Advisory Group for Integrated Development of Power, Coal, and Renewable Energy Submits its Report

Report Covers Contemporary Issues and Challenges in Respect of the Ministries of Power, Coal, and Renewable Energy

Sh. Suresh P. Prabhu, Chairman of the Advisory Group ( now Union Minister for Railways) for Integrated Development of Power, Coal, and Renewable Energy has presented its final report to Sh. Piyush Goyal, Minister of State (IC) for Power, Coal & New and Renewable Energy here today. The Advisory Group was set up by the Government on 25th June, 2014. The Group was chaired by Shri Suresh Prabhu, Former Minister of Power, Government of India (now Railway Minister), and consists of Shri R.V. Shahi, (Former Power Secretary) as Member-Convenor, Shri Pratyush Sinha (Former Chief Vigilance Commissioner), Shri Anil Baijal (Former Home Secretary), Dr. Anil Khandelwal (Former Chairman, Bank of Baroda), Dr. K.K. Nohria (Former CEO, Crompton Greaves), Shri Partho Bhattacharya (Former CMD, Coal India), and Shri Vallabh Bhansali (Former CEO, ENAM) as Members. Starting from the First Meeting on June 27 - 28, 2014, altogether Twenty Four Meetings were held (the last Meeting on 24th December, 2014). Keeping in view the urgency in respect of some of the issues, the Advisory Group submitted two Interim Reports on 23rd August, 2014, and 7th September, 2014. The Advisory Group interacted with officials of Ministries of Power, Coal, New and Renewable Energy, Environment and Forest, Cabinet Secretariat, CEA, various Public Sector Companies, under these Ministries, officials of some of the State Governments, Consulting organizations like Mckinsey, Bain & Company, KPMG, Centre for Policy Research, World Bank, Association of Power Producers etc. to ascertain their views and suggestions. The Report covers contemporary issues and challenges in respect of the Ministries of Power, Coal, and Renewable Energy. In the Report, suggestions have been made for enhancement of coal production in short, medium and long terms. Improvements needed in Coal India and its subsidiaries including CMPDI have also been identified and appropriate actions have been recommended. It has been suggested that opening up of the coal sector may be necessary, to supplement in a significant way, the domestic production by Coal India and a few other Companies. The Group has also suggested the salient aspects of the Coal Block Auction Process, Coal Linkage Rationalization, Swapping of Coal Linkages, need for Urgent Action on Coal Linkages to Power Plants already Commissioned, and likely to be Commissioned by March, 2015, Railway Infrastructure from Coal Mines to main Railway System, to be developed through various options including JV Company on Infrastructure by CIL etc. Concerning Power Sector issues, on which recommendations have been made in the Report by the Advisory Group include Amendments to Electricity Act, Tariff Policy, Standard Bidding Documents (Case I and Case II), approach to and challenges associated with 24X7 Power Supply, Urgent need for Distribution Sector Reform with targeted actions including Privatization /PPP in Distribution, Enhanced role of and Improvements in working of CEA, Transmission constraints – short term and long term actions, enhancement of Thermal Power Capacity Addition, Advance actions for Coal Linkage and other inputs for Thirteenth Five Year Plan Projects, Need and Actions for Accelerating Hydro Power Projects, Role of POSOCO for a Congestion free Transmission and Market Development, Phasing out of old and inefficient Thermal Power Plants which consume excessive fuel etc. Recommendations on Amendments to Electricity Act include separation of Carriage and Content in the Distribution license, authorization to Central Government to adopt measures for incentivizing Renewable Energy generation, making Tariff Policy obligatory for Regulatory Commissions, New Coal based Generating Plants to also have obligation to set up Renewable Energy Generation Station as a percentage of the Conventional coal based Power Plant as specified by the Government, restricting the authority of the State Governments to issue directive to prevent Open Access, to provide options to Consumers to choose their Power Suppliers with the objective of facilitating competition in power supply, further strengthening of Penal provisions with a view to improving quality of service, and Grid discipline, establishment of regional Regulators in consultation with States at an appropriate time, mechanism for review of performance of Regulatory Commissions through Forum of Regulators etc. Renewable Energy, particularly Solar and Wind, require large scale capacity addition which will not only balance the skewed power sector profile, but will also lead to price parity with conventional power due to economy of scale. Green Transmission Corridors, Incentivizing Renewable Capacity Addition, Coal based Generating Companies to be obligated to also set up Renewable Power generation, Priority in purchase of Renewable Power by Distribution Utilities, Improving the functioning of Solar Corporation and IREDA, are some of the important recommendations in respect of Renewable Energy. Many of the amendments suggested in the Electricity Act also aim at encouraging and incentivizing Renewable Power development. It has been suggested that MNRE should get comprehensive studies conducted for more accurate estimates of Solar and Wind including Off-shore wind potentials, since the present estimates are grossly underestimated.

