Power Minister Sushil Kumar Shinde has asked State governments to proactively facilitate land procurement for power projects to help in meeting the capacity addition target of 88,000 MW over the next five years.
He said that the issues of fuel supply to plants and deteriorating financial health of state power distribution companies are roadblocks impeding the functioning of the power sector and need to be addressed urgently. He added, that the focus in the 12th Plan period has to be on increasing domestic coal production.

Shinde said that the problem of land is no less in the setting up of the transmission infrastructure, given the fact that in the current plan period there is a target of erecting some 37,800 MW of inter-regional transmission capacity.

Planning Commission Member (Energy) B K Chaturvedi said the major focus in the next five years would be on renewables. The share of renewables will increase to 30,000 MW in the 12th plan, from 14,000 MW in the 11th plan.

Shinde also pointed out that the single biggest threat to the viability and sustainability of the power sector is the deteriorating financial health of the distribution utilities in most states. He said that to make optimal use of the generation capacity involved there is a need to adopt a proactive approach in the procurement of electricity from gas-based generation plants to encourage the use of domestic gas and Liquefied Natural Gas (LNG).

Meanwhile the Cabinet is likely to soon take up the proposal of restructuring about 2 lakh crore rupees debt of power distribution companies. As per the proposal, about 50 per cent of the debt would be converted into bonds, that will be issued by the state governments.