Deendayal Upadhyaya Gram Jyoti Yojana

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the launch of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) with components (i) to separate agriculture and non agriculture feeders facilitating judicious rostering of supply to agricultural and non-agricultural consumers in rural areas and (ii) strengthening and augmentation of sub transmission and distribution infrastructure in rural areas, including metering of distribution transformers/feeders/consumers. The estimated cost of the scheme for above two components is Rs.43,033 crore which includes the requirement of budgetary support of Rs.33,453 crore from Government of India over the entire implementation period. The Cabinet further approved, that the balance work relating to rural electrification as per CCEA’s approval in August, 2013 with the norms of the ongoing scheme of RGGVY in 12th and 13th Plans will get subsumed in DDUGJY as a distinct component for rural electrification, for which CCEA has already approved the scheme cost of Rs.39,275 crore including budgetary support of Rs.35,447 crore. This outlay will be carried forward to the new scheme of DDUGJY in addition to the outlay of Rs.43,033 crore. The scheme would help in: (i) Improvement in hours of power supply in rural areas, (ii) Reduction in peak load, (iii) Improvement in billed energy based on metered consumption and (iv) Providing access to electricity to rural households. The process of sanction of projects shall commence immediately. After sanction of projects, contracts for execution of projects will be awarded by States Discoms / Power Departments. The projects shall be completed within 24 months from date of award.

Missing links in universal health care

Over 95 per cent of patients coming to super-speciality hospitals are at the wrong place and have incurred hardships when they could have been treated at their neighbourhood primary care centre.

A number of announcements have been made by the Central and State governments on their intent to offer Universal Health Care (UHC). These welcome developments are timely as India is now rapidly becoming one of the few countries that do not seem to have a concrete plan for UHC in place. Even poorer countries such as Ghana, Kyrgyzstan, Rwanda, and Vietnam have now started to make significant progress in this area.

A fact often overlooked in these discussions, however, is that UHC is a complex idea and contains several prerequisites that need to be carefully incorporated into its conceptualisation, design and implementation. This article attempts to outline four of these essential elements.

Providing integrated care

The first, and perhaps the most important, element is the need to distinguish UHC from universally available health insurance. UHC seeks to ensure financial protection with the provision of appropriately priced, high quality, and integrated health care (combining primary, secondary, and tertiary care into a single, patient-centred health-care system). Ideally, financial protection and comprehensive health care are bundled together into an integrated ‘managed care’ proposition where the financial-protector (or the risk-manager) and the provider are a single entity. One of the key benefits of this model is the significant shift in incentives for the health provider — from the current focus on promoting hospitalisation and needless care-procedures, to incentives for promoting health and prevention of illness. Since the provider receives only a fixed amount per year, irrespective of the actual treatment provided, ‘managed care’ places rational treatment and cost-effectiveness at the centre of the model. Because of their very nature, health-care systems owned and financed by ministries of health are ideally suited for offering this type of ‘managed care’. And, if, but only if, there is very strong confidence in the ability of the system to regulate and monitor both patient and provider behaviours as well as population level outcomes, it is possible — as Thailand has done successfully — to invite large non-government players to also bid to provide such ‘managed care’ services. And, while the regulatory challenge in outsourcing ‘managed care’ to the private sector is quite considerable, it is very clear that fragmented health systems with different providers taking care of different parts of the health system, such as the private sector providing hospital-based care and the government focussing on primary care, with patients free to bypass it, is the worst of all possible choices. This fragmentation is the principal reason why a country like the United States finds itself in a situation where insurance premiums and costs of health care are both rising rapidly but population level health indicators are well below those of other comparable countries.

