November 18, 2014

IDFC CEO sees 'devastating reaction' if Budget disappoints

Rajiv Lall expresses his expectations from the upcoming budget and said that said that if the Budget disappoints, there would be a “devastating reaction” in the markets. When asked about the problems faced by the power sector, Lall explained “I will give you a sense, it is very complex. There are 2.5 lakh megawatts of generating capacity overall that exists in the country that is operating. There is another 50,000 megawatts that is under construction that is supposed to come on-stream by 2017. Of these 3 lakh megawatts of capacity, about 1 lakh megawatts is facing some kind of difficulty. Now of this 1 lakh megawatts, about a quarter is on account of non availability of gas so that is 24,000 megawatts out of 1 lakh. There is another 25 percent that is on account of domestic coal not being available as expected. If we get the domestic coal production significantly raised in a relatively short period of time, you have addressed at least a quarter of our problems in the power sector. If you are able to find a solution for gas then you have solved another quarter that is half of your problems are taken care of. So if the coal secretary tells you and he has inspired confidence in you that government now have a measure on domestic coal production, that is very positive. If we in the next three-four years are able to raise production just through the coal auction route by another 150 million tonnes, that is huge.

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