Electricity generation has been increasing steadily. In this fiscal year, power generation has increased by 9.3% over a year ago, outpacing the 5.8% seen the last financial year.
While merchant power has been trading in a tight range of Rs2-4 a unit, in the last two weeks it has been inching up which indicates robust consumption despite the shaky finances of State Electricity Boards. Where is all this power going? Perhaps, one could tie this up with the small rebound in industrial production data, particularly capital goods production, seen in June. Or to put it another way, it is yet another indication that economic growth is not slowing down as much as the RBI wants it to.