Foreign and Indian Experience in Policy and Regulatory Issues and Challenges for Private Investment in the Indian Power Sector

The power sector in India is dominated by the State and Central Government sectors accounting for 42.91 % and 29.89 % of the generation capacity, respectively; while the private sector accounts for about 27.18 % as on 31.03.2012. The bulk of the transmission and distribution functions are with State utilities. The private sector has a small but growing presence in distribution and is making an entry into transmission. Power Sector, which had been funded mainly through budgetary support and external borrowings, was opened to private sector in 1991. Electricity is considered key driver for targeted 8–10 % economic growth of India. The vast Indian power market, today offers one of the highest growth opportunities for private developers.