The recent series of events occurred at Line of Actual Control in eastern Ladakh between Indian and PLA troops has created outrage against the autocratic regime of China and its expansionist spree. People have started self-boycotting possible products of China and nationwide protests have taken place. The government also banned 59 Chinese online applications with huge user base & popularity. But can we afford to boycott without quality alternatives? We should be realistic and sincerely work upon issues & Challenges faced by our Industrialists, Entrepreneurs & Service industry. Manufacture in China and sell it in India is the new trend because we have failed to build up the eco system for Research & Development and innovation in the country. Investing in R&D is assumed to be a waste. We could not develop a single indigenous product in the software industry with a global brand value like Apple, Google, Facebook, twitter though we have the best IT companies and brains in the country. We have copied their products like Flipkart from Amazon, Ola or Uber, etc. We need to understand the challenges and try to improvise and innovate at the earliest.
China has emerged as a manufacturing superpower in last decades. World could not realise how they got enslaved with cheap and bulk items with value for money. They have products for each pocket both in quality and price. Today China controls major items sold by top brands on likes of Apple, Sony etc. Each electronic device manufactured in world has a part manufactured in China. China’s cheap labour and speedy execution of projects made it numero uno of manufacturing world.
Post Covid-19 world is anti-China, thanks to Wuhan virus. It has demonised China and its approach to human life, values, ethics and work culture. The world is searching for options where it can have goods with quality, competitive price and timely delivery. Over 300 foreign companies have decided to shut their manufacturing units in China and move to safe and better place. Japan declared two billion $ relief package for companies to shift from china.
India is placed better to address the situation and grab this opportunity. We have cheap labour compared to the rest of the world except China, Vietnam or Bangladesh. We have better infrastructure now. We have a democratically elected government committed for growth and welfare of people. Whereas what dictatorship can lead to can be witnessed in China. No human rights, no transparency, massive corruption, uncertainty in policies and hostile conditions.
If we evaluate pro and cons of Indian business environment in an objective manner, our weaknesses and strong points as compared to China. We already discussed democracy and human right index is well above in India compared to China. Civil rights are enjoyed to the maximum or we can say at times it’s been abused. Censorship on the media and other communication means there is almost no transparency. The recent corona pandemic is evident how China risked humankind by hiding coronavirus. There is no concrete information about actual number of deaths by coronavirus in China. Had there been free media thousands of lives and huge resources could have been saved.
The areas which needs to be addressed immediately:
1. Policies are still not fully business friendly
2. Corruption in middle and lower rungs of bureaucracy
3. Slow processes of decision making, implementation and communication
4. Absence of long-term policies [policies may change with the change of a government]
5. Politics in business related decisions. [Location of new plant, political pressure for jobs etc]
6. Specialised Banks for each sector
We don’t have industryfriendly policies which can inspire new entrepreneur and industrialist to venture in to large scale production facilities as the market is still controlled by few business houses. They kill each opportunity for the MSME to emerge big. Intensive focus needed to mitigate challenges faced by the MSME industry. Draconian laws of British era still exist in Indian regulatory system, Environmental laws, Land acquisition and conversion of land for industrial purpose is biggest source of corruption and major road block in development. Files take month and years to be cleared despite capitation money being paid to officials at each Collectorate or revenue department. Digital mapping of land and its conversion should be done online. Alternatively, Centre or state governments themselves should identify land parcels in advance, purchase them from farmers or other sellers, obtain necessary clearances, build infrastructure [like roads, power and water lines] and keep them ready for sale. In any case for so many business-like electronics, IT, Argo products, environment and forest clearances are unnecessary. It takes years for approval and promoter starts losing interest on the project even before project gets off the ground. This is because bank loan starts accumulating interest on it.
South Korean steel giant POSCO waited for so many years to set up its steel plant and has finally walked away because of such delays.
Bureaucracy is biggest hurdle in development as the decision taken at highest level fails to get implemented at ground. For example, in recent corona pandemic, govt of India has decided to reduce performance security deposit up to remaining project cost but it has not been passed on to agencies by departments, contractors are suffering serious financial crunches.
In short, policies should be well thought out and must be for long term, should not be influenced by changes in the government or ministry or officials. Polices should be such that there are no scopes for corruption or delays.
