Power, telecom, aviation sectors in various states of crisis

India's power, telecoms and aviation sectors, core to sustaining the country's growth, are in various states of crisis. That may prove a good thing, if it forces government to act.
Regulations in all three industries have kept prices low and brought power, cellphone service and even air travel to millions of Indians for the first time. The same policies have left many operators battered by losses, debt, and plunging share prices.
Power, telecoms and airlines are capital-intensive sectors that attracted heavy investment when the regulatory environment was more favourable and global capital was plentiful and cheap.
That has left India crowded with more than a dozen cellular carriers, loss-making airlines with too many planes and billions of dollars of investments in a power sector made uneconomic by high global prices of coal and low domestic tariffs.
Many investors once keen on India's long-term growth have had enough as global and domestic economic conditions worsen, making Indian stocks among the world's worst performers of 2011.
Despite passenger growth of nearly 20 percent, shares in India's three listed airlines are down between 62 and 72 percent in 2011. The index of power stocks is down 32 percent even as electricity demand far outstrips supply.
07/12/11 Reuters/Economic Times

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Categories: Indian Aviation- In General Dec 2011