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The Group Captive System: The idea!

Well, given the situation at that time, late 1980s, when there was a huge power shortage in the marketplace and no money with the government to put up new power plants, uncontrollable corruption making public enterprises a failure, drastic measures were needed to push generation of electricity up.

 

And these measures were taken up in late 1980s and early 1990s. This scheme of putting up captive power plants was offered, even at the turn of the new millennium.

 

Capital shortage continued to plague the growth of Indian Industry since independence. Stock markets gave a new opportunity to industrialists and like the grand old man of Reliance, a few made use of the stock markets to raise large capital and ran companies that treated shareholders like what they really are, owners! Naturally, they were very successful.

 

Either the stock exchanges or just a brainstorm somewhere during a discussion, we do not know which or when, but the idea of group captive was born sometime in the late 1990s.

 

The idea was simple.

 

If one entity could promote a power plant to meet its power needs, then it becomes captive. Now, if ten people join together and promote a power plant to meet its power needs, then what does it become? And power plant operation and maintenance are also a niche job; professional and skilled personnel are required to man it. To expect a company that specializes in food industry to set up a power plant and run it efficiently is not right.

 

Therefore, these people also said, a specialist in power plants could start a power company and run it. He can have multiple consumers to join up with his new entity and make use of the power produced.

 

 

(To be continued next week…)


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