Undeterred by the prospective shortfall of 30 per cent, a Yojana Bhavan spokesman has pointed out that this performance will be better than that of the Eighth Plan. Such consolation is hardly meaningful in the context of the higher GDP and industrial growth targets of the Ninth Plan.

Since the recessionary tide is slated to reverse this year, the issue really is whether the shortfall in capacity creation in power will not damage the prospects of a sustained acceleration of industrial growth. The reckoning is that the slippage will be mainly in the private sector which is expected to establish 8,500 MW against the targeted 17,600 MW. Three-fourths of the estimated shortfall will be in private generation. But shortfalls in new capacity creation in the public sector, could be larger thanvisualised. Of the 12000 MW allocated to the Centre, only 2950 MW will be established by 2000; likewise, the states will have added 5600 MW by 2000 out of the targeted 10,750 MW. The public sector will have to establish 14,000 MW in the last two years of the plan, a substantial chunk of which is bound to spill over to the Tenth Plan in view of the funding crunch. The shortfall in the power target is likely to exceed the initial reckoning.

The public sector's funds' constraint was the rationale for getting the private sector to establish 44 per cent of the new capacity in the Ninth Plan. But the independent power producers wanted the public sector to underwrite the viability of their investments. They sought guaranteed return and power offtake at predetermined prices. This has created problems for even a rich state like Maharashtra. Since guarantees are not feasible beyond a point, their issuance was stopped, only to be followed by the creation of escrow accounts. But escrows, under which power generatorshave the first claim on revenues of SEBs, cannot be created indefinitely. The escrow capacity of the giant UP electricity board, is currently put at 1500 MW. The FIs are averse to non-recourse finance for power projects- with lien confined to the assets of aided power projects -- ostensibly because they have lent to the hilt to promoter groups (for other projects). Private power projects seem to have gone off-course.

But power in the public sector is hardly secure. NTPC has mega dues from the states which find their plan allocations cut to settle their power bills. The states are in straits and the Centre is far from flush. Power policy must retreat from the blind alley it has entered, and make a fresh start with reform without blinkers.