The correct option is Excessive profits made by State Electricity Boards (SEBs)..
Explanation
The Indian power sector operates through three main verticals: Generation, Transmission, and Distribution. While significant progress has been made in generation capacity, the sector faces structural bottlenecks, particularly regarding fuel security, operational efficiency, and the financial viability of distribution entities.Analysis of Options:
- Insufficient installed capacity to feed high economic growth. is a challenge: Although India has increased its installed capacity significantly, ensuring that capacity keeps pace with the projected energy demands of a high-growth economy remains a continuous planning challenge.
- Under-utilization of installed capacity. is a challenge: The sector faces the issue of under-utilization of installed capacity, often indicated by a low Plant Load Factor (PLF) in thermal power plants. This is caused by fuel shortages and the inability of financially stressed distribution companies to purchase power.
- Excessive profits made by State Electricity Boards (SEBs). is NOT a challenge (The Correct Answer): State Electricity Boards (SEBs) and Distribution Companies (DISCOMs) do not make excessive profits. Conversely, they are the weakest link in the power sector value chain, suffering from chronic financial losses, high debt, and high Aggregate Technical and Commercial (AT&C) losses. Initiatives like the UDAY scheme were specifically introduced to rescue SEBs from financial distress.
- Shortage of raw material and coal supplies for thermal plants. is a challenge: A significant portion of India's power generation is thermal-based. These plants frequently face disruptions due to the shortage of coal and logistical constraints in raw material supply chains.
Key Takeaway:
The primary crisis in the Indian power sector is the financial insolvency of State Electricity Boards (SEBs), driven by tariff gaps and operational inefficiencies, rather than excessive profitability.