Prime Minister Manmohan Singh on Monday expressed concern over the slow rate of progress in power sector as compared to manufacturing and service sectors, which have logged double digit growth rates in the lest few year.

Addressing the Chief Ministers' conference on the power sector here, Singh said: "Electricity is vital for sustained economy growth. If we expect the economy to keep growing at 9-10 pere cent, we need a commensurate growth in power supply."

"Today the scene in the power sector does not look very promising. We are having an energy shortage of around 10 per cent and a peaking shortage of over 13 per cent. And some states peaking shortages touch 25 per cent," the prime minister pointed out.

Saying that "theft is the cancer of the power sector," Singh said that the issues to be discussed in priority would be about with transmission and distribution losses. The current level of losses in transmission and distribution, ranging between 30-45 per cent in many states, threatens the financial health of the sector.

The prime minister urged the states to reduced T& D losses and bring them within reasonable limits in a short time frame. The central government would provide financial assistance to states that are able to reduce these losses to agreed levels.

Singh noted that there is one factor which differentiaties the power sector from the telecom sector for its inability to attract private investement on a significant scale.

The power sector needs an investment both in capacity addition and in upgrading the transmission and distribution systems at over Rs 600,000 crores (Rs 6,000 billion), Singh pointed out.

He also said the "key to attracting investment, particularly from the private sector, lies in ensuring open access to consumers". It will encourage investment and also competitive pressure on the incumbent utility.

"Open access and competition is the key to improved and greater investment," the prime minister said and added, "States need to actively encourage bulk consumers to source their requirements from alternative suppliers so as to increase the total availability of electricity in the system, especially for the household and farm sector."