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Policy & Politics

New Development Financial Institution should balance between infrastructure and development needs

Union Finance Minister Nirmala Sitharaman, in her Budget speech, said that a Bill would be introduced to set up a DFI and Rs 20,000 crore would be provided to capitalise the institution. ‘The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years’ time,’ she said.

Tarun Nangia

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Professor Stephany Griffith-Jones, Financial Markets Director, Initiative for Policy Dialogue, Columbia University, said that the focus on DFIs now is on helping countries to achieve ‘green growth’, promote innovation, provide counter-cyclical finance not just to the infrastructure sector but also crucial areas.

Former Deputy Governor of the RBI, Rakesh Mohan, on Friday suggested that the proposed new Development Financial Institution (DFI) needs to attract ‘patient capital’ investors as well as leading experts on its board and in top management. Mohan, who was also a former Executive Director at the IMF, made these comments during a webinar organised by the think-tank Research and Information System for Developing Countries (RIS) and India International Centre.

It comes in the backdrop of the Union Budget 2021-2022 recognising the long-term debt financing needs of the infrastructure sector and proposing a “professionally managed” DFI “to act as a provider, enabler and catalyst for infrastructure financing”. Finance Minister Nirmala Sitharaman, in her Budget speech, had also said that a Bill will be introduced to set up a DFI and provided Rs 20,000 crore to capitalise the institution. “The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years-time,” she had said. Later, Financial Services Secretary Debasish Panda had reportedly said India Infrastructure Finance Company Limited could be subsumed into the new DFI – the National Bank for Financing Infrastructure and Development. The proposed DFI will also play a crucial role in realising the National Infrastructure Pipeline, under which around 7,000 projects have been identified with an estimated Rs 111 lakh crore-worth of investment between 2020 and 2025.

Rakesh Mohan also proposed that the new DFI should be headquartered in Mumbai, India’s financial capital. The first CEO or CMD of the proposed DFI should be a person with India’s best interests in mind.

Echoing Mohan, former Deputy Governor of RBI Shyamala Gopinath also said there should be an emphasis on good governance. In addition, there is a need to focus on issues such as contract enforcement and project bankability, she said.

Speaking on the occasion, former Executive Director of IDBI, G. A. Tadas, said the Budget proposal of providing Rs 20,000 crore to capitalise the institution will not be sufficient to finance infrastructure projects to the tune of Rs 111 lakh crore by 2025 and help the country to be a USD 5 trillion economy. The initial capital for the DFI needs to be augmented to at least Rs 50,000-60,000 crore to achieve a portfolio of around Rs 5 lakh crore in the next three years, he added. He said there has to be an emphasis on a robust risk management System.

Professor Stephany Griffith-Jones, Financial Markets Director, Initiative for Policy Dialogue, Columbia University, said the focus on DFIs now is on helping countries to achieve ‘green growth’, promote innovation, provide counter-cyclical finance not just to the infrastructure sector but also crucial areas such as health and other social sectors. Larger number of DFIs can have greater impact, she said, adding that post the COVID-19 pandemic outbreak, the DFIs have seen a renaissance.

Professor Sachin Chaturvedi, Director General, RIS and Professor Milindo Chakrabarti, Visiting Fellow, RIS, also spoke during the programme.

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Policy & Politics

ROHINGYA DEPORTATION & THE CITIZENSHIP AMENDMENT ACT: ‘ALIENS’ MUST ENTER INDIA LEGALLY

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At the beginning of the year gone by, and before the coronavirus scourge had engulfed the entire globe, our nation was within the grasp of a powerful and exacting movement against the amendments introduced by way of the Citizenship (Amendment) Act, 2019. Without delving into the details of the same, the opposition was principled around the fact that special citizenship provisions were made available specifically to Hindu, Sikh, Buddhist, Jain, Parsi and Christian communities from the neighbouring Muslim-majority countries of Afghanistan, Bangladesh, and Pakistan to the explicit exclusion of those belonging to the Muslim community.

To the layman, the above amendment would seem an exercise in discrimination, inequality, arbitrariness and absurdity. However, as had been contended last year in an earlier written piece, the doctrinal approach centred around the ‘right to equality’ under Article 14 coupled with the ‘right to life and personal liberty’ under Article 21 of the Constitution of India would be of no avail to those who find themselves on the anvil of exclusion under the amendment of 2019. No doubt, the dual protection vide Articles 14 and 21 preserves the rights therein to citizens and non-citizens alike. However, a mere cursory glance through Part-III, i.e. the chapter on ‘fundamental rights’, would make it manifest that the Indian Constitution very clearly bestows certain additional rights and liberties unto its citizens to the explicit and unambiguous exclusion of aliens and/or those who’ve entered the sovereign territory of India in an illegal manner.

As had been argued earlier, only the Union Parliament is given powers to make laws unto ‘foreign jurisdiction’, ‘citizenship, naturalisation and aliens’, ‘extradition’ and ‘admission into and emigration and expulsion from India’. Irrespective of the guarantees of equal protection to citizens and non-citizens alike vide Articles 14 and 21, the same has to be tempered in consonance with Article 19 which is exclusively applicable to Indian citizens; incidentally the Supreme Court of India, per its recent order in Mohammad Salimullah and Anr. versus Union of India and Ors, tends to agree with the above proposition.

Succinctly put, the Apex Court has essentially laid out three crucial propositions; (1) India’s obligations and respect for international treaties/covenants/conventions ought not be in conflict with any contrarian position appearing under its municipal laws, i.e. laws enacted by the Indian legislature, (2) the rights emanating from Article 14 and 21 are undoubtedly available to all ‘persons’, i.e. non-citizens and citizens alike, and (3) rights ancillary and concomitant to Article 19, despite touching upon protections guaranteed under Articles 14 and 21, must be adjudged on the anvil of Article 19(1) read-with Article 19(2).

Therefore as the law stands concerning the troika of rights under Articles 14, 19 and 21, it emerges that ‘aliens must enter India legally’ if they wish to seek protection of rights at par with citizens under Article 19 and evidently thus the debility unto non-citizens renders any such requisitions vis-à-vis equality and equal protection untenable.

Hence, what flows thereof, and rightly so in the opinion of the authors, the Apex Court’s ruling provides more than a glimpse into the way the highest court of the land may end up dealing with the challenge to the amendment of 2019. Questions of morality and ethicality apart, the 2019 amendment is of little or no concern to Indian citizens for at the end of the day all who entered the sovereign territory of India prior to the cut-off date outlined therein are deemed to have done so illegally and without authority of law. Thus, for all such aliens, be they of any faith, there exists no guarantee whatsoever ‘to move freely throughout the territory of India’ or ‘to reside and settle in any part of the territory of India’.

