Crude Oil prices have been rising steadily since the beginning of 2021 when Brent Crude was trading at about $52 per barrel, buoyed both by hopes of improving demand due to economic recoveries across geographies, as well as supply cuts by key Oil-producing countries. The Organisation of Petroleum Exporting Countries (OPEC) extended supply cuts made in 2020 when crude Oil prices had reached a low of under $19 per barrel. Speaking of India, the prices of petrol and diesel in India are benchmarked to a 15-day rolling average of the international prices of petroleum products.Global financial major Goldman Sachs expects Brent crude oil prices to reach $110-per-barrel by early next year, a 30% jump from the current levels of almost $84. “We estimate that global Oil demand has surpassed 99 million barrels per day (mb/d) and will shortly hit its pre-Covid level of 100 mb/d, as Asia rebounds after the Delta wave,” Goldman Sachs’ analysts said in a recent note. In addition, the switch from expensive gas to a relatively cheaper Oil, may be contributing at least 1 million barrels to the recent surge in Oil demand with current gas forwards incentivising this through winter. Analysts at Goldman Sachs said that Oil price was still not high enough to generate demand destruction, given falling energy intensity in developed markets and rising income levels in emerging markets. “Specifically, we estimate that the 2022 Brent price would need to reach $110/bbl to balance the deficit we expect through Q1 2022 via the demand side alone,” said Goldman.
Fuel prices have risen not only in India, but elsewhere too. The average retail price for gasoline in the USA jumped well past $3 per gallon in 2021, the highest it has been since 2014. California saw highest prices at over $4 per gallon, with reports of global Oil demand outstripping supply in the order of anywhere between 6.5 lakh to 9.5 lakh barrels per day, going forward. The recent bull rally in 2021 in global Oil prices therefore, from a low of $19 a barrel in April 2020, to a high of over $85 in mid-October 2021, effectively means, Crude Oil prices have risen by an unbelievable 347% in the last 18 odd months. Since more than 80% of India’s Oil demand is met via imports, any surge in global Brent Crude price, obviously has a sizeable impact on India too, as both petrol and diesel are now fully deregulated.
India’s ignorant opposition has often alleged that under the inept, Congress led UPA-2, despite elevated Brent prices globally, local fuel prices were much lower. Well, that is because fuel prices were only partially decontrolled under the inefficient, Congress- led United Progressive Alliance (UPA-2). It was Prime Minister Narendra Modi-led NDA government that took the unpopular but bold and long overdue decision of decontrolling Diesel prices too in October 2014.Hence, comparing fuel price movements under the Modi government,with the erstwhile, lethargic, Congress regime, is unfair. Also, don’t forget that the previous, Congress led UPA government took loans by purchasing Oil bonds of Rs 1.44 lakh crore, that the Narendra Modi led, NDA government inherited and paid for. Not only this, the Modi government also paid Rs 70,000 crore on the interest part alone, which means, in total, the Modi government discharged debt obligations of the earlier Congress regime, by repaying over Rs 2 lakh crore. To nail the misinformation surrounding domestic fuel pricing, it is best to look at a real time, example. Assume petrol prices at Rs 100 per litre. Of this Rs 100, the Basic rate is Rs 32.97 per litre; Central government tax is Rs 21.58; State government VAT, surcharges and levies are Rs 41.67,per litre; Distributor margins work out to Rs 3.78,per litre. Clearly, it is not the Central government, but State government taxes that are the biggest component of petrol prices and also the biggest reason,for the steep rise in domestic fuel prices. Effectively speaking,State government taxes account for 41.67% of the final petrol price, whereas Central government taxes account for only 21.58% of the final petrol price per litre. Hence, before pointing fingers at the Modi government, opposition leaders like a clueless Rahul Gandhi,whose party,the Congress, is a vital part of the ruling alliance in Maharashtra, would do well to do some number crunching! In fact, along with VAT, disaster management cess and highway liquor ban cess, the net share of State taxes in fuel prices in Maharashtra is almost 50% and ditto is the case with Rajasthan— another Congress ruled State, with the highest VAT.
India imports almost no petrol or diesel. It imports Crude. But the price we pay for fuel is based largely on Import Parity Price (IPP) or the price we would pay, if India were to be actually importing petrol or diesel. India’s export of petrol and diesel is more than imports. India’s total imports in 2017-18 were worth Rs 744 million while total exports were far higher at Rs 23,858 million. Fuel is basically,priced as if it is imported.Oil refiners, who make these products in India, are paid what is called a Refinery Gate Price (RGP) based on the Trade Parity Price (TPP) which is a weighted average of the Import Parity Price and the Export Parity Price (EPP). IPP is the price importers would pay if they actually imported the product. So,it includes not just the cost of the fuel itself, but also freight charges, insurance, customs duty and port charges. EPP is what somebody actually exporting the product would get. IPP has an 80% weight and EPP only 20% in the TPP.
This method of calculating the price to be paid to refiners means that whenever international Oil prices rise, they get a windfall. That is because Customs is an ‘ad valorem’ rate or a percentage of the basic value unlike a specific duty which would remain fixed irrespective of basic price.Since customs duty is 2.5% of imported price, it goes up in absolute terms as the basic price does. So, at $100 per barrel, the duty on a barrel of petrol would be $2.5 while at $200 per barrel it would be $5. India has to import 80% of the raw material (Crude Oil), so Export Parity could not be an option and hence an 80:20 trade parity pricing (TPP),was implemented, in line with the C.Rangarajan report.
Interestingly, customs on products is 2.5% but this is applicable only on 80% of the output, effectively making it just 2%.
