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Power sector
Power sector consists of: 1.power generation 2.power transmission 3.power distribution
Loss generation
Financial institution decided to stop lending to power distribution companies, in all these distribution companies losses exceeded 5000 crore. Estimated losses by 2014-15 will be 150,000 crore for state electricity boards, creating an alarming situation for electricity producers & consumers.
Leads to
Borrowing money as short term loans as high as 14-15% to meet their debt obligation. Weak finances not allow distribution utilities to purchase power & restoring to load shading. Power generation not finding takers for their produce.
Solution
Non approval of expenses by state regulators on account of non achievement of efficeniecy targets & lack of capital investments by utilities due to poor financial health has become a vicious circle. Need to be broken down with through appropriate inventions such as advancing efficiency & other improvement programs
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