Though an autocratic regime is believed to be more corrupt, in china the corruption is limited to the top rungs of Chinese Communist Party only. Autocracy helps them in implementation of policies and projects in real-time. Fear of being severely punished works well with such way of governance. Contrary to this India has seen a non-corrupt regime at Centre in last 6 years. But mid and lower level is still the same, its big roadblock to policies and programs of the government. For example, Banks are told to lend to SME, MSME sectors to support it to revive. But banks are hell-bent on not doing it. They follow same old line of no work is better than to be held accountable. They fear of being booked by ED or CBI for any wrong lending. PSU bank and government enforcement agencies must understand that they are also doing business and some cases resulting in NPA doesn’t necessarily mean corruption.
One classic example is Dholera special investment region (SIR), the brainchild and dream project of PM Modi. A huge 72 square kilometre area has been developed with worldclass infrastructure near Ahmadabad out of the proposed total area of 920 Square kilometres. It was conceived when PM Modi was CM of Gujarat, over 6 years since he became Prime minister but not a single industry has moved in. A sum of over Rs 5,000 crore already spent on development so far. It’s time to invite those 300 companies moving out of china to Dholera SIR. They can start manufacturing within a year with ready to move infrastructure in place.
Present Modi government has been talking about so called “Plug and Play model” for new business, Dholera SIR is ideal location to execute this Plug and Play model.
The lower and mid-segment of government must show accountability towards timely implementation of the government schemes from time to time. Technology can play a big role to settle this issue. As the world is making new norms post Covid work culture, we should focus on online meetings for quick approvals, disbursements of disputes if any. Unnecessary movement of physical applications and paperwork should be avoided. The human interface only can reduce corruption and speed up the work.
Specialised banks for each sector
The rapid growth of china is largely attributed to planning of finances to new enterprises. China has separate bank for each business sector like Industrial bank of China is for industryspecific. Agricultural Bank of China is for agro-business only. Infrastructure bank of china is for infra projects lending. This makes the officials expert in their respective field and easy to understand customer needs. In India, all our private or public sector banks are doing all the businesses and they don’t have expertise in any specific business. They struggle to learn new type of project or consumer demand comes to them. We have our own ILFS or NABARD or NBFCs but they too are mired in red tape and corruption. We should improve and upgrade work culture of these lending institutions to make them more business friendly. Large PSBs should have “desks” or single widow systems for specific businesses.
Presently our yearly imports from China are about Rs 5 lakh crore. Bulk of them comprise of following segments
2. Telecom equipment
3. Organic & Inorganic chemicals, intermediates, bulk drugs, agro chemicals, dyes etc
4. Textiles [including manmade fibres and yarns]
5. Air conditioners & Refrigeration equipment
6. Automobile batteries
Government must approach concerned trade bodies for above businesses to seek implementable solutions from them to replace these imports in time bound manner. Most of the items mentioned above are already being made in India. Some of them can be imported from other countries for time being [Refer case of Hero Motor Cycles, they cancelled their orders worth Rs 700 crore from China for auto components and planning to buy with little higher price from Germany but will eventually make them in India].
In short term our objective should be to meet domestic demands for these products. While doing this, we can address issues of quality and prices. This will enable us to globally compete China and should focus on “suppliers of first choice” because of antiChina environment across the world.
We are able to produce best of engineers and managers for the global businesses. Time is ripe for us to harness this talent to counter this Chinese challenge.
* Encourage all government departments dealing in revenue, environment, and pollution control to go digital and online to speed up the process, transparency, avoid harassment to industrialists.
* MSME sector must get close attention of Top decision-makers. They are backbone of economy and employment. About 50% of export earnings are from MSME sectors also employs 55% of our work force. While political leadership has realised importance of this sector, bureaucracy is yet to respond positively to this critical sector.
* One nation one tariff for electricity. It varies from Rs 2.5-7.00 per unit.
* The manufacturer is confused, by the time they start production with pre-existing benefits announced by the incumbent government, the government changes and new policies come to force. They should have a protection pact for a minimum of 25 years.
* People should be encouraged to establish units in their own locality/ state and must be given incentives for such initiatives.
* Consumption of goods made locally should be encouraged. Such goods are bound to be cheaper as they don’t involve storage and transportation costs.
* Bank lending must be done easily with lower collateral security & rate of interest to encourage new entrepreneurs & should be on top priority.
Any business decision involving huge capital outlay will be taken with prime consideration for the risks involved in safeguarding the capital deployed. This can be assured only with consistent long-term policies, political stability, rule of law, corruption free administration, efficient funding institutions and availability of skilled manpower. All these areas need to be addressed by political leadership. Beginning has already been made. China has provided us with the impetus to move ahead quickly in all these spheres.