There are several taxes on domestic Crude such as National Calamity Duty and State Entry Tax. These are largely absorbed by the public sector Oil refiners. So after adjusting these, the effective customs duty is minimal. Effectively speaking, the burden of Customs duty is largely borne by public sector refining companies and hence to allege that refiners make abnormal gains,if global Crude prices go up,is absolutely false. To cut a long story short, with the State-level value added tax (VAT) and Sales tax being levied on an Ad-Valorem basis, tax revenues of States from petrol and diesel, rise in tandem with the increase in their prices. Elevated fuel prices, however, do not however, help the Centre much, as the Excise duties on petrol and diesel levied by the Central Government, are specific in nature, like flat rates, so whether petrol is Rs 70 or Rs 100 per litre,is largely meaningless, for Central government from a revenue standpoint. On the contrary, the biggest killing is actually made by States, who charge Ad-Valorem rates and higher the price of petrol and diesel, higher the taxes earned by States.
Again,it is nothing but sheer hypocrisy to talk of rising petrol and diesel prices,but not give the Modi government credit for the fact that compared to January 2014, when LPG gas cylinder prices went to as high as Rs 1270-1290 per cylinder, average price range of a LPG gas cylinder was between Rs 673-710,in 2019. LPG cylinder prices, in fact, fell to a low of Rs 594 in 2020. True, LPG prices have risen recently to between Rs 884-926 per cylinder. But do note that globally, propane and butane prices in the last one year have risen from $375 per tonne, to as much as a massive $800 per tonne, which is a huge,100% plus, increase. Also, do note that while average retail inflation in the last seven years under the Modi government is 4.8%,that number was 7.8% in the last seven years of Congress led UPA.
Recently there has also been a surge in edible Oil prices, globally. Since India imports between 55-70% of edible Oils like palm oil, soyabean oil and sunflower oil, domestic cooking oil prices have risen too. Argentina, one of the biggest producers of soyabean, faced huge crop losses after a severe drought. Malaysia and Indonesia curtailed exports of palm oil to India and other countries, after a big rise in local demand, due to a change in bio-fuel norms in these countries. Ukraine and Russia, amongst the largest producers of sunflower oil, also faced a debilitating drought, leading to a sharp surge in international prices, of sunflower oil.
The good news is that the area under Oilseeds has expanded in India in recent times and output is expected to be higher than the previous year. The total acreage under Oilseeds increased by 18 lakh hectares or 10% during the 2020 Kharif season, aided by the increased availability of labour, after migrants workers returned to their home in rural areas. The acreage for groundnut rose 30% and for soyabean by about 7%. Similarly, the acreage under oilseeds in the 2020-21 Rabi season was up by 4%. Mustard is the primary oilseed grown during the winter cropping season and the area under the crop is also up 5%. According to the third advance estimates of production for the 2020-21 agriculture season, oilseed output expanded by 10% to 365.65 lakh tonnes, with the soyabean crop rising almost 20% and mustard by 10%. Hence, cooking Oil prices should come down, going forward.
Allocation of Rs 2.3 lakh crore for health is a 137% jump in 2021-22, over 2020-21. Again, Rs 1.18 lakh crore for road infrastructure, Rs 1.10 lakh crore for railways, an outlay of Rs 3.6 lakh crore for the power sector and Rs 16.5 lakh crore towards agriculture credit outlay in the Union Budget, showcase how the Modi government is spending money judiciously, towards a healthier, fitter and better India. Defence allocation at Rs 4.78 lakh crore,which is up 19% in FY22,over FY21,is aimed at a more safer and secure India. Hence,allegations that resources raised via fuel taxes are being frittered away, are absolutely baseless.
Contrary to falsehoods being peddled, Prime Minister Narendra Modi has done an excellent job in controlling retail inflation which came in at 4.35% in September 2021. Food inflation came at just 0.68%, while vegetable inflation was minus 22.47%. Even in August 2021, while retail inflation measured by consumer price index (CPI) was 5.3%; food inflation was 3.11%, while vegetable inflation was minus 11.68%. Dont forget, globally, food inflation measured by the FAO Food Price Index (FFPI), is currently at the highest levels ever, since 1970. Food inflation, globally, is up by anywhere between 33-47%, compared to last year, driven by inclement weather, rising freight and shipping costs and supply side constraints. Many countries are not even able to import food grains due to depleting forex reserves and rising import costs. India stands tall, with bountiful supplies and commendable management of the food economy by the Modi government. Those who accuse the current government of rising fuel prices, should know that in the last few weeks, gas stations in the United Kingdom ran dry and out of gasoline. Finally, price of any commodity is largely driven by demand-supply dynamics and given the incumbent global shortages and rising fuel demand worldwide, India too, is seeing a rise in prices but on a relatively smaller scale, versus global peers.
To cut to the chase, India,under Prime Minister Narendra Modi, is planning to increase natural gas consumption by 2.5x as part of the energy mix— to 15.5% by 2030, from the current level of 6.2%. The ongoing transition from an ‘Oil economy’ to a ‘Gas economy’ under PM Modi’s visionary leadership is steadfastly underway. Over 70% of India’s population in over 400 districts will have city gas distribution (CGD) facility soon. Only 25 lakh households in India had access to piped natural gas (PNG) in 2014 but thanks to the Modi government’s persistent efforts, that figure more than quadrupled by 2021. Again, India only had 947 CNG stations in 2014,that number rose to 1470 stations in 2018 and is set to scale up to a massive 10,000 CNG stations in the next few years. Since CNG is anywhere between 45-60% cheaper compared to Petrol and Diesel, this will make India self-reliant, in more ways than one.
The writer is an economist, national spokesperson of the BJP, and the bestselling author of ‘Truth & Dare: The Modi Dynamic’. Views expressed are her personal.
