Abstract
This paper examines the development of the Indian power plant sector in relation to the aims of promoting economic growth, import substitution, and international competitiveness. Particular attention is paid to Bharat Heavy Electricals Ltd (BHEL), a public enterprise which was established with extensive foreign assistance. Major difficulties were encountered in assimilating foreign technology, coping with rapid technical change, building up expertise in quality assurance, and research and development, obtaining satisfactory materials and components from Indian firms, and achieving satisfactory capacity utilization. Nevertheless, in production capacity and size of market, BHEL is increasingly comparable to the 10 or so suppliers that dominate the international market as well as their home markets. The main challenge is to achieve higher productivity of the capital employed in this sector by strengthening indigenous technological capabilities in all aspects of power engineering, including in the manufacture of power equipment, and the construction, operation, maintenance and repair of power stations.
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