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Energy pricing crucial to supporting inclusive growth: Montek

January 24: India's policy towards energy pricing will be critical for the energy sector to be able to support inclusive growth, according to Deputy Chairman of Planning Commission Dr Montek Singh Ahluwalia.

"We must contain import dependence in this sector if only because of the compulsions of energy security. This requires containment of demand within a framework of continuing growth which means encouragement of energy efficiency. This in turn requires rational energy prices," Ahluwalia said in an exclusive interview to Coal Insights, a sister publication of ICMW. 

"If energy prices are kept too low we cannot expect demand to be contained," he said, adding, "There is room for subsidising the poor for some minimum requirements but not large sections of the general population."

According to him it is equally important that India increases its domestic production of energy, especially clean energy.

"Both involve costs, which have to be reflected in energy prices or else we cannot expect to attract investments," the deputy chairman said.

"This is actually quite simple but I feel there isn't an adequate appreciation of the fact that our energy prices are out of line with what they need to be. Upward adjustment of energy prices is not easy and may be politically very difficult. But the alternative is we will not have the energy we need for growth," he said.