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TMC WORKING TOWARDS UPSTAGING THE CONGRESS
West Bengal Chief Minister Mamata Banerjee is clearly working on a plan—to replace the Congress as the main Opposition force in the country. To achieve this goal, she is picking up various leaders, even though questions can be raised about her choice. Those who have joined the Trinamool Congress (TMC) as the party seeks national prominence, do not have any ground presence except perhaps in Meghalaya. By inducting Kirti Azad, who lost the last Lok Sabha elections by nearly 5 lakh votes, and Pavan Varma, who was expelled by JDU and before that was a Rajya Sabha member without any grassroots connect, it is not known what sort of a national presence the TMC is hoping to get. In Meghalaya, 12 of the 17 Congress MLAs there may have joined the TMC, but when it comes to Lok Sabha seats, Meghalaya has only two, and even if Ms Banerjee wins all the 42 seats in Bengal, her tally will go up to 44 if she wins both those seats. So TMC may have become the main Opposition party in Meghalaya, courtesy Mukul Sangma, but there are grave doubts about whether this will have a domino effect and make other Congress leaders from the Northeast make a beeline for the TMC—this could have been an immediate possibility if the TMC had done well in the Tripura civic body elections, but it didn’t. It performed miserably, managing to win 1 out of 334 wards. And in spite of the claims being made by TMC spokespersons as the party emerging as the main Opposition face in Tripura, statistics show that the Left is still ahead of the TMC. The Tripura result was not commensurate with the hype created by the TMC, proving once again that unless there is hard work at the grassroots, no Opposition party can uproot a well-entrenched ruling party. Anti-incumbency is always a factor against any government, but for the Opposition to convert that into a critical mass of votes to overthrow a government depends on a lot of factors, including the severity of the anti incumbency and the grassroots connect of the Opposition. The TMC should have known this, for this is what happened to the BJP in the Bengal Assembly elections earlier this year. It just didn’t have the organisation on the ground to convert the anti-incumbency into votes for it to defeat Mamata Banerjee’s party. From the Tripura results it is anyway apparent that in this case, anti incumbency was not severe against Chief Minister Biplab Deb.
The whole national strategy of the TMC appears to be hinged on breaking other parties—particularly the Congress—and importing their organisation in different states, but for that the electoral performance of the TMC outside its stronghold Bengal will have to be up to the mark. Why else will senior Congress leaders consider replacing the Gandhis with Mamata Banerjee as their leader? The Tripura results would not have inspired confidence in such quarters, for it drove home the point that a stellar performance by TMC against the BJP outside of Bengal is unlikely at this point.
More importantly, a lot will depend on the Assembly elections that will take place next year. If Congress does well in Punjab, then it will be easier for the Gandhis to quell dissension within the ranks and the possibility of defections will recede in the backgroumd. So TMC may have overplayed its hand by name-calling the Congress, refusing to attend meetings called by it, and by defiantly announcing that it is only the TMC, and not Congress, that can take on the BJP.
Strategy is fine, but there is nothing like hard work on the ground and reputation of being a good administrator. It does not help the TMC’s case when Kolkata is named as the worst city in the country for providing jobs and economic growth, as shown by the first Sustainable Development Goals Urban Index released by Niti Aayog last week. Also, how can there be any national leadership role for a regional party without grassroots presence in more than one state? But then the strategy is based on the hope that there will be a fractured mandate in 2024, and a party with 40-45-odd seats will manoeuvre its way to power, upstaging the Congress. Only time will tell how effective this strategy is.
Aggressive TMC to jostle with Congress for Opposition space
Trinamool Congress leader Mamata Banerjee, after her party’s decisive victory in West Bengal Assembly elections, has become aggressive and is now aspiring to dethrone the Congress from playing a leadership role for the entire Opposition.
Parliament’s winter session commenced on Monday. Although it is hoped that the rancours of the Monsoon session would subside since the issues that the Opposition cited for their ire no longer exist, an aggressive Trinamool Congress itching to play a larger opposition role may play spoilsport and create problems of floor management.
There are other parties too that would be keen to send a signal that they are not far behind if it comes to a street fight. The Samajwadi Party and the Bahujan Samaj Party and the Congress would use this session to reposition themselves for the assembly elections in Uttar Pradesh due early next year. All these parties are likely to try to achieve Muslim consolidation by raising related issues.
It would be interesting to figure out if the Parliament can discuss the Citizen Amendment Act (CAA) issue. Those who are trying to compare the farm legislations with the CAA are grossly mistaken since this would mean taking away the rights of the people already granted to them. In the case of farm legislations, nothing was being imposed and no section was negatively impacted by withdrawal. If those who wanted to benefit would have come on the streets in favour of the legislations and against those farmers agitating against the three legislations, this would have created a difficult situation.
These parties would also like to keep raking issues related to farmers. With his increasing isolation, Rakesh Tikait is becoming more aggressive. He has been abusive and challenging the government. The opposition parties may find it politically expedient to give fodder to him and keep alive the issue and try to wean away farmers from the BJP. From the perspective of the Opposition, the agitation must continue at least till the Uttar Pradesh elections. From the BJP’s perspective, Prime Minister Narendra Modi has already extended the velvet glove by withdrawing the three legislations. Tikait has already said that he would work to defeat the BJP. The government is being challenged to act tough and use force which it has been avoiding.
An interesting discussion would be on the issue of the MSP. Opposition parties have demanded that it should be made legal. Can the government do it? What are the issues impacting this and is it helpful for the country? What is the purpose of MSP and how it should be administered? The government has said that the MSP regime would continue as before. Should we not wait for the Prime Minister’s decision to set up a committee to make the MSP more effective and transparent. What is the hurry? The government has shown its commitment to the MSP by spending more money (about Rs 85,000 crore) than ever before on purchasing Rabi crops (wheat). This time money was sent directly into the accounts of farmers under DBT. A dispassionate debate would make the issue clear for people.
