The Indian Government has been working to attract private participation in the electricity sector for over two decades. Following a relatively unsuccessful attempt in the 1990’s, it introduced the Electricity Act in 2003 to drive development. With the Act now 10 years old, the sector has come full circle – from emerging as one of the most attractive investment destinations in the late 2000s, private investment has since receded.
An assessment of the last 10 years reveals that while the sector has not delivered on its objectives, this is less because of flaws in the Act, and more due to poor execution, unprecedented fuel price increases and project execution bottlenecks. In fact, the Act provides a strong platform for development if certain critical learnings are incorporated as the sector moves forward.
With the Act completing 10 years, CII, in partnership with McKinsey, decided to analyse the development of the sector. In particular, it sought to understand the evolution of the sector towards meeting the objectives of the Act, what were the Acts’ key successes and where did the industry fail, what the most important learnings are, and what should be the next steps for the Indian power sector. The CII-McKinsey report was released at the Roundtable Session on Assessment of 10 Years of Electricity Act 2003 organised by CII on 12 November 2013 at New Delhi.