Powerless Punjab: Energy crisis badly battering industry

When will the government wake up to save the drowning country is a question that remains unanswered to date. With the countrys worsening position in all aspects- be it the law and order, legal, political, education and health or tourism; the seemingly impossible-to-solve energy issue is busting holes in the economy.
According to industry sources, the ongoing energy crisis has resulted in about 40 percent production loss for industry, with about 30 percent decline in the exports from Punjab alone.
Despite desperate attempts of industrialists to arrange for alternate energy sources and private production of electricity, delivery delays and sub-optimal capacity utilization are common features impeding the attainment of export targets.
There is a dire need to build future growth capacity in the country, but this seems impossible with the lukewarm activity on the investment front. The "wait and see" approach of investors is crippling the already stunted GDP growth of the country.
Given the current situation of the economy, it would be unreasonable to say that the government will be able to meet its set revenue target. Borrowing from the banking sector will push up the cost of credit, adding to the disinterest of the private investors.
The solution to the issue is simple: in the short-term, there needs to be an allocation of 10 percent of the budget to energy development each year. The execution of this, however, requires the unrealistic assumption of zero corruption and prudent decision making at the top.
Last year, although the government allocated Rs80 billion from the budget for energy development, there were no visible efforts to control the problem. As a result, the piled up requirement now amounts to roughly Rs200 billion. With shrunken revenues due to production losses, how the authorities will manage the aggregated amount will be interesting to see.
Unemployment is another consequence of the power crisis. With the supply and demand gap of 5,000 to 6,000 MW, industries that used to operate three shifts are now making do with just eight hours of activity. The impact on job creation cannot be overstated. The authorities seem to have missed the protests of the helpless producers and workers against the current economic situation.