Integrated Power Development Scheme--Ensuring 24x7 Quqlity Power in Urban Areas

Power crisis in India is always a burning issue. With the demand for power growing manifold day by day, the need for round the clock availability of power has become more and more relevant.  With the launch of the Integrated Power Development Scheme (IPDS), power outages will be a thing of past.  Moving towards Prime Minister Shri Narendra Modi-led government's objective to provide 24x7 power supply, the Union Cabinet has recently approved multiple schemes to improve transmission and distribution networks across the length and breadth of the country. The Integrated Power Development Scheme (IPDS) is one of the flagship schemes of the Ministry of Power and will be at the core attempt to ensure 24x7 power for all.

The IPDS announced in the Union Budget 2014-15 envisages strengthening of sub-transmission network, Metering, IT application, Customer Care Services, provisioning of solar panels and the completion of the ongoing works of Restructured Accelerated Power Development and completion of the Reforms Programme (RAPDRP). The scheme will help in reduction in AT&C losses, establishment of IT enabled energy accounting / auditing system, improvement in billed energy based on metered consumption and improvement in collection efficiency. The estimated cost of the present scheme with the components of strengthening of sub-transmission and distribution networks, including metering of consumers in the urban areas is Rs. 32,612 crore which includes the requirement of budgetary support from Government of India of Rs. 25,354 crore over the entire implementation period. The component of IT enablement of distribution sector and strengthening of distribution network approved by Cabinet Committee on Economic Affairs (CCEA) in June, 2013 in the form of RAPDRP for 12th and 13th Plans will get subsumed in this scheme and CCEA-approved scheme outlay of Rs.44, 011 crore including a budgetary support of Rs. 22,727 crore will be carried over to the new scheme of IPDS. 

Eligible Utilities :

All Discoms including private Discoms and State Power Departments will be eligible for financial assistance under this scheme. Discoms will prioritize strengthening of urban infrastructure work considering specific network requirement and will formulate Detailed Project Reports for the projects for coverage under this scheme.  Projects under this Scheme will be completed within a period of 24 months from date of issue of Letter of Awards.  Power Finance corporation is the nodal agency for operationalisation of this scheme.

Funding Pattern:

Grant portion of the Scheme is 60% for other than special category States (up to 75% on achievement of prescribed milestones) and 85 % for Special category States (up to 90% on achievement of prescribed milestones). The milestones for the additional grant are : timely completion of the scheme, reduction in AT&C losses as per trajectory and upfront release of subsidy by State government. All North Eastern States including Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttarakhand are included in special category States.

Tripartite/Bipartite agreement:

Suitable Tripartite agreement will be executed between Power Finance Corporation as the nodal agency of the Ministry of Power, the State Government and the Discom to ensure implementation of the scheme in accordance with the guidelines  prescribed under the scheme. Bipatite agreement will be executed in case of State Power departments.

Model Benchmark:

A model benchmark for power systems in urban areas which sets standards in items like digital/ prepaid metering ,underground cabling of 11KV and LT lines, limits for AT&C losses etc will be prepared by Central Electricity Authority within 5^th January 2015.

Find the men for the job

Can India's public sector come to the rescue of the Indian economy? That's the question which the government has asked, in the finance ministry's mid-year review of the economy. Some economists outside the government, too, have been asking the question, since most of the leading private industrial groups are so burdened with debt that they are unable to make fresh investments. Turning to the public sector for solutions would be a complete swing away from the narrative of the last couple of decades, namely that the public sector's inefficiency was matched by the private sector's efficiency. If it does not look like such a neat equation any more, it is because many of our billionaires have got neck-deep in debt in order to fuel their ambitions. In some cases are close to drowning in debt - because of changes in the marketplace, disputes with the government on public-private partnership contracts, and sweeping court orders that followed the unearthing of scams.