Nobody is in doubt that TMC leader Mamata Banerjee, after her party’s decisive victory in West Bengal assembly elections, has become very aggressive and is now aspiring to dethrone the Congress from playing a leadership role for the entire Opposition. The TMC deciding not to attend a meeting of Opposition parties called by Congress president Sonia Gandhi on Monday intended to send this message loud and clear.
Instead, the TMC is holding its national coordination committee meeting at the residence of Banerjee in Kolkata on the same day. During her visit to Delhi last week, she did not pay even a courtesy call to Gandhi and when asked, she asked bluntly if this was needed or compulsory. TMC leaders are certain that now it is Banerjee vs Gandhi tug of war on who would be the Opposition’s face.
Of late, the TMC mouthpiece Jago Bangla has been critical of Congress and its leadership. It has described the Congress as incompetent and incapable and has charged Congress leaders as being interested merely in armchair politics rather than fighting for the people on the street. It spelt out that Banerjee and not Gandhi was the real face of the Opposition.
On the eve of the Winter session, Banerjee gave a wake-up call to the Congress by inducting former Chief Minister Mukul Sangma and 11 other Congress MLAs from Meghalaya into the TMC and, thereby, making her party the main opposition in the state. She also welcomed former Haryana Congress president Ashok Tanwar and Congress leader Kriti Azad into the party during her Delhi visit. Already many other Congress leaders have joined the TMC in Goa. Sushmita Dev has joined the TMC in Assam.
One need not be too intelligent to understand the message Banerjee has given to the entire opposition and other Congress leaders who are unhappy with the leadership of the Gandhi family. She is no longer shy of claiming that she and her party can lead the opposition and not the Congress.
This newfound power and assertiveness will force it to flex muscles during the Winter session that has 20 working days. She will chart out an independent course and try to get maximum mileage through her street fighter image and no holds barred fight inside Parliament in full media presence. This is exactly what the TMC had done during the last Monsoon session where TMC MPs were at the forefront in disrupting Parliament functioning. They were involved in pushing and shoving parliament security staff.
The TMC would be more aggressive also to hide its failures in Tripura. Despite the heroics in Delhi last week, the party is bruised because of its abysmal performance in the municipal elections in Tripura. The BJP has won 329 of 334 seats. In Agartala Corporation, the party has won 51 out of 51 seats. Neither the Left nor the TMC could open their account. The Prime Minister has said this is a result of good governance.
TMC general secretary Abhishek Banerjee drew solace that it had got a substantial percentage of votes but could not explain its failure to give a fight to the BJP. He has alleged that the BJP has “butchered democracy” in Tripura. So sad that the party that has made violence its tool to achieve political supremacy in West Bengal is talking in these terms. The TMC has already sounded out that it would raise the issue in Parliament. The issues that the Opposition claimed provoked them were farmers’ agitation and Pegasus spyware controversy. Both the issues no longer exist. The farmers’ agitation has lost the punch after the government decided to withdraw the three farm legislations. The Lok Sabha and the Rajya Sabha have already passed the repeal bill on the first day of the winter session as per the promise made by the government.
The issue of Pegasus is being looked into independently by a three-member expert committee under retired Supreme Court Judge RV Raveendran. The committee has been set up by the Supreme Court and hence the Parliament, by standard convention, would do well not to discuss the issue which is being considered by the Court. The government’s stand is clear from day one that there has been no illegal snooping.
At an all-party meeting with the government, opposition leaders showed their inclination to raise various issues such as legal guarantee on the MSP, price rise, divestment of PSUs, CAA, Coal situation, and Lakhimpur violence. Defence Minister Rajnath Singh, present from the government side, urged the opposition that leaders should ensure smooth functioning of parliament so that members can have healthy debates.
Union Minister of Parliamentary Affairs Pralhad Joshi said after the meeting, “There have been many suggestions. The government is ready to discuss all issues under the rule, without disruptions. The government hopes that there will be a good discussion in the Parliament.” The Prime Minister has already said before the start of the session that the government was ready to discuss all issues and answer all questions.
But the healthy debate is the biggest casualty when the opposition tries to create optics for public mobilisation outside. The common man on the street would like to watch the debate and listen to the arguments of both the government and the opposition. This makes them understand whether the government is on the right track. The Opposition also gets a chance to present their arguments and earn support. Parliamentary debates are the opportunities to put the government on the mat.
The crucial issue is whether the opposition will do this or they will fritter away the opportunity by raising demands that the government would not be keen to accept. By creating ruckus or by disrupting proceedings using other means would not help. They must appreciate that the government has the majority to get any legislation passed. An informed debate would help the cause of people. Creating ruckus does not help the Opposition’s cause.
The writer is the author of ‘Narendra Modi: the GameChanger’. A former journalist, he is a member of BJP’s media relations department and represents the party as spokesperson while participating in television debates. The views expressed are personal.
Banerjee is no longer shy of claiming that she and her party can lead the opposition and not the Congress. This newfound power and assertiveness will make TMC flex muscles during the Winter session that has 20 working days. She will chart out an independent course and try to get maximum mileage through her street fighter image and no holds barred fight inside Parliament in full media presence.
CHANNI’S AAM AADMI IMAGE PUSHES AAP ON BACKFOOT IN PUNJAB
Punjab Chief Minister Charanjit Singh Channi is emerging as the most effective politician in the border state and if he manages to assist the Congress in winning next year’s Assembly polls, he would have joined the big league. The simple but astute politician appears to be giving a tough time to his rivals, and to begin with, he has damaged the prospects of the Aam Aadmi Party (AAP) more than anybody else. Till a few months ago, most of the surveys considered the AAP as the frontrunner in Punjab but it is evident that Arvind Kejriwal is struggling to put the Congress down, and so far, his efforts have not succeeded. Channi because of his humble background and unwavering determination is synonymous with the image of the Aam Aadmi and through his actions, has pre-empted many promises made by Kejriwal and the company. The Delhi CM had first accused Channi of being a `naqli’ Aam Aadmi but his political jibe did not click. Next, he accused Channi of being `naqli Kejriwal’, while alluding to Channi following his party’s agenda which is again proving to be counter-productive. The proof of the pudding is in eating and what Kejriwal was promising to bring to Punjab, Channi has already implemented what he is calling the Congress programme aimed at helping the common citizen of the state.