Gopal Goswami is research scholar.
The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.
For the latest news Download The Daily Guardian App.
Where did the farm laws go wrong?
The three new agriculture laws implemented by India in September 2020 with little public or legislative debate have piqued the world’s curiosity. The initiatives were portrayed as a gift to farmers by Prime Minister Narendra Modi’s government, but farmers in various Indian states, headed by smallholders in Punjab and Haryana, have refused to accept them.The three laws are:
• The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act,
• The Essential Commodities (Amendment) Act and
• The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act.
The court stated that dozens of rounds of negotiation between the Centre and farmers had yielded no breakthroughs, despite the fact that senior individuals, women, and children among the protestors were exposed to major health risks caused by the cold and COVID-19. It was stated that deaths had already happened, not as a result of violence, but as a result of illness or suicide. The court praised the protesters’ nonviolent character and indicated that it did not intend to stop them.Essentially, in the midst of a pandemic, with a critical vaccination drive underway, the government appears to be employing a two-pronged strategy to break the impasse: reaching out to farmers to bridge the trust deficit in farm laws, and combating disruptive forces that are attempting to take advantage of the situation.
Farmers are concerned that agriculture sector changes would result in the abolition of the minimum support price (MSP) system and the abolition of APMC markets. The government buys farm commodities at a fixed price under the MSP framework. The MSP guarantees that farmers are guaranteed a set price, regardless of supply and demand limits. Farmers have been calling for legislation to ensure that agricultural food is purchased at the MSP. They also urge the government to repeal the Electricity Act modifications.Farmers are concerned that it would lead to the corporatization of agriculture, which will eventually force them out of the industry. They contend that the sale of agricultural produce would be governed by contracts, rendering the MSP regime ineffectual. The law permitted farmers to engage into a direct arrangement with the buyer before to the sowing season and sell their goods at the agreed-upon price at the time of contract signing.
What were the main issues in THE FARMER’S PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) ACT, 2020 OR THE FPTC ACT as regarded by the farmers?
Though farmers objected to all three agricultural laws, the main issue was this Act, commonly known as the ‘APMC Bypass Bill.’ Cultivators were concerned that its provisions would undermine the APMC mandis.
Sections 3 and 4 of the Act permitted farmers to sell their goods in regions beyond the APMC mandis to purchasers from inside or outside the state. Section 6 barred the collection of any market charge or cess under any state APMC Act or other state law in connection with trading outside the APMC market. Section 14 overruled the contradictory sections of the state APMC laws, while Section 17 enabled the Centre to make regulations for enforcing the law’s provisions.
Farmers were concerned that the new laws would result in insufficient demand for their goods in local marketplaces. They said that moving the produce outside of mandis would be impossible due to a lack of resources. This is why they sell their goods at prices lower than MSP in local marketplaces.
Farmers were also upset with the provisions in Section 8 of the law that stated that a farmer or merchant might approach the Sub-Divisional Magistrate (SDM) to reach an agreement through conciliation procedures. While farmers claim they lack the right to enter SDM offices for conflict resolution, others say this amounts to seizure of judicial authorities.
POSSIBLE ISSUES WITH FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT OF PRICE ASSURANCE AND FARM SERVICES ACT, 2020
Sections 3-12 of the statute attempted to provide a legal framework for contract farming. Before the planting season, farmers might get into a direct arrangement with a buyer to sell their products at predetermined pricing. It enabled farmers and sponsors to enter into agricultural partnerships. The law, however, made no mention of the MSP that purchasers must provide to farmers.
Though the Centre claimed that the law was intended to liberate farmers by allowing them to sell anywhere, farmers were concerned that it would lead to the corporatisation of agriculture. They were also concerned that the MSP will be eliminated. Critics also claimed that the contract system would expose small and marginal farmers to exploitation by large corporations unless selling prices were continued to be regulated as they were before to the new law’s implementation.
HOW DID THE FARMERS REACT TO THE FARM BILL?
Despite the potential benefits, both parties were unable to reach an agreement on the farm laws, which resulted in their repeal. Farmers who have been protesting at Delhi’s borders and in their states since last year have rejected the Central government’s offers to alter the contentious new agriculture rules. They said that the plan was insufficient and accused the administration of being “insincere,” while also warning the Parliament to step up their protests. Parliament approved these Acts during the monsoon session in 2020. Farmers have long feared that the Centre’s farm reforms will pave the way for the demise of the MSP system, leaving them at the whim of large corporations. However, no resolution was reached, and no date for the next round of discussions was set for the first time. Following the failure of these discussions, the Supreme Court suspended the execution of these farm legislation. Farmers were overjoyed when these rules were removed on November 19, 2021.
