IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 9, Issue 5 (Mar. - Apr. 2013), PP 11-17 www.iosrjournals.org www.iosrjournals.org 11 | Page Developments in Indian Energy Sector: Problems and Prospects Vineet Tiwari 1 , M.Kapshe 2 , A.Deshpande 3 , V.K. Khare 4 , 1 (Department of Management Studies, MANIT, Bhopal, India) 2 (Department of Planning, SPA, Bhopal, India) 3 (Department of Management Studies, NITTTR, Bhopal, India) 4 (Department of Mechanical Engineering, MANIT, Bhopal, India) Abstract : India is developing at nearly 8% economic growth. Several development initiatives have been taken by the Government of India (GOI) to sustain this economic growth. Continued development requires strong energy infrastructure to support this economic transformation in order to remain competitive. To meet the increasing energy demand, many projects have been planned and offered but could not be successfully implemented either on account of deficient legislative and regulatory structure or lack of coordination among execution agencies. It is observed that legislative and institutional frameworks are required to be in sync to facilitate the development process. This paper reviews the major problems faced by Indian energy sector, presents an analytical view of the future prospects and suggests possible measures that can help in improving the situation. Keywords – Energy, development, legislations, institutions, I. INTRODUCTION With rapidly changing socio-economic structure of the society, energy needs have increased significantly and the supply side is coming under pressure. This has raised the concern to economize on every aspect of energy sector value chain so as to meet the increasing demand in most efficient way. To address this concern, strong policy level initiatives and implementation strategies needs to be drafted and designed. Gaps need to be identified and addressed at planning level with well thought out execution mechanisms. Post liberalization, India has emerged as an economic powerhouse and is poised to grow at about 8% per annum over the next decade. It is likely that at present growth rates, India will be one of the top three economies of the world by 2030 along with the USA and China. To sustain economic growth of such proportions, concomitant growth in the infrastructure especially in the electricity sector is of paramount importance along with policy, legislative and administrative initiatives in almost across all the energy sector functionaries. Electricity constitutes a critical input to all major economic activities. It is evident that with continued peak demand deficit of 12-13% and energy shortage of 6-8%, India would not be able to achieve high levels of economic growth. „Electricity for all‟ is not only an economic imperative but also a social obligation. If India is to fulfill its dream of becoming an economic super-power, then the electricity sector has to play a central role in enabling this transformation. This is well recognized that to ensure growth in the electricity sector it is necessary to invite private sector participation. This will increase competition, breaking the monopoly and leading to development of true market dynamics. Therefore, Government of India (GOI) has been taking path-breaking initiatives on the policy, regulatory and the reforms front. Enactment of the Electricity Act, 2003 was an excellent first step towards creating an efficient and competitive electricity market. Several policy initiatives have been introduced, which have created an enabling framework for private sector participation. A critical element of the structural reform process, which is currently underway, is the movement towards independent market mechanisms. These market mechanisms are expected to introduce economic efficiencies into the system, create a level playing field for all players and introduce competition across all segments of the business. It is envisaged that the consumers at all levels in the value chain shall benefit from introduction of competition and provision of choice. The above mentioned reforms can only be achieved by having systematic legislative and institutional approach for the development of India‟s energy sector. In the 21 st century, energy supply and consumption, food crises and climate change are among the issues of major concern to the international arena. Remarkable growth has been registered in the energy sector after independence. It has made significant contributions to the national economy, social welfare and the basic energy needs of the Country. However, today energy sector world across is confronting a number of obstacles in energy reserves, population numbers, domestic and global environmental issues. It is also constrained by industrial and economic structures, financial resources, technologies, management systems, and consumers‟ culture of energy wastage.