Odisha Sun Times Business Bureau
Bhubaneswar, Sept 8:
With 12 per cent share, Odisha is second only to Gujarat in terms of share in new investments attracted by power sector in India, apex industry body ASSOCHAM said in a release today.
“Odisha has attracted new investments worth about Rs four lakh crore of the total new investments worth over Rs 31 lakh crore attracted by the power sector from various public and private sources across India during the course of financial year (FY) 2004-05 and FY 2012-13,” according to a study titled ‘State-wise analysis of power sector: Consumption, demand & investment,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
During the FY 2012-13, Odisha attracted new investments worth over Rs 3,318 crore of which private sector accounted for lion’s share of about 67 per cent as against 33 per cent share of public sector.
“Flow of private investments is determined by attractiveness of investment opportunities as they are mostly driven by profitability considerations,” said Mr D.S. Rawat, national secretary general of ASSOCHAM while releasing findings of the chamber’s study.
“Bureaucratic efficiency, infrastructure facilities, and ease of land acquisition influence the flow of private investments,” said Mr Rawat. “Tax concessions, product market conditions and exit policies are effective tools of private investment attraction.”
With investments worth over Rs 16 lakh crore, Odisha accounts for third highest share of about 33 per cent in total outstanding investments worth over Rs 49.5 lakh crore attracted by the power sector across India as of FY 2012-13 clocking compounded annual growth rate (CAGR) of about 26.5 per cent, highlighted the study prepared by The ASSOCHAM Economic Research Bureau (AERB).
Odisha has also taken a great leap forward in this behalf as the total outstanding investments in power sector attracted by the state have increased from over Rs 1.6 lakh crore as of FY 2004-05 thereby growing at a CAGR of over 33 per cent, besides, the state share has improved drastically from just about six per cent to about 33 per cent, further noted the ASSOCHAM study.
About 47 per cent of investment projects in the power sector attracted by Odisha were under implementation as of FY 2012-13, the state has registered some improvement in implementation of power projects as over half of projects were under implementation as of FY 2004-05.
However, despite attracting massive investments in the power sector, condition of power supply in Odisha has worsened over the years as power deficit in Odisha had increased by about 2.5 per cent during the course of FY 2004-05 and FY 2012-13 mainly due to high growth in power demand as compared to that in power availability, the study further noted.
Besides, another worrying aspect is that only 43 per cent of households in Odisha have electricity facility available to them.
Though, agriculture is the mainstay of the economy of Odisha, but the state is lagging behind in agriculture infrastructure development as the state is ranked 19th in terms of power consumption growth in agriculture sector.
In order to garner additional funds in the power sector, the state government should lure private sector investment through a tax incentive scheme and facilitate quicker implementation of pending power projects, suggested the ASSOCHAM study. “Private sector players should also be encouraged to invest in untapped regions having large potential for setting up power plants.”
Besides, efforts should also be made to promote power generation by tapping new and renewable energy sources like wind, hydro, bio-mass and solar.
While 65 per cent of the total investment projects in the power sector attracted by India were under implementation as of FY 2012-13 which has only increased from previous level of 61.5 per cent as of FY 2004-05, noted the ASSOCHAM study.
“The Centre must focus on smooth implementation of power projects as slow pace of implementation transforms into huge financial losses for investors, ” the ASSOCHAM release said.