Out of this group of illegals, and undoubtedly done so in an artificial manner, the amendment of 2019 bestows additional rights at par with citizens, upon a particular group of people who are not practising a particular faith; in that sense their continued presence inside the Indian territory (be it in any part thereof) is no longer deemed to be illegal and they enjoy the trinity of rights guaranteed vide Articles 14, 19 and 21 in its entirety.

Now consider the case of those who’ve been denied this special and artificial conferment, not only were they illegals at the time of entering Indian territory, they continue to remains so for not being covered under the amended umbrella. This would not only lead to an explicit denial of rights under Article 19, it also means that any argument resting on equal treatment/protection thereof shall surely fall through for illegals/non-citizens can never be placed on the same mantel as those who have specifically been included and recognised as part of the citizenry. Deportation, therefore, of illegals is not protected unless statutorily provided and protected in a specific and explicit manner. Inescapably, any remedy, if at all, against the 2019 amendment is a political one for the Apex Court is most unlikely to render it inoperable.

In conclusion, one must pay heed to the scheme of our Constitution and the deliberate manner in which the framers defined ‘Citizenship’ under Part-II beforehand venturing into laying out the ‘Fundamental Rights’ vide Part-III. A conjunctive reading of both parts would lead to the peerless conclusion that certain rights were very deliberately reserved for Indian citizens and concomitantly very deliberately denied to aliens. In fact, the conscious decision-making of the framers becomes apparent by way of the wordings of Article 11 (Part-II) which in a non-obstante manner gives power to Parliament ‘to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship.’

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Policy & Politics

INDIA OPPOSES RICH WORLD’S EFFORTS TO HOARD COVID VACCINES; SEEKS SUPPORT FOR ITS PROPOSAL AT THE WTO ON ITS EFFORTS TO GET TRIPS WAIVER TO COVID VACCINES

Tarun Nangia

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India on Friday vehemently opposed ‘vaccine nationalism’ — or the attempts by some developed countries to hoard vaccines and not sharing them or the related Intellectual Property Rights (IPR) with a view to maximise profits from not just Covid-related vaccines, but also from therapeutics and diagnostics.

New Delhi also called for greater support to its proposal along with South Africa at the World Trade Organization (WTO) to waive the implementation, application and enforcement of certain Sections of the TRIPS Agreement (Agreement on Trade-Related Aspects of IPRs) ‘in relation to prevention, containment or treatment of Covid-19 until widespread vaccination is in place globally, and the majority of the world’s population has developed immunity’.

Sanjay Bhattacharyya, India’s BRICS Sherpa and Secretary (Consular, Passport and Visa and Overseas Indian Affairs), Ministry of External Affairs, expressed serious concern over ‘vaccine nationalism’ and said India and South Africa have repeatedly asked WTO members, especially from the developed world, to agree to provide IPR waivers to ensure that the developing world was able to access the vaccines. Shri Bhattacharyya said India has helped the global community by delivering 64 million doses of vaccines to more than 80 countries, and has shown the willingness and capability to shoulder greater responsibility to not only be the ‘pharmacy of world’, but also be a reliable provider of medicines and healthcare worldwide. He was delivering the inaugural address at the two-day BRICS Civil Forum 2021 held in a virtual format and organised by the think-tank RIS. The official also called for reforms of multilateral bodies including the UN, IMF, World Bank and the WTO so that they can respond better to global challenges including pandemics, digital divide, climate change and terrorism.

In his keynote address, Shri P. Harish, India’s BRICS Sous Sherpa and Additional Secretary (ER), Ministry of External Affairs, said the multilateral bodies have not lived up to the expectations, adding that the edifice of the international system has been weakened and undermined. He said BRICS countries should work to strengthen the international governance architecture and enhance the capacity of WHO, IMF, World Bank and the WTO to make it more inclusive, representative and democratic by enhancing the participation of developing countries to effectively address various challenges confronting the world today.

Professor Sachin Chaturvedi, Director-General, RIS, said the priorities for BRICS during the year include ‘reformed multilateralism’, ‘technological and digital solutions for Sustainable Development Goals’, ‘enhancing people-to-people cooperation’ and ‘counter terrorism cooperation’. Dr. Mohan Kumar, Chairman, RIS, said there was a need to study how the BRICS countries have reacted to the COVID-19 pandemic including sharing best practices, adding that it would be useful to look at the strengths and weaknesses of BRICS countries in this regard to be better prepared for future global health crisis-like events. He said the BRICS bloc must also cooperate on finding common solutions to address the widening inequalities within the BRICS countries, especially following the pandemic outbreak.

Dr. Victoria Panova, Managing Director, Russian National Committee on BRICS Research and Vice President for International Relations, Far Eastern Federal University, Russia, presented the report of BRICS Civil Forum 2020, and mentioned about initiatives including BRICS vaccine research centre and a program to stimulate green investments.

Amb. Pavel Knyazev, Russia’s BRICS Sous-Sherpa, said the COVID-19 pandemic has provided opportunities for BRICS countries to not only consolidate their efforts so far but also to collaborate for a better future. Amb. Ben Joubert, South Africa’s BRICS Sous-Sherpa, said BRICS countries need to address the common challenges of poverty, inequality and unemployment, and push the development agenda in various international fora. Amb. Amar Sinha, Distinguished Fellow, RIS also spoke on the occasion.

BRICS has shown resolve through the creation of new financial mechanisms under the BRICS, viz. the New Development Bank and the Contingent Reserve Arrangement. Arguably, organisational and decision-making parameters in these institutions are more democratic than that of the Brettonwood institutions. Similarly, BRICS needs to lend stronger voice towards reviving the WTO and retaining its development centrality.

The event had sessions including on ‘reformed multilateralism’, ‘development finance and global public goods’ and ‘pandemic response, partnership and role of civil society’. India assumed the BRICS Chairship in 2021, at a time when BRICS is celebrating its 15th anniversary. Under the theme “BRICS@15: Intra-BRICS Cooperation”, India’s approach is focused on strengthening collaboration through “Continuity, Consolidation and Consensus”.

