Hike in Import Duty on Power Equipments will Hurt in India

India is in the midst of a massive power crisis with shortage of coal being cited as one of the key reasons. However, speaking to CNBC-TV18, Mr Arup Roy Choudhury CMD of state run power generator NTPC said, things have definitely improved in the last couple of weeks.

The mining space was under severe stress of late with a barrage of issues ranging from political agitation to worker strikes. He said that "We also had the aftereffect of the monsoon season to deal with adding that but all seems well going forward, and the generations have again picked up."

NTPC's plant load factor or PLF is up over 90%. Mr Choudhury expects that power generation to be much better in the third quarter compared to the previous one.

On the issue of imported coal, Mr Choudhury said, it is not a viable option for Indian power producers. He states that "We have to look at power generation through domestic coal."

An important government meeting is scheduled on Nov 7, 2011 to consider imposing duty on imported power equipment. According to Mr Choudhury, any increase in import duty will be a negative for NTPC. He added that "It will have a direct ramification on power prices."

Last week, boosted by a better than expected top line growth, NTPC posted a 15% rise in net profit at INR 2,424 crore during the second quarter of the current fiscal.