Primary care with gatekeeping

The second element is the need to shift the focus of attention from hospital-based care, to primary care — in terms of financing, development of infrastructure and usage. In order for India to achieve UHC, both in terms of financial feasibility as well as its well-being goals, it is clear that fewer than 2.50 per cent of patients in any given year should need hospital-based care. This implies that 97.5 per cent of all conditions would need to be dealt with at the primary-care level. UHC would therefore need substantial investments at the primary level combined with a strong gatekeeping framework that does not allow patients to seek hospital-based care unless they have been referred by a primary-care provider. It is believed that over 95 per cent of patients who visit tertiary care facilities such as JIPMER in Puducherry and AIIMS in Delhi are at the wrong place and have incurred all the hardship and costs that they did needlessly when they could easily have been cared for locally if good primary care was available. Evidence from Andhra Pradesh also shows that under ‘Arogyasri’, people are overwhelmingly seeking care at hospitals even for conditions which are patently treatable at primary-care facilities. While India undoubtedly needs additional hospital beds to provide adequate coverage even at the 2.50 per cent level mentioned earlier, it is imperative that the focus of immediate attention should not be hospitals or more AIIMS-like centres but well-designed and capable primary-care facilities so that patients can go there directly. Should they inadvertently end up at hospitals for seeking such care, they must be directed back. Only this combination of improved-availability and mandatory-gatekeeping will start to reduce the excess demand for hospital beds even as we gradually seek to address the unmet needs for hospital beds in deficient regions. Otherwise, we run the serious risk of this turning into a vicious cycle of ever increasing demand for hospital beds, further fuelled by an in-patient, insurance-led financial protection strategy, leading eventually to continual and rapid increases in health insurance premiums with no resultant improvements in health outcomes.

Covering everybody

The third key element relates to coverage — any universal health programme would need to include the entire population and not just be targeted at the poor. This is because India has a very steep poverty gradient and single health shocks have the potential to draw entire households back into poverty for all but the very top sliver of the population. For this very reason, globally, citizens of the most developed and several developing nations, who have significantly higher per capita incomes than do even the top percentiles of our population, have also been provided with full access to health care and financial protection. Engagement of the middle class also allows additional resources to be pooled along with tax resources since the amounts that they are currently expending on health care could be included as well. It is clear that development of integrated risk pools and their investment into an integrated UHC framework of the type discussed earlier (as would be implied by grouping the rich and poor together) would allow a significantly higher level of expenditure-volatility compression and the delivery of rational care. This would benefit both segments, with only the resultant net savings to the middle class being used to cross-subsidise the poor. Another benefit of including the middle class is in ensuring accountability of the health system. Being more conscious of its rights and with more resources to participate in the political process, the middle class is better placed to hold the public system accountable to higher quality of care, and perhaps, place health care centrally on political agendas — a feat that the Below Poverty Line (BPL)-targeted Indian health system has not been able to accomplish.

Separating out social determinants

The fourth key element is the urgent need for separation of core health care from extended health care, in a focussed discussion on UHC. While broader social determinants of health (or extended health care) such as provision of clean drinking water, improved sanitation and improved education of girls, have the potential to produce a very big impact on health outcomes, UHC is much more narrowly focussed on what the health-care system itself can provide directly in terms of primary, secondary, and tertiary care (or core health care). The reasons for the desirability of this separation are many and have to do principally with the appropriate allocation of responsibilities and resources. First, these broader determinants, for the most part, fall outside the domain of the ministries of health. Second, in India, the resources currently allocated for health care by the government have to go up three times, from 1 per cent to 3 per cent of GDP even to provide the essential elements of core health care at a reasonable level of quality and availability. Provision of extended health care would need a much larger level of resource allocation and would perforce have to be included in the domain of other ministries. And, finally, the benefits that accrue from extended health care go well beyond health (for example, time savings account for over 70 per cent of the benefits of home-delivered, clean drinking water and are not necessarily the most cost-effective interventions if viewed only from the narrow lens of health care.

There are a number of very important challenges that we face as a country. It is important to ensure that we are focussed on solving those using strong evidence-based strategies and with a very sharp sense of focus. Offering UHC to all our citizens is one such challenge. Here we need to be careful that we use the limited resources we have at our disposal in the most effective way, even if it means that some very important ideas need to be revisited or deferred for the time being.

Alexander Grothendieck: a visionary who did pioneering work in algebraic geometry

Alexander Grothendieck, one of the greatest mathematical minds of the twentieth century, died on November 13

Alexander Grothendieck, one of the greatest mathematical minds of the twentieth century, died last Thursday (November 13).

A recipient of the most prestigious honour in mathematics, the Fields medal, in 1966, he was a visionary who set up several ideas in algebraic geometry for mathematicians who followed.