The ten themes for BRICS Civil Forum 2021 include reformed multilateralism; development finance and global public goods; pandemic response, partnership and role of Civil Society; quality of economic growth and inclusion; wellness, health and traditional systems of medicines; BRICS economies and women participation; future of education and skills — new paradigms of learning in BRICS; ‘entitlements to entrepreneurship — role of technology’; people’s participation in sustainability – BRICS Experience; and dialogue on society and peace building. RIS is planning to organise a series of events on thematic dialogues, starting with the Curtain Raiser on 16-17 April 2021 and ending with the final event in July 2021.

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Policy & Politics

Freedom fighter’s widowed/divorced daughter having no income entitled to his pension; blanket exclusion violates Article 14: Calcutta High Court

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In a great respite for widowed/divorced daughter having no income, the Calcutta High Court on 7 April, 2021 in a latest, learned, laudable and landmark judgment titled Sonali Hatua Giri Vs Union Of India and others in WPA 13806 of 2019 (Via Video Conference) has declared Clause 5.2.5 of the Guidelines for Disbursement of Central Samman Pensions followed by Authorized Public Sector Banks, issued by the Ministry of Home Affairs as being violative of Article 14 of the Constitution of India after observing that the “blanket exclusion of widowed/divorced daughters, including even those who do not have any personal income in lieu of maintenance or otherwise, is patently de hors Article 14 of the Constitution of India which enshrines the guarantee of equality to all citizens”. It must be mentioned here that the observation came in a petition challenging the vires of Clause 5.2.5 of the Scheme providing for disbursement of pension to freedom fighters under Central Samman Pension Scheme. While observing that the object of the Scheme was to be formulated as “a token of honour by a grateful nation to the honourable freedom fighters and their dependents, the Calcutta High Court also made it explicitly clear that it was not necessary that the term “dependents” under the Scheme has to be necessarily be in consonance of other laws such as Succession Acts of various religious communities.

To start with, a Single Judge Bench comprising of Justice Sabyasachi Bhattacharya of the Calcutta High Court who has authored this brief, brilliant, bold and balanced judgment sets the ball rolling by first and foremost observing that, “The challenge presently under consideration is to the vires of Clause 5.2.5 of the Guidelines for Disbursement of Central Samman Pensions to be followed by Authorized Public Sector Banks issued by the Ministry of Home Affairs, FFR division. The said Scheme is for disbursement of pension to freedom fighters under the Central Samman Pension Scheme. The guidelines-in-question provide the modalities of such disbursement.”

While elaborating on the facts of the case, it is then pointed out in the next para that, “The petitioner is the daughter of a deceased freedom fighter, who had been getting pension under the said Scheme for the Swatantrata Sainik Samman Pension till his demise on December 4, 2012. The petitioner was married but subsequently got a decree of divorce on March 19, 1999 and has since been residing at her paternal house along with her son and was dependent on her father since she had foregone her right of alimony from her husband.”

While continuing in a similar vein, the Bench then adds in the next para that, “The petitioner submits that after the demise of her father, her widowed mother also applied for grant of such pension in her favour. However, such representation was kept pending for an inordinately long time and ultimately the mother of the petitioner died on February 18, 2019 as well, leaving behind her son and daughter, that is, the writ petitioner.”

What is worse, the Bench then states in the next para that, “Subsequently, the petitioner also made a representation before respondent no. 5 requesting for disbursal of family pension in her favour as a dependent daughter. However, such request has not yet been considered till date.”

To put things in perspective, the Bench then states that, “At the outset, the challenge to the vires of Clause 5.2.5 is required to be considered, since the decision on the same will affect the outcome of the writ petition otherwise. The relevant provision in the Guidelines is found in Clause 5.2 thereof, which deals with transfer of pension to spouse(s)/daughter(s). Clause 5.2.3 stipulates that the spouse/daughter must fulfil the twin conditions of being “unmarried” and “having no independent source of income”.”

To be sure, the Bench then points out in the next para that, “Clause 5.2.5, on the other hand, stipulates that widowed/divorced daughter is not eligible for Samman pension.”

It must be added here that the Bench then notes that, “By placing reliance on an unreported Order dated July 29, 2016 passed by the Punjab and Haryana High Court in Letters Patent Appeal No.171 of 2015 (Khajani Devi Vs. Union of India and others), learned counsel submits that the benefit of the Scheme is admissible to a divorced daughter. A two Judge Bench of the Supreme Court, by an Order dated September 27, 2019 passed in SLP (C) No. 02353 of 2019 (Union of India and others Vs. Khajani Devi) was pleased not to interfere with the same on the view that the order adopts a progressive and socialist constructive approach.”

But the Bench then envisages in next para that, “However, the Himachal Pradesh High Court had taken a contrary view in an Order dated July 18, 2019 passed in CWP No.1504 of 2019 (Tulsi Devi Vs. Union of India and another). A three-Judge Bench of the Supreme Court, by an Order dated May 28, 2020 passed in an SLP arising out of Diary No.7497 of 2020 (Tulsi Devi Vs. Union of India and another) was pleased to issue a notice in the matter. Such issue is, thus, pending adjudication before the Supreme Court and it is argued that judicial decorum warrants that since the Supreme Court is in seisin of the mater, this Court should not take any view at this stage.”

Be it noted, the Bench then observes that, “As regards the contention of respondent no.1 that judicial decorum ought to constrain the hands of this Court due to pendency of a similar issue before the Supreme court, such contention is not acceptable, at least in the present case, since mere pendency of challenge in a different case cannot have any direct bearing on the adjudication at hand. That apart, in view of the implicit urgency involved, since the petitioner has no income to sustain herself and her minor son without any income, the matter pertains to her livelihood and cannot be stalled indefinitely for the adjudication of the matter pending before the Supreme Court.”

For the sake of clarity, the Bench then adds in the next para that, “Although the dismissal of a Special Leave Petition by the Supreme Court does not tantamount to affirmance of an order on merits, which would lend binding force to such order as the law of the land is declared by the Supreme Court, the Punjab and Haryana High Court had taken a clear view that divorced daughters are also entitled to benefit under the Scheme-in-question.”

Going further, the Bench then also adds in the next para that, “The view taken by the Himachal Pradesh High Court did not lay down any ratio on the vires of Clause 5.2.5 and/or decide the question which has fallen for consideration before this Court. In the said case, being Tulsi Devi (supra), the Himachal Pradesh High Court held that the “Swantrata Sainik Samman Yojana” has been launched as a mark of respect to the freedom fighters whereas in the case of armed force personnel or the Central/State Government pensionaries/employees, the pension is not a ‘bounty’, but a property. Thus, a line of distinction was drawn between such pensions and the pension payable to freedom fighters and their heirs.”

