowments for power generation. Less than one-third of its hydel potential of about 85,000 mw is utilised. The estimated domestic potential of non-conventional energy sources is: 20,000 mw from Wind, 10,000 mw from small hydro, 3,500 mw from bagasse-based co-generation, 80,000 mw from Ocean and 492 billion Kwh per annum from solar. But harnessing even a part of this potential would need huge investments as assessed by the Rakesh Mohan committee. This quantum of capital need would be exacerbated by a host of factors such as the falling rupee, higher interest rates due to downgrading of India's credit rating by Moody's, etc.

Issues like high transmission and distribution losses, voltage and frequency shortcomings and poor standards ofreliability cannot be addressed by investments alone.

The quantum of investment needed to put the power sector on an even keel is unlikely to be mobilised, notwithstanding the sops offered to attract private investment. It is, therefore, likely that power scarcity would continue to daunt the Indian economy for many years to come. The blues will not fade away.