Reforms will help harness full potential of deal

The historic agreement reached between the US and India on cooperation in nuclear energy marks a significant departure both in terms of India's status as a nuclear power as well as in the country?s energy security. However, the agreement by itself, which would certainly have to cross several hurdles before getting approved by the US Congress, is only a beginning. If India wants to expand its power generating capacity with greater reliance on nuclear technology, then it would have to carry out urgent reforms in the power sector. For much too long now this sector has been dominated by government decision-making and government funding. If efficiency improvements and professionalism are to define the performance of this sector, then a much greater extent of business orientation would have to be brought in, particularly through private sector involvement in power distribution. Unless revenues from sale of power are generated at an adequate level and collected by the power utility, there would be no assurance of payment for power generation, whether it is nuclear or coal based. One reason why the prospects of expansion of nuclear power generation have become stronger and attractive under the new agreement is the growing scarcity of fuels in the Indian economy. Oil imports are increasing to a precarious level of dependence, but at the same time constraints in mining and transportation of coal are also becoming a reality. Nuclear, therefore, can provide an opportunity for the Indian economy to grow at a healthy rate, fuelled by this form of power generation on an increasing scale. For this, however, the government has to move forward urgently with reforms in the power supply industry.