On a humble note, the Bench then moves on to then observe that, “With utmost respect, even without going into the question of parity with other pension schemes, the view of the Punjab and Haryana High Court is more applicable in the present case. In the said judgment, it was held that it would be a travesty to exclude a divorced daughter when an unmarried daughter finds mention in the list of eligible dependents. It was further held that there would be no rationality to the reason for such distinction, particularly when the divorced daughter is the sole eligible dependent and qualifies for the benefit. It was held that a beneficial scheme such as the one in hand should not be construed on a strict interpretation, which tends to disapprove the claims of the benefit, to result in virtual frustration or negation of the laudable motive of the scheme itself.”

Adding more to it, the Bench then also observes that, “In my view, the ratio laid down by the Punjab and Haryana High Court in Khajani Devi (supra) is also applicable in the present context and appeals to the judicial conscience on a higher footing than the Himachal Pradesh report.”

In hindsight, the Bench then while candidly applying the Constitutional principles adds that, “A combined reading of Article 14 of the Constitution of India, which is a fundamental right of equality before the law, and Article 39(a), ensures that the State is to direct its policy towards securing such end. Clause (d) of Article 39 also ensures that there is equal pay for equal work for both men and women. Although Article 39 is a Directive Principle of State Policy, not directly enforceable in law, the fundamental rights of the citizens of India ought to be considered in the context of the directive principles to lend teeth to the intentions of the framers of the Constitution of India.”

As a corollary, the Bench then ostensibly goes on to set the record straight by observing that, “In view of Clause 5.2.3 having conferred eligibility on spouses/daughters who are unmarried and have no independent source of income, Clause 5.2.5 of the guidelines is ex facie irrational, since it excludes widowed/divorced daughters from the eligibility.”

What’s more, the Bench then concedes that, “The scheme was formulated as “a token of honour by a grateful nation to the honorable freedom fighters and their dependents” as per its own language.”

Without mincing any words, the Bench then waxes eloquent to hold that, “It is not necessary that the term ‘dependents’ as used in the scheme has to be in consonance with Succession Acts of various religious communities. However, even if we take into consideration the acts in question, no line of distinction has been drawn between divorced and unmarried daughters. For example, if we read Sections 8 and 9, in conjunction with the Class I of the Schedule to the Hindu Succession Act, 1956, it will be evident that the Class I heirs include not only the widow but also the daughter of the deceased. Hence, no line of distinction has been drawn between “unmarried’ and “divorced” daughters. A criterion which defies logic cannot be “intelligible” in the true sense of the term.”

Not stopping here, the Bench then further holds that, “A bare perusal of Clause 5.2.3 of the guidelines in-question indicates that there is already a safeguard against abuse of the provisions of the scheme by including the yardstick, “having no independent source of income” as a condition of eligibility. Such qualification circumscribes the eligibility of unmarried daughters. Since, as per the arguments of the respondent no.1, an analogy has been sought to be drawn with the respective Matrimonial Laws of different communities, we ought to look into the efficacy of such remedies on the touchstone of efficacy.

Truly speaking, the Bench then concedes graciously that, “All the recourses and legal remedies open to divorced and widowed daughters require long-drawn litigation and mere rights available in the statute books. In order to get the fruit of such litigation, a widowed/divorced daughter has to wait till the end of litigation. The amount actually granted to such daughter by the court of law also acquires relevance vis-à-vis her subsistence requirements. Legal provisions cannot meet the pangs of hunger and/or urgent necessity of sustenance of human beings. As stipulated in case of unmarried daughters, widowed/divorced daughters also qualify as unmarried but have been excluded from the pension scheme. In the event Clause 5.2.5 was not there, the expression ‘unmarried’ could very well include within its purview widowed/divorced daughters of the pension holders as well, since their marital status would also be on an equal footing with unmarried daughters. The mere possibility of a legal remedy, or an order of court granting meager amount as maintenance is not adequate to meet the necessities of widowed/divorced daughters but they may also be dependents of their father, being the freedom fighter, in the event they do not/cannot opt for taking recourse to legal remedies and do not have income sufficient to maintain themselves.”

In the same vein, the Bench then also makes it clear that, “Since the rider, “having no independent source of income” already qualifies unmarried daughters in Clause 5.2.3 of the guidelines, such test acts as a sufficient safeguard to prevent abuse of the pension scheme by widowed/divorced daughters of the freedom fighter who otherwise have an independent source of income, be it from alimony/maintenance or from some other source. On the other hand, it may very well be that a spinster daughter of the freedom fighter has an independent income of her own, even if she does not have legal remedy as available to the widowed/divorced daughters from their matrimonial family.”

Quite remarkably, the Bench then holds that, “Since the aforesaid safeguard is already existing, the blanket exclusion of widowed/divorced daughters, including even those who do not have any personal income in lieu of maintenance or otherwise, is patently de hors Article 14 of the Constitution of India, which enshrines the guarantee of equality to all citizens. In the present case, the classification is worse than gender bias, since unmarried daughters have been included within the scheme but widowed/divorced daughters who stand on the same footing, having no independent source of income, have been excluded.”

Of course, the Bench then rightly states that, “Even going by the Succession Acts, daughters, irrespective of qualification, are entitled to the property of the deceased as heirs.”

Frankly speaking, the Bench then candidly concedes that, “Hence, the mere existence of a right in a statute book to get maintenance from the matrimonial family is not at all sufficient to meet the financial requirements of those widowed/divorced daughters who do not have any income.”

While setting the record straight, the Bench then adds that, “Having or not having income is undoubtedly an intelligible differential, which can easily be incorporated if widowed/divorced daughters are also brought within the purview of ‘unmarried’ daughters. Thus, as in the event an unmarried daughter who has no income is ineligible for the pension, widowed/divorced daughters stand on a similar footing as daughters of the deceased and shall not be eligible anyway if they have any independent source of income, which can very well be alimony or maintenance as well.”

In the same vein, the Bench then further adds that, “However, as far as daughters having no independent source of income are concerned, widowed/divorced daughters stand on an equal footing with a spinster daughter as heirs of the deceased freedom fighter. The marital status of all of them is “unmarried”. Thus, the criterion of exclusion of widowed/divorced daughters, as sought to be projected by respondent no.1, is untenable in the eye of law. As such, Clause 5.2.5 is patently violative of Article 14 of the Constitution of India, which ensures equality among people standing on the same footing, in the absence of reasonable classification or intelligible differentia.”