The power tariff has been brought down by rupees three, arrears of the poor have been waived off, petrol and diesel prices are down by rupees ten, and the sand is now sold for one-fourth the price it was being sold earlier. Kejriwal has claimed that at least 25 Congress MLAs and two MPs were in touch with him, but Channi has hit back by telling the AAP Boss that why would Congress MLAs be looking towards him when his own flock—11 of the 21 MLAs who won on the AAP symbol—have already switched sides. Channi has asserted that how can he be a `naqli’ Kejriwal and taunted the Delhi CM that he cannot become a `naqli’ Channi either and being an outsider to the state, the common citizen could not identify himself or herself with him. The latest attack on the Congress by Kejriwal is that he is attempting to draw a wedge in the top ranks by praising Navjot Singh Sidhu and lashing out at the rest of the leadership. Kejriwal is a master strategist in many ways and knows he has to do something fast if he has to weaken the grand old party. Congress leadership at the Centre is aware of the maverick ways of Sidhu and has also drawn a contingency plan for the poll preparation which could run parallel to what the former Test cricketer is doing.
There is speculation in political circles that Sidhu could jump towards AAP, closer to the polls, thus giving Kejriwal a popular face and adding momentum to his party’s campaign. The logic being given is that Sidhu realizes that with Channi as the head of the government, he has little chance of becoming a Congress Chief Minister in the immediate future. Punjab is turning out to be a battle between Congress and the AAP with the Akali Dal desperately trying to resuscitate itself. Captain Amarinder Singh’s new political party is yet to take off and is heavily dependent on the BJP to both fund and back it. The BJP on its part is watching the unfolding situation very closely and would want to know the list of Amarinder Singh’s candidates before supporting him. This may take time since the Captain would only be able to provide and finalise his list, once Congress declares its own nominees. Those who do not find a berth, would gravitate towards the former CM, which is the belief with which he is moving ahead. There are conjectures in political circles that his wife, Preneet Kaur, and one more Lok Sabha MP from the State may join Amarinder’s party. Preneet has already been served a show-cause notice by the AICC. On his part, Channi is unruffled by what is happening and in a recent interview to a TV news channel, had a dig at the Captain and also the Badals. He said that earlier people would want to know about the working hours of the former CM.
But now they want to know what were the sleeping hours of the current CM while referring to his tight and strenuous work schedule. He said that he has been functioning without an army of advisers, OSDs and PAs, thereby reducing the load on the exchequer while reiterating that he stood for the common citizen and not for the elites like Amarinder and Badals, who had the resources to look after themselves. The former CM had described Channi as a “good boy’’ implying that he was inexperienced. However, Channi has shown far greater political maturity towards the problems confronting the state and their solutions. The political narrative in the border state is changing at a very rapid pace, and for the Congress, which is imploding everywhere else in the country, Channi could very well be a match-winner they have been looking for.
The saga of COP26: Why we should be concerned
It is because of the flawed approach of UNFCCC and IPCC that Combating Climate Change Movement has not gained the required momentum even after 24 years of the Kyoto protocol.
The 26th Climate Change summit, called COP26 (Conference of Parties) started its proceedings on the 31st of October and continued the discussions up to the 12th of November. After a lot of haggling for two weeks, the conference produced the Glasgow Climate Pact (GCP). The media, as a whole, has dubbed the pact as a weak narrative belying the hopes, aspirations, and ambitions of those who are concerned about the catastrophic future of the earth due to the drastic changes in the climate patterns, leading to the triple problems of floods, droughts, and cyclones as a result of global warming. Antonio Guterres, UN Secretary-General, calls the deal “A compromise with welcome steps.” Originally, the conference was called upon to deliberate on three main agendas.
1. That all nations must agree to cut down the consumption of fossil fuels (oil, gas, and coal) to reach the status of Net Zero Emissions (NZE) by 2050. US agreed to abide by the directive to reach the NEZ status by 2050. But China and India agreed to achieve this target by 2060 and 2070 respectively.
2. Both UNFCCC ( UN framework convention on climate change) and IPCC ( Inter-governmental panel on climate change) had discovered that the safe value of the rise of global temperatures to prevent or avoid perceptible changes in climate cycle or pattern was 1.5 C and was likely to reach around 2050. This value of temperature rise can be stabilised provided all nations decide to gradually cut down the present level of consumption of fossil fuels to reach the Net Zero Emissions (NZE) status by the year 2050 after switching on to new renewable or non fossil fuels (nuclear or hydrogen fuel) sources of energy. Accordingly, all nations submitted their updated targets to develop alternate sources of energy by 2030 keeping in mind complete achievement of NZEs status by 2050. Indian targets were declared on the floor of the house by the Prime Minister in person.
The annual consumption of these three types of fossil fuels produces 50 billion tonnes of GHGs; Carbon dioxide being the principal component. China produces 31% emissions followed by US(16%) and India(5%).These three countries together produce 52% of the global emissions while 30 top consumer countries (G30) produce 90% of the global emissions. So it would have been much better if UNFCC and IPCC concentrated on G30 countries and leave the rest 165 who hardly consume 10% of the fossil fuels per year. In fact, many countries like Bhutan have already reached the NZE status and some are about to reach it.
