Nov
15
Cutting into Power and Reality
Posted by: Paul Dhaliwal | November 15, 2011 | Leave a Comment
India has often been lauded by business leaders as being a more desirable destination for their capital than China, solely based on the fact that India is a democracy. The prevalent belief amongst citizens of North America is that the Chinese economy is as it was during the 70’s; tightly controlled with little or no economic freedom. Whereas the Indian economy is believed to be safer for ones’ investments and relatively free of government intervention.
These beliefs are worlds away from reality.
The Economist recently published a damning article stating “India’s inexorably growing power crisis is a bottleneck that threatens to hobble its overall growth rate.” The reality is that of the top 100 Indian companies by profit, 40 are state-controlled, as if India is incapable of fully embracing privatization.
The consequences of this timid approach towards privatization are most readily seen in the issue of power in India, where power cuts are a reality of life in every state. 
The energy industry more than any other shows the prevalence of state control in India, and these power cuts are testament to state controls’ negative effects.
“Private capital has poured into building power stations, but most other bits of the supply chain are in the hands of the state. Often this set-up fails to deliver.”