In light of what is stated above, the Bench then holds that, “In view of the above discussions, the preliminary point is decided by declaring Clause 5.2.5 of the Guidelines for Disbursement of Central Samman Pensions to be followed by Authorized Public Sector Banks, issued by the Ministry of Home Affairs, FFR Division vide Memo No.45/03/2014 – FF(P) ultra vires, being violative of Article 14 of the Constitution of India.

On a final note, the Bench then lays down that, “The expression “unmarried” as used in Clause 5.2.3 of the said Guidelines shall also include widowed/divorced daughters as eligible for the Sainik Samman Scheme-in-question, provided they satisfy the other test of having no independent source of income. Further orders on the merits of the writ petition shall be passed on the next returnable date.”

To conclude, the Single Judge Bench of Justice Sabyasachi Bhattacharya of Calcutta High Court has most commendably, most courageously and most convincingly held that freedom fighter’s widowed/divorced daughters having no income are entitled to his pension and their blanket exclusion violates Article 14 of the Constitution. Justice Sabyasachi while citing the relevant rules as also relevant case laws has forwarded convincing reasons for holding freedom fighter’s widows and divorced daughters having no income to be entitled to their husband and fathers pension as discussed above and so there is no reason as to why they be placed in blanket exclusion. Thus we see that the dice rolled in their favour ultimately as the judgment was pronounced most markedly by the Calcutta High Court as discussed above!

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Policy & Politics

Misleading the ingenuous: Advertising by influencers

The role of social media influencers is expanding at an unprecedented rate. Considering the large audience who are exposed to promotions by celebrities and influencers, it is essential that advertisements made by them comply with the provisions of the law. They should not be misleading and deceptive to impinge upon the rights of the consumer.

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It has been a longstanding practice for brands to engage in advertising using print media, broadcasting on televisions and nowadays, with the advent of technology, the internet has become a potent tactic for promoting a brand. Worldwide, brands have actively started collaborating with ‘social media influencers’ for marketing their products. Influencer advertising is amongst the latest trends of gaining publicity which is rapidly being adopted by all manufacturers, ranging from large-scale multinational producers to local businesses. Owing to the ongoing pandemic, usage of social media has increased manifold as people were homebound and in a constant search for entertainment. A large number of people took to Instagram and Facebook to launch their local businesses, while others started creating quality content. Generally speaking, an influencer is basically a person who influences others in their purchasing choices. The public starts looking up to social media influencers and basing their decisions on these influencers’ remarks, feedback, and experiences. A social media influencer builds up his/her reputation through active engagement with their accounts.

As digital marketing is becoming highly ubiquitous, it has become vital to regulate the same. More and more consumers are gaining access to advertisements on digital platforms. Opinions of the influencers regarding the products persuade or dissuade the consumers from purchasing that particular product. Therefore, in the interest of protecting the rights of the consumers, it is required that misleading advertisements or promotions are not made. A consumer has the right to be correctly informed about the quantity, quality and standard of products. In light of these considerations, the Advertising Standards Council of India (ASCI) has proposed to frame guidelines on influencer marketing to understand the peculiarities of these advertisements and the way consumers view them.

LAW GOVERNING ADVERTISEMENT AND ENDORSEMENTS BY INFLUENCERS

The Consumer Protection Act, 2019 (COPRA, 2019) is the foremost and prominent statute applicable to advertisements on various media platforms. This Act is one of a kind being the first legislation bringing within its ambit the representations made using electronic media or records. Advertisements by influencers and celebrities impact large masses; any deceptive endorsement can harm many consumers at a time. Under the COPRA 2019, a misleading advertisement has been explicitly defined as an advertisement falsely describing the product or service or misinforms the consumers regarding the nature, substance, quantity or quality of such product or service. Rendering misleading representations as to the ‘quality, quantity, grade, composition, style or model’ of goods and services is an unfair trade practice that is punishable under the Act. If an influencer intentionally deceives persons by lying about the product’s usefulness and viability, a consumer motivated by such advertisement can make a complaint against such unfair trade practices. Under Section 89 of the COPRA, 2019, the penalty for making misleading advertisements that are prejudicial to the consumers’ interest is imprisonment for a term extending up to two years and a fine, extending to ten lakh rupees. In case of a subsequent offence, such a person shall be punished with imprisonment for a term that may extend to five years and a fine, extending to fifty lakh rupees.

In addition to the Act of 2019, the Ministry of Consumer Affairs notified draft guidelines titled the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020. Under these guidelines, an endorser of a product or service must mandatorily observe due diligence concerning the representations made by her/him. The endorser must ascertain that their endorsement does not convey any express or implied representations that would be false, misleading or deceptive. Furthermore, the standard of due diligence has also been provided in the guidelines as taking advice from an advertising self-regulatory organisation or a legal opinion from an independent legal practitioner regarding the honesty of statements in their endorsement and its compliance guidelines. The provisions of the Consumer Protection Act, 2019 shall apply for any violation of the provisions of these guidelines.

The Advertising Standards Council of India (ASCI) has framed a Self-regulatory Code prescribing the rules for advertisements in India. The Ministry of Information and Broadcasting has recognised these rules under the Cable television network Rules. The Code lays down a series of rules and regulations to ensure the authenticity of the advertisement content.

The role of social media influencers is expanding at an unprecedented rate. Considering the large audience who are exposed to promotions by celebrities and influencers, it is essential that advertisements made by them comply with the provisions of the law. They should not be misleading and deceptive to impinge upon the rights of the consumer.

In Marico Limited v. Abhijeet Bhansali, the Bombay High Court granted an interim injunction order against the Defendant, a Youtuber by the name ‘bearded chokra’ stating that he committed a ‘targeted attack’ towards the product of the respondent, namely Parachute Coconut Oil. It was alleged that the respondent made scathing reviews of the product, remarking it to smell like a rotten coconut and causing damage to his hair, which severely influenced the reputation of the product. Bhansali contended that it was an honest opinion and that mere viewing of his video does not mean that the viewers were swayed to not buy the product. The Court held that the respondent made the video to increase his viewership and thus falls under the ‘nascent category’ of social media influencers. The Court observed that social media influencers wield great power to influence minds. “With power also comes responsibility. I do not believe that a social media influencer can deliver statements with the same impunity available to an ordinary person. Such a person bears a higher burden to ensure there is a degree of truthfulness in his statements. A social media influencer is not only aware of the impact of his statement but also makes a purposeful attempt to spread his opinion to society / the public. In view of the same, the Defendant had a higher responsibility to ensure that his statements do not mislead the public and that he is disseminating correct information. The Defendant’s recklessness has a much greater impact on the Plaintiffs / its product’s reputation as compared to a reckless statement by an ordinary individual.”

