The unprecedented electricity crisis in northern India may result in disruption of work and likely closure of 25 percent of micro, small and medium enterprises in the region and pull down their overall industrial production by a whopping 40 percent, a survey released last week has cautioned. The worst hit states are Punjab, UP, Haryana, Rajasthan and Delhi. The situation is no less serious in the southern part of the country, with Andhra Pradesh, Karnataka and Tamil Nadu likely to face energy shortages to the extent of 2,111 MU. Electricity is dwindling everywhere.

Power shortage is nothing new to our MSMEs. Nearly every small business owner in India views it as one of the biggest challenges facing the sector. In many states, long power cuts hit normal life daily — production in industrial units is also affected and those which are in manufacturing, particularly the small firms that cannot afford diesel-based power generation for long hours have to bear the brunt of it. Demands for a solution have never been taken seriously, no sincere efforts have been made, and now the situation has turned from bad to worse.

India is structurally short of electricity, but many view that this is not the only reason behind the power crisis — populist measures and subsidies are equally responsible. At state level, politicians regulate for cheap electricity. In some instances, farmers are provided free or low-cost power and the burden of this has to borne by the state power distributing companies. As a result, these companies are increasingly finding themselves in debt to the power generation companies. We need to free the power infrastructure from this mess.

The country primarily depends on coal for electricity and there is little doubt that we have to depend on this mode of power generation for many years to come. The 12th five-year plan anticipates that about 76 gigawatts of new power will be added by 2016-17, with around 82 percent of this power generated from coal. This will require about 842 million tonnes of coal a year. This is a big target and to achieve it new mines must be built and railway bottlenecks must be removed. This, in turn, also requires removing the multiple bureaucratic layers to attract investors.

Alternative energy sources, particularly solar energy, also need to be aggressively pursued. India is densely populated and has high solar insolation and this is an ideal combination for solar power generation. I think time has come now to focus on implementing the National Solar Mission which has set an ambitious target of deploying 20,000 MW of grid connected solar power by 2022. Success in this mission will help us not only to save thousands of small businesses from closure but also to light up millions of homes in the country that still don't have access to electricity.

I invite your feedback.