Deepak Parekh committee on Infrastructure submits report

October 7, 2014

The High-level government committee on infrastructure headed by Deepak Parekh submits the last part of its report in October. The Committee consisted of Uday Kotak, G.M.R Rao, Sanjay Reddy and top officials from LIC, SBI, ICICI and IDFC.

Some of their proposals are as follows:-

Establish a PPP model for power distribution, starting first with the cities
Modernise public sector distribution companies. The viability gap for such companies should be funded by the Central government
Earmark 15% of power generation of the central PSUs for open access customers so that the market becomes more competitive in an attempt to attract the open access clientele. This is also expected to increase investment in the electricity sector. (Open access customers refers to customers who buy in bulk and can directly choose where to buy their electricity from, according to the Electricity Act, 2003. Hence, the open access customers at least will not have to rely on the state controlled power distribution companies
Tariffs should be rationalized with a grading system that distinguishes between consumers depending on their paying capacity. Also, high income households, commercial consumer and industries should eventually be moved to market based pricing. The consumers subject to market based pricing may be allowed to choose from different suppliers of electricity. Low income consumers, however, should be subject to low tariffs and their requirements should be met with supplies from depreciated power station
Privatise coal mining wherein Coal India or its arms/subsidiaries can retain ownership of mines
Constitute a High level task force headed by a deputy governor of RBI to decide on measures to restore the health of power projects facing financial trouble due to scarcity of fuel
Fixed charges of a reasonable amount should be apportioned to idle power plants

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