However, a Division Bench of Bombay High Court lifted the injunction granted by the Single Judge and allowed Bhansali to post the video subject to removal and alteration of certain parts of the video demarcated by the Court.

ASCI DRAFT GUIDELINES FOR INFLUENCER ADVERTISING ON DIGITAL MEDIA

The ASCI is a voluntary self-regulatory organization seeking to ensure that advertisements conform to its Code. It seeks to ensure that all advertising material is truthful, legal, honest, decent, does not objectify women, safe for consumers and fair to their competitors. It seeks to maintain and enhance consumer’s interest and confidence in advertising. ASCI review all sort of complaints related to advertising under the category media including TV, SMS, Print, Internet, brochures, etc. In the light of growing promotions and endorsements by influencers on digital media, the ASCI formulated draft guidelines for influencer advertising on digital media (hereinafter referred to as guidelines) for consultation by stakeholders in February 2021.

The guidelines have been drafted considering the need to enable consumers to differentiate between promotions made to influence their opinion or commercial gain. The consumers may view several promotions and be influenced by them, not realising whether they are genuine opinions of the influencers or paid collaborations. This is inherently misleading and amounts to unfair trade practice. The guidelines apply to advertisements across all digital media platforms, including internet, mobile broadcast, digital TV etc.

KEY FEATURES OF THE GUIDELINES INCLUDE

Definition of advertisements as ‘a paid-for communication, addressed to the public or a section of it, the purpose of which is to influence the opinions and/or behaviour of those to whom it is addressed.’

An influencer is defined to be a person ‘who has access to an audience and the power to affect their purchasing decisions or opinions about any product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience.’

The guidelines require the influencer, publishing account or the advertiser to make a disclosure clarifying that particular promotion is an advertisement such that an average consumer must be able to recognise it as an advertisement without clicking or otherwise interacting with it. The disclosure must be clear, unambiguous and obvious.

Disclosures have to be made from amongst the labels prescribed by the ASCI. These include #ad, #collab, #promo, #sponsored or #partnership. Only permitted disclosure labels will be considered sufficient disclosure since consumers may not be familiar with various creative ways in which advertisers and influencers may signify that the said communication is an advertisement.

Advertisements must be obviously differentiable by an average consumer from editorial and independent user-generated content to prevent the audience from confusing between them.

The disclosure label needs to be placed so that it is evident, clear and prominent. The user must not have to click or scroll to find the label; it must be mentioned within the first two lines. The disclosure label should also be compatible with all devices or platforms. The disclosure label has to be in English or translated into the language understood by the average consumer viewing the advertisement.

If an advertisement is posted on Instagram stories or Snapchat, the label should be imposed. Different durations have been provided for which the disclosure should be visible to the consumer in the case of video advertisements without any accompanying text.

The influencers should do their due diligence about any technical or performance claims made by them. Evidence of due diligence would include correspondence with the advertiser or brand owner confirming that the specific claim made in the advertisement is capable of scientific substantiation.

In case of a violation of these guidelines, the ASCI will have the authority to take action. It can issue notice to the brand owner and influencer upon a complaint made by a consumer or suo motu cognisance of a potentially objectionable advertisement.

Feedback and suggestions on these draft guidelines have been taken from the stakeholders, and the ASCI will shortly release the final guidelines.

CONCLUSION

In the backdrop of the growing influence and reach of these influencer marketing on digital media platforms, there is a crucial need for regulating these advertisements in the interest of consumers. It is a consumer’s right to be informed of the actual quantity and quality of the product or service. As a natural corollary, the consumer must also be able to differentiate between genuine opinions of the influencers and the promotions done for monetary gain.

This will enable the consumer to make a more informed and well-rounded decision. The guidelines are being viewed as a step in the right direction. These guidelines will bring in more transparency and responsibility on the part of the influencers endorsing brands. This will also strengthen the trust of consumers in the influencers as well as the brands. The influencers will now have to be more mindful before making representations and ensure authenticity.

In addition to the Act of 2019, the Ministry of Consumer Affairs notified draft guidelines titled the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020. Under these guidelines, an endorser of a product or service must mandatorily observe due diligence concerning the representations made by her/him. The endorser must ascertain that his/her endorsement does not convey any express or implied representations that would be false, misleading or deceptive.

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Policy & Politics

Misleading the ingenuous: Advertising by influencers

The role of social media influencers is expanding at an unprecedented rate. Considering the large audience who are exposed to promotions by celebrities and influencers, it is essential that advertisements made by them comply with the provisions of the law. They should not be misleading and deceptive to impinge upon the rights of the consumer.

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It has been a longstanding practice for brands to engage in advertising using print media, broadcasting on televisions and nowadays, with the advent of technology, the internet has become a potent tactic for promoting a brand. Worldwide, brands have actively started collaborating with ‘social media influencers’ for marketing their products. Influencer advertising is amongst the latest trends of gaining publicity which is rapidly being adopted by all manufacturers, ranging from large-scale multinational producers to local businesses. Owing to the ongoing pandemic, usage of social media has increased manifold as people were homebound and in a constant search for entertainment. A large number of people took to Instagram and Facebook to launch their local businesses, while others started creating quality content. Generally speaking, an influencer is basically a person who influences others in their purchasing choices. The public starts looking up to social media influencers and basing their decisions on these influencers’ remarks, feedback, and experiences. A social media influencer builds up his/her reputation through active engagement with their accounts.

As digital marketing is becoming highly ubiquitous, it has become vital to regulate the same. More and more consumers are gaining access to advertisements on digital platforms. Opinions of the influencers regarding the products persuade or dissuade the consumers from purchasing that particular product. Therefore, in the interest of protecting the rights of the consumers, it is required that misleading advertisements or promotions are not made. A consumer has the right to be correctly informed about the quantity, quality and standard of products. In light of these considerations, the Advertising Standards Council of India (ASCI) has proposed to frame guidelines on influencer marketing to understand the peculiarities of these advertisements and the way consumers view them.

