India struggles with massive power outages as poor infrastructure rears head again
An energy crisis recently hit India, and the power outage forced millions to be without power, which could complicate business processes for multinational corporations with active corporate relocation programs in the country.
The power failure, which affected more than 680 million people, is considered to be one of the largest blackouts in history. These outages have come in a string, as there was a smaller incident on Sunday, which increased to a wide-enough scale to affect more than 620 million people on Monday and grew to its current level. The reason for the outage is likely due to an overuse of power from the government grid, which controls energy across the nation.
"Everyone overdraws from the grid. Just this morning I held a meeting with power officials from the states and I gave directions that states that overdraw should be punished," said Sushil Kumar Shinde, India's Power Minister. "We have given instructions that their power supply could be cut."
The continued struggles regarding infrastructure in the country have stunted its gross domestic product growth, and the issue has expanded from power issues to poor roads and shipping ports, and this makes a sufficient fix of the power system even more necessary, as India is one of the most in-demand relocation markets.
The Indian government is in the process of improving its energy capacity in order to meet up with the quickly-growing demand in the country. Within the next five years, the government's plan is to grow electricity capacity by more than 40 percent, but progress has slowed in recent months. Last month, the government planned to meet the peak hour demand of nearly 130 gigawatts, but the actual figure was close to 6 percent off that pace.
Despite the outage, officials have worked to restore power, and most regions that lost electricity have at least 40 percent supply restored. However, it has still had a significant effect on hospitals, office buildings and the mining industry.
India is growing into a strong center for commerce and investment, and many companies have already established divisions there. However, with its development, it has experienced significant infrastructure issues that could pose obstacles for corporate relocation plans. Keeping in mind that services, power and work can be interrupted, companies should ensure they have contingency plans in case overseas workers are unavailable via traditional means.