Overview of Financial Efficiency in India’s Power Sector

Abstract

Power is an important tool for economic growth of the country. Power is vital for every form of human activity-domestic, agricultural and industrial infrastructure, such as telecommunication and transport. The demand for electricity in India is enormous and is growing steadily. This growth has been slower than a country’s economic growth. The big challenge of the power industry is to balance the demand and supply of electricity. Financial management involves planning, organizing, directing, and controlling the financial activities of an organization. Its primary goal is to maximize shareholder wealth and ensure the efficient use of resources. Financial efficiency refers to how effectively an organization utilizes its resources to generate revenue or profits. It involves minimizing costs and maximizing output or outcomes relative to inputs. The financial efficiency of India's power sector is a critical aspect of its energy infrastructure, impacting both economic growth and sustainability. The main needs of the study are the source and use of funds of the company and how to evaluate the financial performance of the company. The objective of this study is to critically evaluate and assess the financial performance of Southern Power Distribution Company of Andhra Pradesh State Limited, Tirupati.