While this raises questions about the quality of risk assessment in the big private groups, and about standards of corporate governance, the fact to deal with is that corporate debt is at record levels, even as profit margins have collapsed. The government review says that Indian corporate debt in relation to equity is the highest in the world, and that one-third of companies have to borrow to pay interest costs, because profits are not enough. Some business houses have been struggling to hawk assets and reduce debt, with limited results - because businessmen are unwilling to recognise losses incurred. The resulting investment famine affects other sectors, and also affected indirect tax revenue - which has grown by less than inflation this year (in constant terms, revenue has fallen). The knock-on effects of private sector profligacy (and, let's note, of crony capitalism, too) are showing.

Businessmen may complain, as they did at a closed-door session of the Confederation of Indian Industry (CII) recently, that the Modi government is not doing anything to help. But there is little the government can do. The Reserve Bank could drop interest rates, but any serious cut in rates will take time to deliver, and still more time to take effect. Mr Modi has now decided to personally monitor stalled projects that involve investment of Rs 18 lakh crore (or 14 per cent of GDP). But even if all government clearances come, who has the money to invest?

The only real answer today, as the mid-year review argues, is: the government. But that answer comes with questions. Investment could be financed if the government raised extra resources through taxation, but that is a non-option in the middle of a continuing slowdown. The government could borrow more and invest, but the history of public sector investment is that, outside of sectors like oil marketing, the return on capital employed is lower than the government's cost of borrowing. The solution would have more votaries if new companies could be created that match the record of the National Thermal Power Corporation (NTPC) or of the Delhi Metro Rail Corporation (DMRC), and/or if the projects offer high non-financial returns that help the rest of the economy perform better. Possibilities today are the dedicated freight corridors, the Delhi-Mumbai industrial corridor and perhaps the national broadband network. International financing is available for some or all of these projects, and the way to access it may be through special purpose vehicles that raise debt which the government guarantees. But this becomes feasible only if the government can find men/women who can deliver well-run projects and companies, like D V Kapur who set up NTPC in the 1970s, V Krishnamurthy and R C Bhargava who set up Maruti, E Sreedharan who set up DMRC, and Nandan Nilekani of Aadhaar fame. We need to find and empower a dozen like them. That is where the government can and should be doing more

Naval LCA makes first flight from ski-jump

A giant leap for Indian Naval Aviation

In a defining moment for Indian Naval Aviation, the first prototype (NP1) of Naval Light Combat Aircraft (LCA), the first indigenously designed and developed 4th plus generation combat aircraft designed to operate from the decks of air-craft carriers, had a successful first flight from ski-jump facility of shore-based test facility at INS Hansa in Goa on Saturday.

Piloted by Commodore Jaideep Maolankar, the Chief Test Pilot of National Flight Test Centre, the aircraft had a perfect flight with results matching the predicted ones to the letter.

LCA (Navy) is designed with stronger landing gears to absorb forces exerted by the ski jump ramp during take-off, to be airborne within 200m as against 1000m required for normal runways. Its special flight control law mode allows hands-free take-off relieving the pilot workload, as the aircraft leaps from the ramp and automatically puts the aircraft in an ascending trajectory. Dr. Avinash Chander, Director General DRDO, congratulated the LCA Navy program team and said, “With today’s copybook flight of LCA-Navy from the land based ski-jump facility we see our own indigenous combat aircrafts soon flying from the decks of our aircraft carriers.”

“The maiden successful picture perfect launch of NP1is a testimony to the tremendous efforts put in by scientists and engineers to design the Naval aircraft, its simulator [that helps pilots to know well in advance how the aircraft will behave on ski jump] and the flight test team that timed the whole event to near perfection,” a Defence Ministry press release said.

It can be stated with conviction: “The indigenous Indian Naval Carrier Borne Aviation program has been launched, literally from the Ski-Jump,” the statement added. The NP1 will be more of a technology demonstrator and the Navy is waiting for LCA-2, with a more powerful engine, for operational deployment, Navy sources informed.

The Shore Based Test Facility has been created to replicate the aircraft carrier with a ski jump for take-off and arresting gear cable for arrested landing by Aeronautical Development Agency with the participation of the Indian Navy, Goa shipyard and Indian Navy with Russian agencies providing the design support and specialised equipment.

