Small Cars Boom Spell Urban Doom

India is basking in the sunshine for the robust growth of economy and the inevitable consumerism it has spurred by way of higher spending and improved lifestyles for Indians. Car - the ubiquitous status symbol delineating the rich from the poor is expectedly much in demand. The nation's image as the one afflicted with widespread poverty has taken a backseat after 1.3 million automobiles have been manufactured during the year 2006. In my previous posts 'Small Is Beautiful' followed by 'Small Cars Make Big News', I had hinted at small cars becoming cynosure of automobile manufacturers.
The year 2007 may see the launch of over 40 new models - many in the small car segment. The scenario is becoming all the more exciting with the international giants Honda, Toyota, GM and Fiat eyeing small car markets and planning huge investments in India. Their combined committed investment in the Indian automotive sector is reported to be a staggering Rs60,000 crores (exceeding $13 billion) over next 4 years. If this is not enough to celebrate, then the forecast made by Golden Sachs that India will have the largest population of automobiles by the year 2050 calls for uncorking Champagne definitely.
Just wait! We should also take into account what is lurking in the darkness. The Indian cities and towns are, as it is, notorious for endemic traffic jams caused by narrow roads with fast moving automobiles vying with slow moving handcarts and three-wheelers besides bicycles for right of way. The air and sound pollution far exceeds the prescribed safe limits. The road accidents in India are also the highest. So if more and more small cars are made, their highly competitive market may benefit the consumers who will also have the luxury to choose from a wide range of models at affordable prices. But it will spell doom for the millions living in the cities. The car density, likewise, will increase several folds from the measly four cars per 1000 people. The boom in the automotive sector will also generate jobs for a few thousand people. However, the flip side is too catastrophic to celebrate India's boom for small cars. Let the government ensure that environmental damage will not take place and more cars are not going to bring more problems in the lives of people.
Then I would also like take part in the celebrations. How about you?

Bio-fuels Fuel Imagination Of The Entrepreneurs Of Tomorrow

When I started blogging about 4 months back, I initially started writing on topics such as human behaviour, nature and the role destiny plays in life. As I entered the blogosphere and got a little familiar with the alien environment, my mind yearned to focus on news relating to India’s rapid progress in the economic field and industry. Topics in which I have lasting interest include the new technologies for cleaner environment reducing carbon emission. In addition, topics of growing importance like steel, infrastructure development, FDI flows and even floriculture have captivated my attention.
The report on the result of the first Economic Times’ Wharton Business Plan competition published in Economic Times had especially an encouraging effect on me. The report has mentioned how difficult it was to choose the best entries from 600 budding entrepreneurs for business ideas. Some of the winning entries show the maturity of the young minds who are going to be custodian of the country in the future. It is reassuring for me to note that I am not much out of steps with the modern thinking of the young minds.
The winning team made the following comments on their bio-diesel business plan – “In the age when ethanol is grabbing attention, bio-diesel is slowly picking up pace in foreign markets such as the US, along with India. Although bio-diesel production is at a very nascent stage in the country, the sheer potential of the area compelled us to look into such a business opportunity.” I had commented as follows in my earlier post titled “India’s short menu of alternative fuels”.
“The most promising alternative fuel is bio-diesel using jatropha, karanj and similar species. The hybrid fuels and flexi-fuels can be run with varying amount of blended ethanol. Locally, the plant cultivation can be promoted provided incentives are made attractive. The auto industry, the government and the political class as a whole have to put their heads together to make this happen.”
Hopefully the budding entrepreneurs will translate their plans into reality when they will be at the helm of affairs.

Chasing Carbon Credits - The New Passion Of India Inc.

For long, the industries have been grappling with the menace of air pollution caused by carbon dioxide emissions and the public outcry against the resulting global warming. The reward and punishment system to control the situation by introduction of trading in 'carbon credits' seems to be catching up. In the earlier post titled - 'India's Creditable Feat Of Earning Carbon Credits', I had touched upon its growing acceptance in corporate world and India's initial success in earning carbon credits. India is already the third largest to amass carbon credits reportedly equivalent to $1 billion - next only to China and Brazil.
The concept of modifying industry processes and waste control efficiently while earning carbon credits to be reflected in the company balance sheet has become the latest passion of Indian companies. Not surprisingly, one of the navratna public sector undertakings ONGC, according to a report in Economic Times, is about to launch 14 projects for carbon emission reduction and earn carbon credits as well. SAIL is also drawing up such novel projects. I think, the PSUs are best equipped to take the lead as these measures, on the face of it, do not appear to give any handsome return in the short run. Again, these companies have the financial strengths on the one hand, and suffer from the bureaucratic red tape as well as orthodoxy regarding investments on the other. If they can get over these hiccups, I think the companies will be killing two birds in one shot.
Changing times demand changing names. I remember, PSUs at the height of controlled economy had a nondescript post of a Public Relations Officer (PRO) whose main job was to issue passes for the visitors. Now ONGC has a senior position with an exotic designation in the corporate world - 'GM, alternate energy & carbon credits'. This alone speaks about the importance the company is attaching to carbon emission reduction (CER). I wish other PSUs follow suit and create departments for alternative energy & carbon credits or something similar with the sole responsibility of earning carbon credits.

Renewable Energy Holds Out Hope - Part Two

The worldwide wind turbine capacity has climbed to a whopping 60,000 megawatts during 2005. The industry has developed large and efficient turbines of 4 to 6 MW. The average cost of generation is working to as low as Rs2-3.25 (four cents to seven cents) per kilowatt-hour. The social benefit of pollution control by this source of energy is a bonus for the already competitive cost of power. India has vast stretches of land where optimum wind speed almost throughout the year is available for free. Instead of subsidising coal-based power, the subsidy can be given perhaps more liberally for wind power as that would kill two birds in one shot.
The other renewable energy which could be commercialised on a much higher scale is solar energy. Using solar cells or photovoltaics, global generation was merely 5000 MW during 2005. However, with the breakthrough in technologies of making cheaper photovoltaics, the cost of generation has come down to Rs9-11 per kwh - almost four times the cost of coal-based electricity. With an investment of just $100 (Rs4600), people in Kenya prefer solar power to conventional power. In India, the low cost photovoltaics should be mass-produced so as to reach rural areas and inaccessible terrains easily.Innovative ideas invariably get rejected by traditional thinking.
The bureaucrats, the whole political class and power consultants will have to change their mindset.Are they ready?