Though his early work was on Functional analysis, he became interested in algebraic geometry in the mid-1950s, as did many brilliant minds of that period. “He brought in a completely new universal perspective, a new language and thought, using which he solved existing concrete problems and set up a whole superstructure indispensible for generations to come,” says Prof. V. Balaji, algebraic geometer from Chennai Mathematical Institute.

The Grothendieck-Riemann-Roch theorem was one striking result to emerge in this time. His work laid the foundation for many important results, including the solution of the Weil conjectures and Fermat’s last theorem and applications in diverse fields as robotics and cryptography.

Born in 1928, in Germany, Grothendieck witnessed rebellion early. When he was five, his parents left him with a family in Hamburg and moved to France. In 1942, he attended school, at Collège Cévénol, and then went on to study in Paris. He took up a position at Institut des Hautes Etudes Scientifique, near Paris, where he did phenomenal work.

In his own words, taken from his autobiographical work Récoltes et Semailles: “In our acquisition of knowledge of the Universe (whether mathematical or otherwise) that which renovates the quest is nothing more nor less than complete innocence ... Although so often the object of our contempt and of our private fears, it is always in us. It alone can unite humility with boldness so as to allow us to penetrate to the heart of things, or allow things to enter us and take possession of us. This unique power is in no way a privilege given to ‘exceptional talents’ — persons of incredible brain power (for example)... Yet it is not these gifts, nor the most determined ambition combined with irresistible will power that enables one to surmount the ‘invisible yet formidable boundaries’ that encircle our universe. Only innocence can surmount them...”

CO2 emissions must be nil by 2070 to prevent disaster: U.N.

The world must cut CO2 emissions to zero by 2070 at the latest to keep global warming below dangerous levels and prevent a global catastrophe, the U.N. warns.

By 2100, all greenhouse gas emissions — including methane, nitrous oxide and ozone, as well as CO2 — must fall to zero, the United Nationals Environment Programme (UNEP) report says , or the world will face what Intergovernmental Panel on Climate Change (IPCC) scientists have described as “severe, widespread and irreversible” effects from climate change.

Finite carbon budget

The UNEP report published on Wednesday is based on the idea that the planet has a finite ‘carbon budget’. Since emissions surged in the late 19th century, some 1,900 Gigatonnes (Gt) of CO2 and 1,000 Gt of other greenhouse gases have already been emitted, leaving less than 1,000 Gt of CO2 left to emit before locking the planet in to dangerous temperature rises of more than 2C above pre-industrial levels.

Jacqueline McGlade, UNEP’s chief scientist, told The Guardian that scientific uncertainties about the remaining carbon budget had diminished and the real uncertainty now was whether politicians had the will to act.

“The big uncertainty is whether you can put enough policies in place from 2020-2030 — in the critical window — to allow the least-cost pathways [to lower emissions and temperatures] to still stand a chance of being followed,” she said. “The uncertainties have shifted from the science to the politics.”

All scenarios in the UNEP report now require some degree of ‘negative CO2 emissions’ in the second half of the century, through technologies such as carbon capture and storage or, possibly, controversial, planetary wide engineering of the climate known as geo-engineering. UNEP is “extremely interested” in the subject and is planning a report in the months ahead.

Consideration should also be given to compensatory schemes for investors in fossil fuels companies to address the ‘stranded assets’ issue, Ms. McGlade added.

She acknowledged “donor fatigue” ahead of a pledging conference for the Green Climate Fund on Thursday — which has so far racked up close to $10bn (£6.4bn) — and called for up to 20 per cent of the final money pot to come from citizen bonds for local environment projects, with the remaining 80 per cent split between public and private sources.

Maroš Šefèoviè, the European Commission’s vice-president for energy union told a Brussels press conference that the report would be of use in preparing bloc positions for next month’s Lima climate summit.

The EU has not, however, supported UNEP’s call for zero greenhouse gas emissions by 2100 .

