Concerned over constant slippages in capacity addition target and rising subsidy burden, the Economic Survey on Thursday stressed on improving financial viability of power utilities, particularly in states, to overcome the crisis.

As per revised estimates, the gross subsidies for the power sector would grow to Rs 43,132.6 crore (Rs 431.32 billion) for 2007-08 as against the provisional figures of Rs 40,054 crore (Rs 400.54 billion) for 2006-07, the Economic Survey said.

The amount could rise to Rs 46,087 crore (Rs 460.87 billion) in 2008-09, it said. "Improving financial viability of power utilities is one of the key deliverabilites of power sector reforms," the Survey said, adding that the growth in this space has been "modest as compared to the robust performance in manufacturing and services".

As against the government claims of making concerted efforts to improve power situation, generation in the first nine months of 2007-08, the first fiscal of 11th plan period, decelerated from the previous year's level.

Growth in power generation slowed down to 6.6 per cent in April-December of fiscal 2007-08 as compared with 7.5 per cent in the corresponding period of 2006-07, said the Survey.

"Electricity generation by power utilities during 2007-08 was targeted to go up by 7.2 per cent to 710 billion units. The growth in power sector was lower than the targeted growth rate," it said, adding that the power sector is expected to grow at 9.5 per cent per annum during the 11th plan.

Economic Survey 2007-08: Complete Coverage