Since electricity is a sector that provides maximum linkages to other sectors of the economy it is sound developmental policy to expand this sector in India. The expansion of the private sector in generation will create the much needed resources, and this analysis has proven that this is economically viable. The privatization of the electric power sector in India will be the first step the country would take toward becoming a developed nation.

India is a developing nation that requires electricity for all of its development needs. It is a case, however, of demand exceeding supply. The Indian government realizing this has decided to look to private sources, both domestic and foreign, to invest in the power sector in order to augment the current generation of electricity.