LAW GOVERNING ADVERTISEMENT AND ENDORSEMENTS BY INFLUENCERS

The Consumer Protection Act, 2019 (COPRA, 2019) is the foremost and prominent statute applicable to advertisements on various media platforms. This Act is one of a kind being the first legislation bringing within its ambit the representations made using electronic media or records. Advertisements by influencers and celebrities impact large masses; any deceptive endorsement can harm many consumers at a time. Under the COPRA 2019, a misleading advertisement has been explicitly defined as an advertisement falsely describing the product or service or misinforms the consumers regarding the nature, substance, quantity or quality of such product or service. Rendering misleading representations as to the ‘quality, quantity, grade, composition, style or model’ of goods and services is an unfair trade practice that is punishable under the Act. If an influencer intentionally deceives persons by lying about the product’s usefulness and viability, a consumer motivated by such advertisement can make a complaint against such unfair trade practices. Under Section 89 of the COPRA, 2019, the penalty for making misleading advertisements that are prejudicial to the consumers’ interest is imprisonment for a term extending up to two years and a fine, extending to ten lakh rupees. In case of a subsequent offence, such a person shall be punished with imprisonment for a term that may extend to five years and a fine, extending to fifty lakh rupees.

In addition to the Act of 2019, the Ministry of Consumer Affairs notified draft guidelines titled the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020. Under these guidelines, an endorser of a product or service must mandatorily observe due diligence concerning the representations made by her/him. The endorser must ascertain that their endorsement does not convey any express or implied representations that would be false, misleading or deceptive. Furthermore, the standard of due diligence has also been provided in the guidelines as taking advice from an advertising self-regulatory organisation or a legal opinion from an independent legal practitioner regarding the honesty of statements in their endorsement and its compliance guidelines. The provisions of the Consumer Protection Act, 2019 shall apply for any violation of the provisions of these guidelines.

The Advertising Standards Council of India (ASCI) has framed a Self-regulatory Code prescribing the rules for advertisements in India. The Ministry of Information and Broadcasting has recognised these rules under the Cable television network Rules. The Code lays down a series of rules and regulations to ensure the authenticity of the advertisement content.

The role of social media influencers is expanding at an unprecedented rate. Considering the large audience who are exposed to promotions by celebrities and influencers, it is essential that advertisements made by them comply with the provisions of the law. They should not be misleading and deceptive to impinge upon the rights of the consumer.

In Marico Limited v. Abhijeet Bhansali, the Bombay High Court granted an interim injunction order against the Defendant, a Youtuber by the name ‘bearded chokra’ stating that he committed a ‘targeted attack’ towards the product of the respondent, namely Parachute Coconut Oil. It was alleged that the respondent made scathing reviews of the product, remarking it to smell like a rotten coconut and causing damage to his hair, which severely influenced the reputation of the product. Bhansali contended that it was an honest opinion and that mere viewing of his video does not mean that the viewers were swayed to not buy the product. The Court held that the respondent made the video to increase his viewership and thus falls under the ‘nascent category’ of social media influencers. The Court observed that social media influencers wield great power to influence minds. “With power also comes responsibility. I do not believe that a social media influencer can deliver statements with the same impunity available to an ordinary person. Such a person bears a higher burden to ensure there is a degree of truthfulness in his statements. A social media influencer is not only aware of the impact of his statement but also makes a purposeful attempt to spread his opinion to society / the public. In view of the same, the Defendant had a higher responsibility to ensure that his statements do not mislead the public and that he is disseminating correct information. The Defendant’s recklessness has a much greater impact on the Plaintiffs / its product’s reputation as compared to a reckless statement by an ordinary individual.”

However, a Division Bench of Bombay High Court lifted the injunction granted by the Single Judge and allowed Bhansali to post the video subject to removal and alteration of certain parts of the video demarcated by the Court.

ASCI DRAFT GUIDELINES FOR INFLUENCER ADVERTISING ON DIGITAL MEDIA

The ASCI is a voluntary self-regulatory organization seeking to ensure that advertisements conform to its Code. It seeks to ensure that all advertising material is truthful, legal, honest, decent, does not objectify women, safe for consumers and fair to their competitors. It seeks to maintain and enhance consumer’s interest and confidence in advertising. ASCI review all sort of complaints related to advertising under the category media including TV, SMS, Print, Internet, brochures, etc. In the light of growing promotions and endorsements by influencers on digital media, the ASCI formulated draft guidelines for influencer advertising on digital media (hereinafter referred to as guidelines) for consultation by stakeholders in February 2021.

The guidelines have been drafted considering the need to enable consumers to differentiate between promotions made to influence their opinion or commercial gain. The consumers may view several promotions and be influenced by them, not realising whether they are genuine opinions of the influencers or paid collaborations. This is inherently misleading and amounts to unfair trade practice. The guidelines apply to advertisements across all digital media platforms, including internet, mobile broadcast, digital TV etc.

KEY FEATURES OF THE GUIDELINES INCLUDE

Definition of advertisements as ‘a paid-for communication, addressed to the public or a section of it, the purpose of which is to influence the opinions and/or behaviour of those to whom it is addressed.’

An influencer is defined to be a person ‘who has access to an audience and the power to affect their purchasing decisions or opinions about any product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience.’

The guidelines require the influencer, publishing account or the advertiser to make a disclosure clarifying that particular promotion is an advertisement such that an average consumer must be able to recognise it as an advertisement without clicking or otherwise interacting with it. The disclosure must be clear, unambiguous and obvious.

Disclosures have to be made from amongst the labels prescribed by the ASCI. These include #ad, #collab, #promo, #sponsored or #partnership. Only permitted disclosure labels will be considered sufficient disclosure since consumers may not be familiar with various creative ways in which advertisers and influencers may signify that the said communication is an advertisement.

Advertisements must be obviously differentiable by an average consumer from editorial and independent user-generated content to prevent the audience from confusing between them.

The disclosure label needs to be placed so that it is evident, clear and prominent. The user must not have to click or scroll to find the label; it must be mentioned within the first two lines. The disclosure label should also be compatible with all devices or platforms. The disclosure label has to be in English or translated into the language understood by the average consumer viewing the advertisement.

If an advertisement is posted on Instagram stories or Snapchat, the label should be imposed. Different durations have been provided for which the disclosure should be visible to the consumer in the case of video advertisements without any accompanying text.

The influencers should do their due diligence about any technical or performance claims made by them. Evidence of due diligence would include correspondence with the advertiser or brand owner confirming that the specific claim made in the advertisement is capable of scientific substantiation.

In case of a violation of these guidelines, the ASCI will have the authority to take action. It can issue notice to the brand owner and influencer upon a complaint made by a consumer or suo motu cognisance of a potentially objectionable advertisement.

