The Union Cabinet today gave its approval to the proposal on National Electricity Policy as provided for in the Electricity Act, 2003.  Supply of electricity at a reasonable rate to the rural areas is essential for overall development.  Of equal importance is the availability of reliable and quality power at competitive rates to Indian industry to make it globally competitive and to enable it to exploit the tremendous potential of employment generation.

Indian Power sector is witnessing major changes.  Growth of power sector in India since Independence has been noteworthy.   However, the demand for power has been outstripping the growth of availability.  Substantial peak and energy shortages prevail in the country.  This is due to inadequacy in generation, transmission and distribution, as well as inefficient use of electricity.  The National Electricity Act, 2003 provides for an enabling framework for accelerated and more efficient development of the power sector.  The Policy aims at achieving the following objectives :

·         Access to electricity  to be available for all households within the next five years;

·         Availability of power demand to be fully met by 2012.  Energy and peeking shortages to be overcome  and spinning reserve to be available;

·         Supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates;

·         Per capita availability of electricity to be increased to over 100 units by the year 2012.

·         Minimum lifeline consumption of one unit  per household per day as a merit good by the year 2012.

·         Financial turnaround and commercial viability of electricity sector; and

·         Protection of consumers’ interest.

The Policy aims at laying down the guidelines for accelerated development of the power sector, providing supply of electricity to all areas and protecting interests of consumers and other stakeholders, keeping in view the availability of energy resources, technology available to exploit these resources, economics of generation using different resources, and issues related to energy security.

The National Electricity Policy has been evolved in consultation with the State Governments, Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC) and other stakeholders.

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