And Miles To Go Before ...

India would love to be ranked No.2 globally - be it economic power or steel production or some other criterion. We are already euphoric about emerging as the second strongest economy by the year 2050. This is not daydreaming. The world famous financial analyst Golden Sachs made this forecast after thorough research. But doubts linger in the minds. Already the GDP growth rate for the year 2007-08 has been scaled down to 8.5%. Then, are we going to attain double digit growth rates or the economy will start cooling even before getting heated?
I read in Economic Times that India is set to emerge as the world's second largest steel producer by the year 2016 when the production capacity will rise to 120 million tonnes. The steel secretary is reported to have given this one-liner assurance -"Given a conducive mineral policy framework, this country should be producing 120 million tonnes by 2015-16 and 180 million tonnes by 2019-20". Doubting Thomas es would say it took 16 years after the liberalisation of the steel industry to double the capacity; will it then be possible to treble capacity just within 9 years notwithstanding the acquisition spree of foreign steel companies by domestic producers. The National Steel Policy took years to see the light of the day. The mineral policy framework will emerge only after several ministries and Planning Commission arrive at a consensus. All this will take time. Then one does not know whether the policy will really be 'conducive' to the steel industry or not. Some of the mega projects for which MOUs were signed with lot of fanfare have not made much progress. Posco project in Orissa is still dragging its feet over land acquisition and independent port facilities at Paradip. The JSW project in West Bengal is facing resistance over land acquisition.
The serious delay in execution of power projects (which are the most important ones for building the infrastructure) and the recent alarming news of severe power cuts in the industrial hub Mumbai affecting production show the failure of the government to implement projects in time. During the Tenth Plan, power sector could achieve just 56% of capacity addition against target. The Working Group on power has already warned of serious fund shortage to the tune of Rs450, 000 crores ($100 billion) during 2007-12 which is nearly 45% of the total funds needed for power projects during the period.
With such pathetic performance of the government in the past, the optimism aired by officials should be taken with a pinch of salt. We should not get too excited about such scenarios as we have learnt from past experiences that there's many a slip 'twixt the cup and the lip. Some may consider me as a pessimist for expressing such doubts. I would be happy if I am proved wrong.

No Time For Governance

“Procrastination: Hard work often pays off after time, but laziness always pays off now” - Larry Kersten (American Sociologist and Author).
I found the above quote very amusing and relevant. Those in the government - ministers and bureaucrats seem to have been immensely inspired by it. Or else how can one gloss over the colossal loss of over Rs25,545 crores ($58 billion) incurred in 476 centrally-funded projects. It just sums up to 8% of cost overun. The irony is that the most serious delays occurred in power, petroleum and railway projects which constitute the backbone of India's infrastructure. The government, without any let or hindrance, would be happy to fantasize about becoming the second largest economy in the world when development of basic infrastructure vital for such dreams to materialise remains neglected.
Who is to blame for such poor performance? Nobody. In the recent history of the government, there is hardly any instance when any head of a minister or bureaucrat has rolled for such failures. Introspection seems to be the right medicine to cure such maladies. The other day, the Prime Minister, while talking on the slippages in power projects, suggested introspection for the officials. For the crucial power sector, the achievement against the target was a meagre 56% for the Tenth Plan. Interestingly, such shortfalls did not happen overnight but was spread over 5 long years and despite a separate ministry of Programme Implementation supposedly monitoring central projects round the year.
BCCI President Sharad Pawar, who is also the Agriculture Minister, also advised introspection after the debacle of Team India in World Cup 2007. Where else his heart should be as BCCI is the richest cricket organisation in the world? It is unfortunate that he cannot devote so much time for the hapless farmers who are committing suicides by dozens.
Similarly, inflation is forcing millions of self-employed, daily wage-earners and senior citizens(who are not getting pension from the government) to tighten their belts to make both ends meet. The ministers and the government officials who should have been alarmed at their own failures are protected automatically with their pay and perquisites linked to consumer price index. And even before any pressure has built up for setting up of the Sixth Pay Commission, the Prime Minister himself took the initiative to announce it to win the hearts of the pampered and organised group of government employees who constitute merely 4% of the total labour force.
My advice to the remaining 96% of the labour force is that they should be patient and introspective.

India's Power Scenario Brightens Up

Power is one of the most critical components of infrastructure required for economic growth and better standard of living. Historically, the growth in the power sector has been always sluggish compared to the economic growth in India where as it should have been the other way. Now that India's GDP is growing at the rate of 8-10% and is projected to grow at 10% during the XIth Plan period (2007-2012), the desirable growth rate for the power sector ought to be at least 12%.
Despite such an apparent deficiency in its infrastructure, the famous financial analyst Golden Sachs stunned the world with their recent conclusion that India's economy would emerge as the second largest in the world - next only to China by 2050 and it would surpass Japan by 2032. It would be safe to presume that such conclusions were made definitely after taking into consideration the strategies and blueprint prepared by the Government and planners which aim to add a whopping 1,00,000 MW additional generation capacity by 2012 to bridge the gap between demand and supply of power.
It involves the capacity addition target of 45,500 MW for central Public Sector Undertakings under the Ministry of Power, 41,800 MW for State Electricity Boards/State Utilities and private sectors. Nuclear and non-conventional energy have been given more importance to augment power. A target of 6,400 MW of nuclear power and 10,700 MW of non-conventional power has been fixed for the period upto 2012.
With such massive capacity addition, the per-capita consumption of electricity would reach 1000 KWH/year from the level of 606 KWH/year (2004 - 2005). This is still much below per-capita consumption of 10,000 KWH/year in some developed countries. The latest provisional figures show a peak demand of 100,423 MW where as the demand being 86,425 - a deficit of 13.9% (April 2006-January 2007). Taking into account the gigantic task as well as the huge potential in growth of power sector, the Government of India has set its goal - Mission 2012: Power for All. In line of its commitment, the annual budget for 2007-08 (which essentially is a statement of accounts) has increased the budgetary support for power reforms and development from Rs650 crores ($148 million) in 2006-07 to Rs800 crores ($180 million). It has also given emphasis on Ultra Mega Power Projects (UMPP). These projects involve huge investment in the region of Rs20,000 crores ($4.5 billion) or more with capacities of 4000 MW. Two units at Sasan and Mundra have been cleared and two more are expected to be cleared out of seven UMPPs by July,2007. For accelerated growth in the power sector, such projects hold out great promise.
So, there I see light at the end of the tunnel. Do you?