Energy Shortage Constrains India's Economic Growth

Energy shortages in coal, natural gas, and diesel fuel are constraining India's growth. At the heart of the shortages are government subsidies that keep prices low, state-run monopolies that are unable to increase production, and costly imports.

2 minute read

July 3, 2012, 10:00 AM PDT

By Irvin Dawid


Indian correspondents Amol Sharma and Megh Bahree describe how the shortages of all three fossil fuels hamper economic growth in the sub-continent.

"A shortage of coal, which accounts for more than half of the nation's energy supply, is crippling the power sector, forcing companies to delay the opening of multibillion-dollar projects. India in April announced an 80% jump in coal imports ...but many plants still run below capacity for lack of coal."

Electricity shortages have resulted in clinics being forced to dump vaccines due to lack of continual refrigeration. As many as 400 million rural residents may lack access to electricity.

Coal shortages are largely a result of the inability of Coal India, India's state-run monopoly, to produce enough due to many factors, including old equipment and security threats.

The video shows an operator at a new plant explaining that he has only five days worth of coal stock - when a month's worth should be available.

"(Prime Minister Manmohan Singh) is beginning to realize that there's a very bleak outlook in terms of energy security, and that this is going to create the single largest constraint on the economy", said one energy consultant.

Deregulation of energy will be challenging.

"State-run energy companies are racking up billions of dollars in losses by selling auto fuel, cooking gas and electricity at artificially low prices to protect consumers from global cost increases." Consequently, residents expect low prices on these fuels.

"India has a very distorted system of subsidies," Jaipal Reddy, minister for petroleum and natural gas, said. "But how, in a vibrant democracy like in India, do you change the system suddenly?"

Note: Link to article without WSJ subscription may be time-limited.

Monday, July 2, 2012 in The Wall Street Journal

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

June 25, 2025 - Diana Ionescu

Person wearing mask walking through temporary outdoor dining setup lined with bistro lights at dusk in New York City.

Restaurant Patios Were a Pandemic Win — Why Were They so Hard to Keep?

Social distancing requirements and changes in travel patterns prompted cities to pilot new uses for street and sidewalk space. Then it got complicated.

June 19, 2025 - Diana Ionescu

Map of Western U.S. indicating public lands that would be for sale under a Senate plan in yellow and green.

Map: Where Senate Republicans Want to Sell Your Public Lands

For public land advocates, the Senate Republicans’ proposal to sell millions of acres of public land in the West is “the biggest fight of their careers.”

June 19, 2025 - Outdoor Life

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1 - Honolulu Civil Beat

White and purple sign for Slow Street in San Francisco, California with people crossing crosswalk.

San Francisco Suspends Traffic Calming Amidst Record Deaths

Citing “a challenging fiscal landscape,” the city will cease the program on the heels of 42 traffic deaths, including 24 pedestrians.

July 1 - KQED

Tents inhabited by unhoused people lined up on sidewalk in Los Angeles, California in front of industrial building.

California Homeless Arrests, Citations Spike After Ruling

An investigation reveals that anti-homeless actions increased up to 500% after Grants Pass v. Johnson — even in cities claiming no policy change.

July 1 - Times of San Diego

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.