According to estimates made by the Planning Commission, state electricity distribution companies (SEDC) are facing huge transmission & distribution (T&D) losses, which is hampering the growth of the sector.
For the current financial year, T&D losses are estimated to be close to Rs68,000 crore, a 51% increase over last year's figure of Rs45,000 crore.
The government has also been asking the SEDCs to be transparent in preparing their accounts.
The Planning Commission mooted the idea of setting up an expert committee that would advise the government on preparing stricter accounting norms for the SEDC.
Meantime, the government is likely to miss another 3000 mw of planned capacity addition in the Twelfth Plan due to delay in some hydro power projects.
"Efforts are on to achieve 62,000 mw, but 3 to 4 hydro projects have been affected due to issues like natural geographical disturbances. So around 3,000-4,000 mw capacity addition would spill over to next plan," Uma Shankar said.
At the beginning of the Eleventh Plan, the government had envisaged capacity addition of 78,700 mw.
However, due to delay in some of the thermal power projects the government had reduced its target to 62,000 mw. However, with the latest announcement, the capacity addition in the Eleventh Plan is likely to be around 58,000 mw.