Strengthening accountability

In a significant judgment, the Supreme Court recently quashed a “two-judge committee” set up by the Chief Justice of the Madhya Pradesh High Court to probe allegations of sexual harassment against a judge of the court. By insisting on the strict implementation of in-house procedures in cases of complaints against judges, this judgment marks a step towards greater transparency and certainty in proceedings relating to judges. In this case, the charges of harassment were levelled by a former Additional District and Sessions Judge of the Madhya Pradesh Higher Judicial Service. Her writ petition claimed that the in-house procedure envisaged by the Supreme Court was ignored by the High Court. Looking at how the judiciary addressed her complaint, the Supreme Court concluded that the prescribed procedures were not followed, and ordered a fresh probe. This commendable move reasserts the Court’s seriousness of purpose in ensuring a gender-sensitive process of internal investigation on sexual harassment complaints.

One of the first investigations into judicial misconduct was the impeachment process against Justice V. Ramaswami of the Supreme Court, in 1991. That case brought to the fore the inadequacies of the impeachment process under the Constitution and made evident the absence of legal authority in the Chief Justice of India to take any action in such situations. In a subsequent case of allegations against Chief Justice A.M. Bhattacharjee of the Bombay High Court, the Supreme Court for the first time laid down an in-house peer review procedure for “correcting [the] misbehaviour” of judges. In 2008, these in-house procedures were employed in investigating allegations against Justice Soumitra Sen, leading to impeachment proceedings. The Supreme Court has now taken this prescription further by declaring that these procedures be widely publicised and made available on the judiciary’s websites. However, it has to be noted that apart from the far-fetched impeachment process prescribed under the Constitution, there is as yet no institutional design or statutory law that can adequately support a transparent process of judicial inquiry, so as to enhance the accountability and legitimacy of the institution. The courts continue to be insular, oblivious to the principle of open justice — a stand justified on the ground of safeguarding judicial dignity and independence. Be it over criticism against judicial appointments or judgments like Swatanter Kumar (2014) that prohibited media reporting of sexual harassment allegations made by an intern against a judge, the judiciary has often been too defensive, deflecting criticism and hardly acknowledging the need for transparent accountability.

India to reach replacement levels of fertility by 2020

Total fertility rate in 8 States below 2 children per woman

Fertility is falling faster than expected in India, and the country is on track to reach replacement levels of fertility as soon as 2020, new official data shows.

The 2013 data for the Sample Registration Survey (SRS), conducted by the Registrar General of India, the country’s official source of birth and death data, was released on Monday.

The SRS shows that the Total Fertility Rate – the average number of children that will be born to a woman during her lifetime – in eight States has fallen below two children per woman, new official data shows.

Just nine States – all of them in the north and east, except for Gujarat – haven’t yet reached replacements levels of 2.1, below which populations begin to decline. West Bengal now has India’s lowest fertility, with the southern States, Jammu & Kashmir, Punjab and Himachal Pradesh. Among backward States, Odisha too has reduced its fertility to 2.1.

“At 2.3, India is now just 0.2 points away from reaching replacement levels. Fertility is declining rapidly, including among the poor and illiterate. At these rates, India will achieve its demographic transition and reach replacement levels as early as 2020 or 2022,” Dr. P. Arokiasamy, a demographer and Professor at the International Institute for Population Sciences (IIPS), Mumbai, explained to The Hindu.

The news on the other key indicator in the SRS - the infant mortality rate (IMR) - is less positive. India’s IMR has fallen to 40 deaths per 1,000 live births, and 49 deaths of children under the age of 5 for every 1,000 live births, but at these rates is unlikely to meet its Millenium Development Goals for 2015. IMR has fallen faster in rural areas than in urban areas.

Among the metro cities, Chennai has the lowest IMR (16). Among states, Kerala has by far the best IMR at 12 deaths per 1,000 live births; the next best states, Delhi and Maharashtra, have IMRs that are twice that of Kerala.

Another worrying trend that continues is the unnaturally higher mortality rates both for infant girls and for girls under the age of five than for boys, a trend that runs contrary to the global trend.