Climate neutrality

Christiana Figueres, the United Nations Framework Convention on Climate Change (UNFCCC)’s executive secretary, said: “This important report underscores the reality that at some point in the second half of the century, we need to have achieved climate neutrality — or as some term it zero net or net zero — in terms of overall global emissions.” A key theme in the emissions gap study is the cost-effectiveness of taking early action and the dangers of not doing so

Peace at the WTO

India must now move ahead to reduce food stocks

The deal between India and the United States that appears to have paved the way for reviving the World Trade Organization (WTO)’s Doha Round of negotiations is welcome. As this newspaper reports on Thursday, the WTO secretariat is preparing to hold a special general council on November 26 to discuss the stalled issues of a trade-facilitation agreement and norms for food stock holding by member countries. Prime Minister Narendra Modi and his government should be commended for eventually taking the long view and recognising that a permanent solution to complaints over the accounting of India’s subsidies to agricultural producers can wait; the agreement on trade facilitation must be signed first. The process of resolving the contentious issue of WTO-compliant farm subsidies can also begin as New Delhi has received an assurance that the United States won’t challenge its food procurement and stock holding policies at the WTO forums. However, it does not automatically deter other countries from doing so unless consensus-based new subsidy norms are incorporated in the WTO’s Agreement on Agriculture (AoA). But given the United States’ clout in the world organisation, it may now be easier to sort out this matter to the satisfaction of India, which currently runs the risk of breaching the current upper limit of such subsidies fixed at 10 per cent of the value of production.

India still faces charges levelled by several countries, including Canada, Australia, Japan and the European Union, of understating its food and agricultural subsidies. Such accusations and disputes can end only when the norms stipulated in the AoA for calculating these subsidies are rationalised and the ceiling on such expenses are revisited. The catch is that the subsidies are calculated on the basis of domestic 1986-88 prices, which were just a fraction of what they are today. India wants either that decades-old benchmark to be revised, or for the currently applicable ceiling on the total cost of subsidies and stockpiling – 10 per cent of the total production – to be permanently relaxed. Of course, the fact that India’s 1986-88 prices for wheat and rice are much lower than prices today is not unrelated to the continual increase in minimum support prices, or MSPs — precisely the behaviour that is arguably in violation of the WTO norms. Other countries are concerned that these subsidies incentivise the over-production of agricultural produce that could then be dumped on the world market and distort global prices.

A permanent solution to this dispute on stock piling and subsidies will continue to be worked towards. In the meantime, an assurance is to be obtained at the forthcoming special general council meeting of the WTO that countries will refrain indefinitely from challenging India’s violation of the 10 per cent limit. There is little doubt that the deal with the United States prior to the WTO meeting is a major breakthrough. However, the tasks before the Modi government are onerous and the opportunity even bigger. The government should use the excuse of a foreign treaty to work on rationalising and revamping its own food management regime to hive off needless costs. Some important steps have been taken in recent months to cut down food procurement and prune food inventories. But more flab must be shed to match food acquisition and stock  holding with genuine needs.

What has PM Modi achieved from his summits? Evaluating Narendra Modi's series of summit

Prime Minister Narendra Modi's long trip to a series of important multilateral meetings - with some bilateral summitsthrown in along the way - is drawing to a close. As with his previous trips, Mr Modi has certainly made an impression, including in the media; it seems he has been able to convey a palpable sense of possibility to India's foreign partners, a sense that was missing for the last few years of the previous government. However, as before, in terms of concrete deliverables it is not fully clear what has been achieved. Moving India's position forward in the multilateral arena is certainly something for the long haul, and real results are unlikely to manifest themselves in the short run. However, this was a major test for Mr Modi in terms of forging relationships with the men and women he will be working with during his time in office - the degree to which he has succeeded will only be learned in time. Of course, as always, he managed to conclusively show - this time in Australia - the power of the Indian diaspora. This will have correspondingly raised India's profile.

One major step forward is that Mr Modi has managed to, while expertly preserving Indian pride, rescue its position at the World Trade Organization by coming to an agreement with the United States. Another major deal that was in India's interest but that it had shied away from signing was the Organisation for Economic Co-operation and Development's financial information-sharing pact. Over 50 countries had signed it in Berlin at the last minute, but India ducked out of doing so; reportedly that impasse, too, has now been overcome, and the G20has also endorsed these financial reporting standards. Meanwhile, thanks to recent leaked information on hundreds of special sweetheart tax deals given to big companies by Luxembourg - now being investigated by several European countries and by the European Union - a specific clause on action against such deals was included in the G20 communique. These may not be the product of specific Indian action or pressure from Mr Modi, but clearly do reflect Indian interests. The G20 has long held a strong view on curbing the tax haven menace, which dovetails well with the domestic Indian political narrative around eliminating black money.

