Energy outlook.
As Prime Minister Narendra Modi's administration approaches the 2019 general elections, its key election promises are receiving increased scrutiny. On energy, the scale of ambition has increased, with targets stretching beyond 2019. The government hopes to leverage early successes to seek a second term in office to implement its agenda.
Subsidies will rise when the oil price rises, although leakages will be lower.
In the post-Paris summit era, the window available to India to utilise coal for growth has narrowed to 2020.
The recent rise in gas consumption will continue as long as LNG prices are low and domestic coal targets are unmet.
The insolvency of distribution utilities will impede their ability to fulfil their renewable purchase obligations.
The problem also affects public sector banks, which hold a large proportion of the utilities' debt.