The concept of NZEs does not mean that consumption of fossil fuels will be reduced to zero. It only means the following: The total amount of emissions of GHGs (calculated in terms of CO2 equivalent) from fossil fuels is equal to the amount of CO2 absorbed by the forests, crops, carbon sinks, and by new and old technologies of sequestering CO2 to be used for commercial uses.
The basic mistake made by UNFCCC and IPCC is that both did not calculate the values of the two sides of the equation for individual countries of the G30 group. This calculation would have enabled the major emitters to know the extent to which the consumption levels of fossil fuels by the years 2030 and 2050 needs to be reduced. Consequently, the individual nations could expand the forest areas to maintain a higher value of consumption of fossil fuels. The World Energy Outlook report for the year 2021 indicates that nations will have to cut down the 2019 consumption levels of fossil fuels by 50% to achieve the NZE status in 2050. In other words, China and India will have to phase out 50% of their thermal power plants by 2050 and the global consumption of crude oil would be reduced to 50 mbpd. Oil and gas-producing countries are greatly worried about the arrival of this scenario because their prosperity is entirely based on the sale of crude oil and natural gas.
3. In the 2009 climate summit at Copenhagen (COP 15), it was agreed that developed nations would release a sum of $100 billion every year towards the climate-financing fund to enable underdeveloped countries to switch on from fossil fuel energy sources to alternate sources of energy. This fund never arrived from the wallets of the rich nations and the progress of transition of energy from one side to another never picked up. India was at the forefront to take up the cause of the underdeveloped nations to compel rich nations to contribute the arrears of $ 1.0 trillion towards the climate financing fund.
THE AGREEMENT DRAFT
The Glasgow Climate Pact contains the following three features in response to the three principle issues raised above:
1. All nations agreed to focus on sticking to the Paris conference (CP21) goal of limiting the temperature rise to 1.5 C from the preindustrial levels due to global warming caused by GHG emissions. But the draft is totally silent whether countries like China and India are bound to reach NZE status by 2050 or not. Reaching NZEs by 2050 is the soul or essence of the Combating Climate Change Movement (CCCM) and the COP 26.
2. All major emitter countries of GHGs (read G30 countries) will scale up and resubmit their NDCs (nationally determined contributions) or targets for cutting down the consumption levels of fossil fuels for the year 2030 along with pathways to reach NZE status by the year 2050 in COP27 to be held next year in Egypt. India had declared that it would be able to develop 500 GW of renewable or green energy by 2030. No other country had made such an ambitious announcement.
All countries agreed to phase down the unabated coal power and fossil fuel subsidies in line with the coal use by the poor and vulnerable sections of society. The term ‘phase out coal’ was replaced by ‘phase down coal’ at the instance of India, China, and Iran. India considers this change of terms as a great diplomatic victory though the change of terms does not mean much because the NZE targets do not ask for zero consumption of fossil fuels.
3. Only a perfunctory clause was added in respect of the commitment of rich nations to pay the arrears due to the commitment made in COP9 to contribute $100 billion per year towards the climate financing fund. Now the draft says, “The member nations urge the rich nations to start the contribution fresh from now onwards till 2025 and then double the amount of contribution ($200 billion per year) from that year.” The term ‘urge’ instead of a firm direction makes the draft greatly watered down. It is not understood how the underdeveloped countries agreed to accept this clause without a firm assurance from the rich countries even though they are signatories to this draft as they were in 2009.
FLAWS IN THE APPROACH
Both UNFCCC and IPCC, the two main drivers of the Combating Climate Change Movement, have adopted a flawed approach to take the nations towards the goal of Net Zero Emission status by the year 2050. The key points of the flawed approach are enumerated below:
1. UNFCCC and IPCC should have first concentrated their efforts on reducing the consumption of fossil fuels of G30 countries (who presently consume 90% of the fossil fuels), and also hold discussions with them individually, to find out to what extent each country is really in a position to reduce the fossil fuel consumption without jeopardising the economic growth and then fix the NDCs targets for the year 2030. This exercise will greatly avoid the bickerings during the discussion during the next summit.
2. Combustion of fossil fuels presents three problems simultaneously I.e. air pollution, climate change, and depletion of resources. Air pollution has become the most serious problem at the moment. But both UNFCCC and IPCC never talk about this great health hazard. China is burning 11 million tonnes of coal and 14mbpd of oil daily (half of the global consumption) and people are facing very serious health problems in most of her big cities. India too is facing identical problems of air pollution in big cities due to vehicular emissions and Supreme Court is now taking the Delhi government to task. Likewise, depletion of these vital resources will be a big problem to be faced by the next generations. Chinese coal at the present rate of consumption will not last more than 30 years. Likewise, 60 billion tonnes of extractable coal reserves in India will not last more than 70 years. If all three issues are highlighted simultaneously, all nations will show more promptness to reduce the consumption levels.
3. Every country has its limitations in developing renewable resources of energy. Many G30 countries like Japan do not have hydropower potential. European countries do not have enough clear sky days to generate solar power during the five winter months of the year. India has very scarce potential for generating wind energy. Therefore, the two UN bodies should assess the renewable energy potential while fixing the targets.
4. The COP26 agreement only talks about reducing coal consumption whereas combustion of oil produces very obnoxious gases like SO2, NOx, and lead oxide. The major cause of severe air pollution in the cities with concomitant health hazards is vehicular emissions. Therefore, equal stress should be given to replace the existing fleet of cars and small size trucks with electric vehicles and transfer an appreciable part of the freight and passenger load of trucks and buses to the railways.
5. Use of nuclear power and hydrogen fuel can be good substitutes for replacing fossil fuels. But people do not allow the setting up of nuclear power plants after the explosion in a nuclear power plant in Japan. Research on developing hydrogen fuel is still in the embryonic stage. Therefore, G30 countries need a rethink on the use of nuclear power and should provide more funds to the development of hydrogen fuel.