Feedback and suggestions on these draft guidelines have been taken from the stakeholders, and the ASCI will shortly release the final guidelines.

CONCLUSION

In the backdrop of the growing influence and reach of these influencer marketing on digital media platforms, there is a crucial need for regulating these advertisements in the interest of consumers. It is a consumer’s right to be informed of the actual quantity and quality of the product or service. As a natural corollary, the consumer must also be able to differentiate between genuine opinions of the influencers and the promotions done for monetary gain.

This will enable the consumer to make a more informed and well-rounded decision. The guidelines are being viewed as a step in the right direction. These guidelines will bring in more transparency and responsibility on the part of the influencers endorsing brands. This will also strengthen the trust of consumers in the influencers as well as the brands. The influencers will now have to be more mindful before making representations and ensure authenticity.

In addition to the Act of 2019, the Ministry of Consumer Affairs notified draft guidelines titled the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020. Under these guidelines, an endorser of a product or service must mandatorily observe due diligence concerning the representations made by her/him. The endorser must ascertain that his/her endorsement does not convey any express or implied representations that would be false, misleading or deceptive.

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Policy & Politics

Making it happen: Balance between solar and thermal energy

Anil Swarup

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Focus on the Green Energy Sector is extremely laudable and India appears to be is on its way to achieving its target of 100 GW of solar energy by 2022. Other latest developments in the Sector have also been very encouraging. Tariffs of solar energy have plummeted to Rs 1.99 per unit from the high of INR 14 per unit a few years ago. The overall energy sector is under stress but the demand for solar energy seems to be on the rise. However, to say that renewable energy has already become cheaper than coal-based thermal energy, as Rahul Tongia from Brookings India put it, “masks…system-level costs as well as the disproportionate impact (it had) on selected States’ generators and stakeholders”. Accordingly, before blowing the victory bugle there is a critical need to examine the implications of what was happening.

What are the direct and indirect costs incurred due to shifting of focus on renewable energy?

Who is bearing this cost?

Is the manner in which renewable energy mission was being rolled out in the country sustainable?

As Coal Secretary, Government of India, I was convinced that solar energy would play the most prominent role in the push for green energy. Not only did it have a larger share of India’s targets, but it also represented much of the growth of renewable energy. It was in the fitness of things that the government was pushing for solar energy.

However, I was (still am) against the mad rush for solar energy without taking into account all the associated features. There is indeed a dilemma as any reservation or difference of opinion against this mad rush is also deemed an ‘opposition’.

There is no doubt about the fact that India is a ‘sun-rich’ country with bright sunshine available for the better part of the year. However, I am equally convinced that there would still be issues that need to be considered and sustainable solutions to those needed to be developed as we proceeded towards increasing our dependence on solar energy.

Sunlight, by nature’s law, is available only during the day. Unlike the European countries that were pushing for green energy, the peak demand in India is during the evening when solar energy (unless stored) is not available. Storage and the cost thereof therefore would be key determinants for the sustainability of solar energy, especially as its share scaled. Hydropower generation has been a good complement and India always had enormous potential. However, unfortunately, this potential has not been tapped, ironically on account of environmental considerations. (The recent cloud-burst in Garwhal region and the consequent flash floods have made the task even more difficult.) The ongoing projects, like the one at Subhanshree in Assam, have languished and the delays have led to cost escalation that have perhaps made the project unviable. India even lags in the deployment of pumped hydro capacity, the most proven and cost-effective large-scale storage technology available then.

The first step for higher solar usage is improving predictions. However, even perfect predictions can only go so far. We know monsoons reduce the output, and also sunsets. India needed to step up its game for learning to balance variable renewables as other countries have done. But we lack some tools to do so, such as flexible markets and dynamic pricing – most power is sold via static Power Purchase Agreements (PPAs).

The highest Plant Load Factor (PLF) for solar power plants is considered to be only about 20%, and many rooftops accounted for even less. Meaning thereby that the 100 GW installed capacity is only equivalent to 33 GW of thermal power (assuming it had thrice the PLF, of, say, 60%). Solar energy can produce nearly 100 GW only for a short while during the middle of the day.

Going forward, price ‘grid parity’ would be another issue that will have to be resolved. To meet peak demand in the evening, some other source of power will need to be built. Similarly, when solar power is available (typically during the day), some other power source has to back down. Both have a cost. And someone would have to bear the cost.

Rooftop solar plants sound exciting but would sound the death knell for the power distribution companies, who risk losing their best customers. These small localised solar plants will use the conventional power grid like a battery as these solar plants can generate energy only when the sun is shining. The ‘net metering’ would have enabled them to push power into the grid when the requirement is relatively low and there is ‘surplus’ power. This could lead to what has been termed as ‘utility death spiral’. There are also other issues related to setting up of solar plants as well as financing those. However, everyone seems to be rushing in. But there is some resistance from States as well as the distribution companies.

Does solar equipment perform as envisaged? There have been known issues related to the maintenance of solar panels, especially in the context of dust and pollution. The quality of solar panels manufactured on a mass scale are already causing problems. Land costs, availability, and bankability are also growing concerns, especially as India looks at scaling its share of solar energy. It’s important in this context to take into account the fact that the demand of 175 GW is projected for 2022 only. It will inevitably grow in future. Moreover, the cost of delivering solar energy is more than its generation cost. The transmission cost at 20% PLF will have to be factored in while arriving at the actual cost of shifting to solar energy.

What has been the response to these challenges? Yes, there is an enormous amount of research taking place in the western world and in China to find the ‘storage’ solution that is critical to the sustainability of this ‘solar drive’. The rest of the world is waiting with bated breath as the power of solar energy is being unleashed.

However, not many seem to be bothered about the adverse impact this undue adulation of solar energy is causing to the coal-based power plants that account for most of the energy requirements of the country. The generation companies (Gencos) are already in trouble on account of a shortage of coal and growth in demand not good enough to service investments made. It was estimated that more than INR 1.7 lakh crore of capacity could become non-performing asset (NPA). These Gencos are being pushed further by the ever-increasing coal cess, statutory ‘back-down’ to accommodate renewal energy and competition with a subsidised sector.

Green energy is the way forward but it is not likely to end the need for coal-based thermal plants in India. Not at least in an overnight manner. Hence, it would not be advisable to promote it at the cost of pushing thermal power plants to become unviable. The two have to co-exist and supplement each other, at least for the time being. The dependence on coal-based thermal power plants will gradually need to be phased out over the next couple of decades.

Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Offic. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.

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