At the Association of Southeast Asian Nations (Asean)-India and the East Asia summits, Mr Modi will have done his best to reassure partners of a continuing Indian interest in the Pacific Rim and the South China Sea. Security concerns, as well as the need for enhancing logistical connections, will have predominated, in the shadow of ever-increasing Chinese power. However, two contemporaneous events will have shown how far ahead of India China is in integrating itself into the multilateral system, and using summits to its advantage. The first was its series of deals with the United States, on intellectual property rights but also - crucially - on climate change. The second was the announcement of a major free-trade deal, a decade in the making, between China and Australia. India is still struggling with ambivalence towards trade deals; the Chinese are marching ahead, and coming to deals even with long-standing strategic partners of India, such as Australia.

Time to step on the gas for effective power generation Reviving stranded gas-based power plants and substituting diesel usage is a clear near-term opportunity

One of the embarrassing and less-discussed aspects of India's power story is that there are over 90,000 megawatt (Mw) of captive generating stations above one Mw capacity. Many of them use diesel. The overall consumption of diesel in the country has almost doubled in the last 10 years from 47 billion litres in 2003-04 to 89 billion litres in 2013-14, showing a growth of seven per cent a year. A significant chunk of this growth is attributable to the use of diesel for power generation. Some of the major diesel-consuming sectors forpower generation are shown in table I.

Consumption of diesel for power generation constitutes about 11 per cent of the total diesel consumption in the country, leading to a spending of Rs 64,200 crore annually. This does not even include the diesel used for power generation for small-sized generators at residences, agricultural usage and commercial establishments, the data for which are not available. The "power-backup" market in India is growing at an annual rate of 10 to 15 per cent due to the rising demand-supply gap, forcing diesel to be used as the primary fuel for this purpose.

Let us turn our attention to gas - liquefied natural gas (LNG) - as an alternative to diesel-based power. There are around 30,000 Mw of gas-based power plants sputtering along or lying completely unutilised. And 19,000 Mw of plants are clearly known to be "stranded" for lack of gas. Not only are they a national waste of ready capital assets but have also contributed in large measure to the non-performing assets (NPAs) stock at banks and financial institutions, and comprehensively stressed out promoter balance sheets.

With much of the hullabaloo about gas-pricing behind us now, it is time to see how making gas available operationally can rev up these assets to provide the much-desired spike in power availability and, more importantly, provide a cleaner and more cost-effective alternative to burgeoning diesel usage.

The use of diesel for power generation is, from all angles, a drag on the economy and environment. The cost of power from a diesel generating (DG) set for non-industry and telecom towers hovers at Rs 24-30/kWh (which includes the cost of amortisation of DG sets over a six to seven year period). The cost for generation in case of industrial captive operations is slightly lower due to the relatively efficient operations and is estimated to be around Rs 15-18/kWh.

On the other hand, LNG-based power can be produced at around Rs 9/kWh based on current LNGprices of about $14/ million metric British thermal unit (mmBtu). LNG power is clean and green. It has a carbon dioxide emission of only 0.55 kg/kWh against 1.06 kg/kWh for diesel. It can also be provided to customers on a 24x7 assured basis as compared to the interrupted and uncertain supplies of wind and solar energy.

With "gas-price-pooling" between domestic and imported sources rightly being taken up as a priority item by the power minister, the challenges to substitute diesel usage are clearly in the arena of "operations" - linkage, transmission and open access. Generating companies and consumers have to comply with the open access regulations of different states, apart from agreeing to respective state load despatch centres and the distribution company's commercial terms for open access.

Apart from this, a key hindrance is the operational feasibility of supplying gas-generated grid power to individual load centres where individual demand may be much less than the minimum threshold of one Mw needed for open access. So, necessary regulatory and policy changes need to be undertaken for:

n Clubbing the demand of various load centres to reach the one Mw threshold limit for open access eligibility, or
n Reducing the threshold demand from one Mw to a reasonable level to allow load centres to be eligible for open access, and
n Enabling "feeders" to be segregated to allow the supply of assured power to these customers.

If all this is addressed energetically in the here and now, over 30,000 Mw of gas-based power plants will immediately be humming with life - a clear demonstration of a quick turnaround effected by the new government as well as a leap forward in the prime minister's vision of "power for all".

It is time to immediately step on the pedal.