6. 166 countries with very low consumption of fossil fuels discovered and cried out in the conference that real culprits of triggering climate change are 30 countries (G30) who consume 90% of the fossil fuels and release an equal amount of emissions. But the climate change does not limit the climatic upheavals to these G30 countries alone and sweeps the entire world. So they, G166, are suffering because of the brazen and profligate use of fossil fuels consumed by G30 countries to sustain their prosperous economies and leaving very little for future generations. But their genuine cry was heard and yet ignored.
It is because of this flawed approach of UNFCCC and IPCC that Combating Climate Change Movement has not gained the required momentum even after the 24 years of the Kyoto protocol. The pact reached at Glasgow on 14 November is rightly called an agreement better than no agreement. The only achievement of this conference has been to postpone its three main agendas to the next year’s conference (COP27) to be held in Egypt.
The writer is a retired Engineer-in-Chief of Public Health Department Haryana and has had an illustrious career for 34 years. Views expressed are the writer’s personal.
LEADERS REMEMBER AHMED PATEL, SONIA GANDHI’S TROUBLESHOOTER
Ahmed Patel was without any doubt the most powerful functionary of the Congress in this century. On his first death anniversary on Thursday, several top leaders paid tributes to him, recalling his pronounced role during the presidentship of Sonia Gandhi without mentioning that in fact, he was the de facto chief of the grand old party. This is not an exaggeration that he wielded more influence on the central leadership than anyone before him. Some veterans try and compare his understated but exalted position with that of R.K.Dhawan and Makhan Lal Fotedar, but Ahmed Patel had a much larger say in political matters for a considerable long period. His opponents accused him of being responsible for the decline of the Congress and often claimed that Sonia Gandhi had outsourced the party to him for day-to-day affairs and he did what he pleased, sometimes without the knowledge of the High Command. Ahmed’s grip over the organization started loosening once Rahul Gandhi came on to the political scene and though the entire Gandhi family paid homage to him on his anniversary, it was an open secret that Rahul wanted his role to diminish. The astute and perceptive former political secretary realized this and had shifted his strategy to maintain an extremely low profile while getting his way in crucial matters. In the recent past, the appointment of D.K.Shiv Kumar as the Karnataka State president was engineered by him even though Rahul was not in his favour and because the Vokkaliga community to which he belongs is essentially with H.D.Deva Gowda. Shiv Kumar got the job because he had facilitated the stay of Congress MLAs from Gujarat when Ahmed was contesting for a Rajya Sabha seat facing stiff competition from the BJP whose strategy was designed by Amit Shah. Ahmed was victorious and till this day, some questions have been raised on who was responsible for giving him the additional two votes which he required to retain the seat. These are untold stories of politics. Ahmed also played the most significant part when the Maharashtra government was formed after an alliance between the Congress, NCP, and the Shiv Sena. Like most things good or not so good done by him, he never took credit and allowed others to boast about their achievements.
Ahmed’s USP was that enjoyed cordial relations with top leaders of other parties as well and it was not surprising that after his demise, Prime Minister Narendra Modi allowed his family to occupy his official residence, 23 Willingdon Crescent for as long as they wished. They finally moved out in July. In sharp contrast, the Congress High Command did not hold even a single prayer meeting for him in the national capital, and according to the political buzz conveyed to the family that there was no need for this in the capital since condolence gatherings had taken place in Karnataka, Maharashtra and some other places.
The problem in Congress is that the leadership has not been able to find a suitable replacement for him. There is nobody close to the Gandhis who is accessible and thus in any position to address the grievances of state functionaries and ordinary workers. There is nobody to even speak to established leaders. Thus, this vacuum is hurting the party which should have by this time given greater responsibility to the likes of Kamal Nath, Ashok Gehlot, and Bhupinder Singh Hooda. Ahmed Patel like everyone else had his fault lines as well, but no one can doubt that Sonia Gandhi’s dependence on him was absolute and he was perhaps the only one who could get his way through the complicated decision-making process in the party. The erosion of the Congress started during his lifetime but the party is grappling with its worst phase with no one there to oversee the political road map and its implementation.
Gati Shakti: PM Modi’s masterplan for connectivity
Be it Purvanchal Expressway or the upcoming Jewar airport, the ability to coordinate seamlessly with the state government concerned and translate vision into reality has been the high point of PM Modi’s holistic, development-oriented agenda.
Prime Minister Narendra Modi launched the Gati Shakti, National Master Plan for multi-modal connectivity, heralding a new chapter in governance, on October 13. Gati Shakti, a digital platform, will bring 16 ministries including Railways and Roadways together, for integrated planning and coordinated implementation of infrastructure projects. It will incorporate the infrastructure schemes of various ministries and State governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN, etc. Economic Zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, and agri zones will be covered to improve connectivity & make Indian businesses more competitive. It will also leverage technology extensively including spatial planning tools with ISRO imagery developed by BiSAG-N (Bhaskaracharya National Institute for Space Applications and Geoinformatics). This multi-modal connectivity will provide integrated and seamless connectivity for the movement of people, goods, and services from one mode of transport to another. It will facilitate last-mile connectivity of infrastructure and also reduce travel time for people. In line with the goals of Gati Shakti, Mumbai Port Trust, for instance, is undertaking a slew of projects, seeking harmony between the needs of cargoes and ships on one hand and the needs of the city and citizenry on the other. Gati Shakti project is yet another instance of how cooperative federalism is something that the Modi government is fully committed to.