Declaring vaccination mandatory in India: A last resort towards battling Covid-19
With the spread of novel coronavirus (COVID-19) across the globe, there is hardly any country which has been able to protect its citizens from it. During this unprecedented situation which has persisted more than a year, this pandemic has claimed as many as 3.18 lakh lives in India itself, making the situation abysmal and chaotic in the country. But a silver lining arose on January 03rd, 2021, when the Government of India approved emergency authorization for Covishield and Covaxin for effectively tackling the pandemic situation.
Till date, around 160 crore people have been vaccinated out of which around 4.24 crore have been fully vaccinated. As can be evidently seen, India’s COVID-19 vaccination drive is alarmingly behind schedule, especially when India is facing an unforeseen situation and it is the need of the hour to rustle up the vaccination drive. Indubitably, the government has miserably failed in procuring vaccines leading to an inordinate delay in inoculating people. One of the reasons behind such a delay is an acute shortage of supply of vaccines from the manufacturers. But there is another hidden but known facet which has conspicuously reduced the percentage of vaccinated population despite vaccines being available at local vaccination centers. Suspicions and myths pertaining to vaccines in general are creating mistrust among people, especially for those residing in rural or marginalized areas, who are very skeptical about getting inoculated. Due to such fear and apprehension, people are not registering for vaccination and even after scheduling an appointment, they are not turning up for vaccination at the centers leading to wastage of thousands of doses raising a cause for concern in the entire country.
First and foremost step to be taken by the government is to initiate an awareness drive throughout the country by educating the people residing especially in rural and marginalized areas about the various personal and community health benefits of getting vaccinated. However, in case there is timely and unhindered supply of vaccines and yet people refuse to take it then the government must promulgate laws making vaccination compulsory in the nation. Although, it is not always necessary to go through the trouble of making vaccination compulsory but it should only be kept as a last resort to tackle the problem. It is well within the legislative powers of the State Legislature to enact such a law related to public health and sanitation. (vide Entry 6 List-II of the Seventh Schedule of the Constitution on India). Here, a focus needs to be drawn to a similar step taken by the British Government to make smallpox vaccination compulsory by way of the Vaccination Act of 1892. Another example was laid down by the US Supreme Court which upheld the law made by the State for compulsory vaccination stating that is well with its police power for the protection of public health.
LAWS EMPOWERING THE GOVERNMENT TO MAKE VACCINATION MANDATORY
The Epidemic Disease Act of 1897 contains provisions empowering the government to take whatever measures it deems necessary to prevent the outbreak or spread of an epidemic disease, provided the existing laws are not sufficient to deal with the situation. Moreover, a collective reading of numerous provisions of the National Disaster Management Act of 2005 shows that the Central Government is empowered to constitute a National Disaster Management Authority which can lay down the policies, plans and guidelines for disaster management for ensuring timely and effective response to a disaster. The Central Government has invoked its power under Section 6 (2)(i) of the Disaster Management Act, 2005 directing the State Governments to restrict the movement of people and various other activities in the beginning of the pandemic and those can be applied for the process of vaccination too. Under such laws, the government can formulate policies for compulsory vaccination during the current unprecedented situation in India.
ENFORCING MANDATORY VACCINATION
It is certainly not advisable to impose penal action like imprisonment against an individual who refuses to get inoculated. There are several ways through which the government can enforce mandatory vaccination on such individuals. For instance, it can impose fine on people who refuse vaccination. Another way can be by imposing a reasonable restriction on the movement of an individual within any part of this country since the freedom to move freely within the territory in India is subject to reasonable restrictions as laid down under Article 19(5) of the Constitution of India. Moreover, for the people who are visiting India, vaccination must be compulsory upon failure of which can lead to restricting the use of their passport by the Government by exercising its powers under the Passport Act, 1967. Alternatively, if a person still refuses to get vaccinated upon his arrival in India, he shall be mandatorily kept under 7 days institutional quarantine as per the guidelines for international arrival issued by the Ministry of Health and Family Welfare (MoHFW). Moreover, for foreigners who are not vaccinated, the government can pass an order under Section 3 (2) (e) of the Foreigners Act, 1946. For example, people applying for immigration to the United States need to show their vaccination certificates. Otherwise the applicant must be given those vaccines at the time of medical exam.
Making COVID-19 vaccination mandatory for people can have some serious legal concerns. A person can claim that the legislation making vaccination compulsory is violative of the right to privacy under Article 21 of the Constitution of India. The term privacy has been interpreted in its widest sense so as to restrict the government from infringing it by way of an unfair, unjust and unreasonable laws and regulations. But it is pivotal to argue that the right to privacy is embraced under the right to life and personal liberty which may be restricted according to the procedure established by law. Therefore, the right to privacy can very well be curtailed by the government by way of enacting just, fair and reasonable law which is in interest of public at large (vide K.S Puttaswamy v Union of India). Further in the case of Evara Foundation vs Union of India in the affidavit it was stated that “It is humbly submitted that the direction and guidelines released by Government of India and Ministry of Health and Family Welfare, do not envisage any forcible vaccination without obtaining consent of the concerned individual”.
At this juncture, it is also pertinent to give reference to Hohfeld’s theory of jural relations. As Hohfeld says, if a person has a right, then that right is accompanied by a duty to protect the rights of others. In other words, the people are guaranteed the right to privacy which can be restricted by making the vaccination compulsory for the people refusing to take the vaccination for collective public interest, since COVID-19 will continue to spread if people do not get vaccinated. For instance, if majority of the population in the Country is vaccinated then it will obviously break the chain of the spread of the virus and the positivity rate will come down.
Moreover, there are many developed countries across the world like U.K., Australia, France, Italy, who have made the vaccination mandatory for their citizens despite the fact it is not the last resort but it was the only way to break vicious cycle of waves of the virus. In addition, India is a developing country where the health care system is ineffective to cater the vast number of populations. So, India should also follow the footsteps of the developed countries in order to save the lives of its citizens.
In order to achieve herd immunity by vaccinating a large number of people either by way of voluntary vaccination or forced vaccination, equitable distribution of vaccines is a pre-requisite, failure of which can render the former otiose. There is an obligation on part of the government to ensure that there are no obstacles or impediments in providing vaccines all across the nation without any discrimination.
PIYUSH GOYAL CALLS UPON STARTUPS TO LEVERAGE ‘DEEP TECH’
Goyal says start ups to build solutions for local & global markets: AI, IoT, Big Data, etc.
The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, Piyush Goyal today called upon the Indian industry to aim for raising 75 unicorns in the 75 weeks to the 75th anniversary of Independence next year.
“We have added 43 unicorns added in 45 weeks, since the start of ‘Azadi ka Amrit Mahotsav’ on 12th March, 2021. Let us aim for atleast 75 unicorns in this 75 week period to 75thAnniversary of Independence,” he said, while releasing the NASSCOM Tech Start-up Report 2022.
Goyal said Startup India started a revolution six years ago and today ‘Startup’ has become a common household term. Indian Startups are fast becoming the champions of India Inc’s growth story, he added.
“India has now become the hallmark of a trailblazer & is leaving its mark on global startup landscape. Investments received by Indian startups overshadowed pre-pandemic highs. 2021 will be remembered as the year Indian start-ups delivered on their promise, – fearlessly chasing opportunities across verticals – Edtech, HealthTech & AgriTech amongst others,” he said.
Goyal lauded the ITES (Information Technology Enabled Services) industry including the Business Process Outsourcing (BPO) sector for the record Services exports during the last year. “Services Export for Apr-Dec 2021 reached more than $178 bn despite the Covid19 pandemic when the Travel, Hospitality & Tourism sectors were significantly down,” he said.
• “Let us aim for at least 75 unicorns in the 75 weeks to the 75th Anniversary of Independence”: Piyush Goyal
• Goyal lauds the ITES industry including the BPO sector for the record Services exports during the last year despite the pandemic
• Piyush Goyal says the PM’s interaction with Startups a week ago has supercharged our innovators
• The next “UPI moment” will be the ONDC (Open Network for Digital Commerce) – Goyal
• New India is today being led by new troika of Innovation, Technology & Entrepreneurship (ITE), ‘India at 100’ will be renowned as a Startup nation: Goyal
Subhas Chandra Bose statue to be installed in India Gate, announced PM Modi
Prime Minister Narendra Modi announced on Friday that a grand statue of iconic freedom fighter Netaji Subhas Chandra Bose will be installed at India Gate. This announcement came ahead of the 125th anniversary of Netaji Subhas Chandra Bose. Prime Minister Narendra Modi announced that his statue will be installed at India Gate to honor his contribution to the independence movement.
The Prime Minister further said that Bose’s grand statue will be made of granite and will be a symbol of India’s indebtedness to him. “Till the grand statue of Netaji Bose is completed, a hologram statue of his would be present at the same place. I will unveil the hologram statue on 23rd January, Netaji’s birth anniversary” PM Modi tweeted
“At a time when the entire nation is marking the 125th birth anniversary of Netaji Subhas Chandra Bose, I am glad to share that his grand statue, made of granite, will be installed at India Gate,” PM Modi tweeted on Friday. “This would be a symbol of India’s indebtedness to him.”
The statue will be installed under the grand canopy near which the Amar Jawan Jyothi flickers in remembrance of India’s martyrs. The eternal flame, which has not been extinguished for 50 years, will be put off on Friday, as it will be merged with the flame at the National War Memorial.
The canopy, which was built along with the rest of the grand monument in the 1930s by Sir Edwin Lutyens, once housed a statue of the former king of England George V. The statue was later moved to Coronation Park in Central Delhi in the mid-1960s.
The announcement was hailed by many Bharatiya Janata Party (BJP) leaders, Union ministers and civil society members.
“Great news for the entire nation as PM @narendramodi Ji has today announced that a grand statue of Netaji Subhas Chandra Bose, will be installed at the iconic India Gate, New Delhi. This is a befitting tribute to the legendary Netaji, who gave everything for India’s freedom.” Amit Shah tweeted.
“Netaji is an epitome of India’s true strength & resolve. Congress has left no stone unturned to forget the immortal contributions of India’s brave son. PM @narendramodi’s decision to install Netaji’s statue at India Gate on his 125th Jayanti will inspire our generations to come.” Amit Shah added in his tweet.
The Prime Minister Narendra Modi will unveil a 216-foot statue of Ramanujacharya, a 11th century saint and a social reformer, in Hyderabad on February 5. The statue described as the ‘Statue of Equality is located in a 45-acre complex at Shamshabad on the outskirts of the city.
‘US, India should set bold goals to attain $500bn target’, said Keshap
Having achieved a huge success in their bilateral relations, two of the world’s greatest democracies – India and the United States of America should opt in favour of setting bold goals in order to take their relationship to a new high thereby achieving the ambitious target of $500 billion in bilateral trade echoes retired American Diplomat Atul Keshap, who recently became the new president of the US India Business Council (USIBC).
“I think it’s vitally important that we show that democracies can deliver; that the United States and India can be a driver of global growth and a model for prosperity and development in the 21st century,” Keshap said.
During his illustrious career, the veteran diplomat has served in various capacities with the US State Department. He has been the US Ambassador to Sri Lanka and the Maldives and has also served as the Principal Deputy Assistant Secretary of State.
In 2021, he took over as the Chargé d’affaires of the United States mission to India and has been instrumental in shaping the US-India ties under the Joe Biden administration.
“I feel it’s critically important that we show that open societies powered by a free enterprise can be relevant for their people and can help power the world out of this pandemic. I tend to agree entirely with President Biden and PM Narendra Modi that the US India Partnership is a force for global good and it’s going to have a huge impact on economic growth,” he said.
Keshap feels that USIBC is the podium where he can give his best and help the people from both countries. “We need to move forward on the global trade agenda. We need to ensure the prosperity of the future, especially after this pandemic,” he said.
The 50-year-old diplomat reflected on the vision set by Biden, about potentially having a $500 billion trade in goods and services between the US and India. “That’s a very ambitious number and I believe in it. It is a great idea to try to have ambitious targets, else we are on a standstill” he said.
Having donned the new role recently, Keshap said he wants to help meet that $500 billion bilateral trade goal. “This is where the government and the private sector have to work together hand-in-hand,” he said.
“We have to articulate the benefits and have to convince all our stakeholders that there is value in lowering trade barriers, in creating strong standards and in creating positive ecosystems. There is value in dealing with small technical issues that might be creating a blockage to greater prosperity between our countries,” Keshap said.
Coal crisis: How private sector can power India’s growth
India has been reeling under a coal shortage crisis and the situation got aggravated in October 2021 leading to a lot of concern amongst various stakeholders including government bodies, thermal power plants, industry and investors. The shortages, triggered by global factors, of course with Indian peculiarities, threatened supplies to thermal-based power plants, leading to an alarm.
Recovering from Covid-19-induced reverses, the global economy has rebounded and gathered steam. This was one of the prime reasons why there was an acute shortage of coal and sources of energy, worldwide. