Archive for May, 2010

Energy Crisis or Intellectual Bankruptcy?

An energy crisis is any great shortfall (or price rise) in the supply of energy resources to an economy. Energy crisis usually refers to the scarcity of electricity, oil, gas and other natural resources.

Energy crisis usually have wide range impact on the economy, it can definitely lead to stagnant economy having higher inflation due to rise in cost of production. As we have witnessed our GDP dropped to 2%. Ironically we are still aiming at 2.5-3.5% GDP with no and expensive electricity, gas (rapidly depleting) and with soaring prices of oil prices.

We all know we are in the middle of this energy crisis. What caused this crisis. Let’s explore. During the past decade growth rate of our economy was soaring to the unprecedented heights i.e. 7-8% per year. The economy was progressing at very rapid rate. This rapid industrial and economic growth led to the unprecedented consumption of the resources including gas, oil and electricity. The rapid increase in consumption caused the profound demand and supply gap.

What they planning and policy makers forget to pay heed to is the bridging the gap between supply and demand. There were both political and non political (developmental) reasons for this gap. These political reasons including, provision of electricity to 300 villages during the last decade. Local political leaders were aware of there constituency’s demand and they fulfilled it and rightly so but on the other hand this rapid supply of the electricity wasn’t backed by proper planning to increase in the production of electricity.

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