Needless to add, with the resolve of Aatmnirbhar Bharat, the foundation of India for the next 25 years is being laid stoutly and soundly, by the Central government. People of India, Indian industry, Indian business, Indian manufacturers, and Indian farmers are at the centre of this great campaign of Gati Shakti, which is a people-centric, futuristic, mega initiative. What sets the Modi government apart from erstwhile, lethargic, Congress-led regimes, is the fact that we have not only developed a work culture of completing the projects in time, but efforts are underway to complete projects ahead of time. With the whole-of-government approach, the collective power of the Central government is being channelled into fulfilling these infrastructure-oriented schemes. Gati Shakti is an extension of holistic governance, therefore, in more ways than one.
Over the years, the signage ‘Work In Progress’ became the symbol of lack of trust, with cost and time overruns, being the hallmark of all that was wrong with the decrepit Nehruvian model, that was repeatedly flogged for decades together, by successive Congress regimes. But today’s 21st century India, is leaving behind old systems and practices, that emanated from the “Command Economy” model of Nehru and his dynastic proponents. Today’s mantra under PM Modi is: ‘Work For Progress’.
Wealth for progress, plan for progress, and preference for progress, underline the inclusive approach of the Modi government.
The subject of infrastructure in our country was never a priority for most political parties, for decades together. This, even though it is globally accepted that the creation of quality infrastructure for sustainable development is a time-tested way to create a virtuous cycle of economic activities that create employment on a large scale. Due to the wide gap between macro planning and micro implementation, problems of lack of coordination, lack of advanced information, thinking and working in silos— all these factors led to hampered construction and wastage of government resources and budgets. Gati Shakti project will therefore be a force multiplier and working based on this master plan, will result in optimum utilisation of resources.
The first interstate natural gas pipeline in India was commissioned in 1987. After this, till 2014, i.e. in 27 years, only a 15,000 km long natural gas pipeline was built. Today, work is underway on a war footing for a more than 16,000 km long gas pipeline across the country.This pipeline is slated to be completed in the next 5-6 years. Again, in the 5 years before 2014, only 1900 km of railway lines underwent doubling. In the last 7 years alone, more than 9000 kilometers of railway lines have been doubled. In the 5 years before 2014, only 3000 km of railways were electrified. In the last 7 years alone, more than 24000 kilometers of railway tracks have been electrified. Before 2014, the metro rail was running on only about 250 km of track. Today the metro has been expanded up to 700 km and work is going on in the 1000 km new metro route. In the five years before 2014, only 60 panchayats could be connected with optical fibre. In the last 7 years of the Modi government, we have connected more than 1.5 lakh gram panchayats with optical fibre, in a grand testimony to what resolute political will can achieve.
To increase the income of the farmers and fishermen of the country, infrastructure related to processing is also being expanded rapidly. In 2014, there were only 2 mega Food Parks in the country. Today 19 mega Food Parks are functioning in the country. Now the target is to take their number to more than 40. There were just 5 waterways in 2014, today India has 13 functional waterways. Turnaround time of vessels at the ports has come down to 27 hours from over 41 hours in 2014. The country has realised the pledge of One Nation, One Grid. Today India has 4.25 lakh circuit kilometers of power transmission lines compared to 3 lakh circuit kilometers in 2014.
With the development of quality infrastructure, India can realize the dream of becoming the business capital of the world. PM Gati Shakti will be the driving factor. Just as JAM (Jan Dhan, Aadhar, Mobile) trinity revolutionized accessibility of government’s welfare schemes to the people, PM Gati Shakti will do the same in the field of infrastructure. With the Gati Shakti National Master Plan, India’s economic growth will find greater traction through major infrastructure upgrades, that will cut logistics costs and enhance efficiency. Essentially, the Gati Shakti project will be an integrated umbrella of over Rs 111 lakh crore worth of projects, under the National Infrastructure Pipeline (NIP) for the period 2021-25. This includes reducing the ratio of logistical costs to GDP that has prevailed at over 14%, before PM Modi took charge, to an aspirational level of sub 8%. Reducing vehicular emissions to meet climate change commitments, curtailing input costs on fuel, a fillip to efficiency in port operations, improvement in cargo handling capacity, and cutting vessel turnaround time, will be the added benefits and byproducts of the ambitious Gati Shakti project. The observations in the Economic Survey for 2020-21 underscore the role of active Centre-State partnerships for infrastructure building. Significant delays to projects can often be traced to hostile land acquisition decisions that alienate communities or violate environmental laws.
It is to the Modi government’s credit that environmental integrity has never been compromised and rehabilitation of affected people has always been given utmost priority. The Jewar airport’s strategic location will create over 1 lakh job opportunities for the young from adjoining areas: Aligarh, Hapur, Greater Noida, Ghaziabad, and Bulandshahr.
The airport will be spread over 1334 hectares of land and will have a capacity to serve around 1.2 crore passengers, annually. That number will go up to over 7 crore passengers from 2040 onwards. Job opportunities will come not just from work at the airport but also from allied industries like storage, defence, and food. But beyond all these numbers, what stands out is the fact that the UP government spent Rs 4326 crore on the acquisition of land, rehabilitation, and resettlement. Be it Purvanchal expressway or the upcoming Jewar airport, the ability to coordinate seamlessly with the concerned State government and translate vision into reality has been the high point of PM Modi’s holistic, development-oriented agenda.
The writer is an Economist, National Spokesperson of the BJP and the Bestselling Author of ‘Truth & Dare-The Modi Dynamic’. Views expressed are the writer’s personal
To increase the income of the farmers and fishermen of the country, infrastructure related to processing is also being expanded rapidly. In 2014, there were only 2 mega food parks in the country. Today 19 mega food parks are functioning in the country. Now the target is to take their number to more than 40. There were just 5 waterways in 2014, today India has 13 functional waterways. Turnaround time of vessels at the ports has come down to 27 hours from over 41 hours in 2014. The country has realised the pledge of ‘One Nation, One Grid’.
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