Another speed bump on India's economic road

Electricity Crisis Hobbles an India Eager to Ascend

Look up at the tops of buildings, and on any given day, you are likely to find three, four or six smokestacks poking out of each, blowing gray-black plumes into the clouds. If the smokestacks are being used, it means the power is off and the building — whether bright new mall, condominium or office — is probably being powered by diesel-fed generators.

This being India, a country of more than one billion people, the scale is staggering. In just one case, Tata Consultancy Services, a technology company, maintains five giant generators, along with a nearly 5,300-gallon tank of diesel fuel underground, as if it were a gasoline station.

The Gurgaon skyline is studded with hundreds of buildings like this. In Gurgaon alone, the state power authority estimates that the gap between demand and supply hovers around 20 percent, and that is probably a conservative estimate.

For all those who suffer from crippling power cuts in cities like this, there are others who have no connection to electricity at all. According to the Planning Commission of India, 600 million people — roughly half the population — are off the electric grid.

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Driven by the increasing need for power, India has stepped up generation in recent years at the pace of about 6 percent a year. It is a pittance compared with what neighboring China adds on each year and in any case insufficient to keep up with India’s galloping demand.

The government has promised electric connections for all — which means access to the grid, not round-the-clock power — by 2009. That is a target that does not seem plausible at current rates of power generation.

The development of power plants, meanwhile, is constrained by a lack of access to land, fuel and water, all of which a power plant needs in large quantities. The power grid remains weak.

In Gurgaon, for instance, transformers routinely blow out because of heavy loads. Voltage fluctuations damage electrical appliances of all sorts.

What the state cannot provide efficiently, many take for themselves. The World Bank estimates that at least $4 billion in electricity is unaccounted for each year — that is to say, stolen. Transparency International estimated in 2005 that Indians paid $480 million in bribes to put in new connections or correct bills.

For Indian business, coping with chronic power shortages is a part of the cost of business.

At Tata, company managers took pains to say that power shortages did not hinder their ability to meet deadlines for their clients.

“The work as such does not suffer,” said Gurinder Virk, an assistant general manager. “We have sufficient stocks of diesel at all times.” Behind the building, three generators purred as a sweltering evening descended. A 2004 World Bank survey found that 60 percent of companies in India have such facilities.

A modern economy requires access to electricity and that power has to be affordable. Currently India is making due but the status quo can't last forever. Especially with increasing fuel costs. At some point when it becomes to expensive to do business foreign companies will start leaving.

Oh and by the way Iraq averages 10.9 hours / day nationwide and 5 hours / day in Baghdad. Maybe the media should find another metric to show how poorly things are going there.

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