Mr Modi's follow-through risks For India to make the most of Narendra Modi's ambition and energy, he must get New Delhi to keep up

Few analysts expected Narendra Modi to pay serious attention to foreign policy in the weeks and months after taking office. There was (and remains) so much to do on the domestic front to redeem the promises he made in his campaign that many, including this columnist, felt that it would be some time before the new prime minister got round to external affairs. Yet Mr Modi surprised us right from the word go: he shook up the stodgy diplomacy of the subcontinent before capturing unprecedented attention in Japan, the United States and Australia, and elsewhere.

Only curmudgeons will deny that Mr Modi has gotten off to a brilliant start in foreign policy, re-establishing India as a significant player in international affairs. Even Singapore's The Straits Times has acknowledged this, with its editors picking the Indian prime minister as the Asian of the Year 2014.

Mr Modi has raised expectations across the region. Such is India's position in regional geopolitics that countries ranging from Japan to Australia, Vietnam to the United States expect New Delhi to take their side in their disputes with China. Beijing, for its part, is likely to calculate that it can no longer count on India to be tentative in its Indo-Pacific engagement. As a result, geopolitics has become a few notches more serious for India, and with that come several risks that theModi government will have to manage.

First, India's foreign service is understaffed, which means that there is a limit to which it can follow through on Mr Modi's energetic initiatives. If diplomatic capacity does not catch up, the gap between the prime minister's promise and the foreign service's delivery can diminish India's credibility in the international arena. Even if the entire Indian Foreign Service(IFS) adopts Mr Modi's famously short sleeping hours, there is so much on their agenda that outcomes will suffer.

For India to take advantage of the openings and the opportunities Mr Modi has created, the government will have to urgently add both implementation and intellectual capacity to the ministry of external affairs. In the short term, the government could draw on talented officers from other civil services and the armed forces. Over the longer term, the IFS needs to be enlarged. Only the prime minister's imprimatur can make these changes happen.

Second, domestic politics can constrain Mr Modi's ability to deliver his part of international deals, much like they did his predecessor. The Rajya Sabha, where the National Democratic Alliance does not have the numbers, can throw a spanner in the works on any foreign policy endeavour that needs legislative sanction. Solving the impasse over the United States civil nuclear reactor sales ahead of Barack Obama's visit to New Delhi in January is in the mutual interest of both countries. Mr Obama is also keen on a climate deal. If he wants to move on these, Mr Modi will not only have to contend with parliamentary opposition, but also the statements of the Bharatiya Janata Party while in opposition, and the views of some of his own supporters. This is true not only for deals with the United States, but with Bangladesh, China, Japan and others.

Third, by courting the Indian diaspora, Mr Modi cannot avoid stepping into their politics. This is a double-edged sword and can get messy, especially where there is an expectation that New Delhi will intervene on their behalf in local political or ethnic disputes. Going to any extent to protecting the interests of Indian citizens is fine and called for. However, the slightest intervention concerning foreign citizens of Indian origin is an altogether different category and comes with different types of risks.

Fourth, India lacks expeditionary military capacity. The Indian navy is a significant force in the Indian Ocean region, has increased its operations and a decent expansion plan. This gives New Delhi some power in the maritime space, from countering seaborne threats like piracy to delivering humanitarian relief in disaster-struck regions. However, for diplomacy to have a sharp end, New Delhi must have the ability to readily land and sustain brigade level formations in regional conflict zones.

Fifth, Mr Modi's second most difficult foreign policy challenge will be to manage the tensions along the frontiers with Pakistan and China. It serves the Pakistani military establishment's interests - almost at any given time - to raise the ante along the Line of Control and embroil India in a border conflict. There is also the risk that some of Pakistan's terrorist proxies will carry out terrorist attacks on Indian soil. The government will face immense public and political pressure to respond forcefully. Whatever else such escalation might achieve, it will suck out most of the energy of the government's foreign policy apparatus, affecting the larger agenda Mr Modi has set.

Finally, the biggest foreign policy challenge for the Modi government is the task of restoring India's economic growth. There is no paradox here: for the favourable reception Mr Modi received in the world's capitals lies in their perception that India is part of the solution to their own problems. They look towards a growing India has extensive trade and investment with the world. After the novelty and the shine wears off a promising new government, it is the economic indicators that will matter. So growth is a foreign policy imperative.

It is good to have a prime minister who revels in foreign affairs. But for India to make the most of Mr Modi's ambition and energy, he must get New Delhi to keep up.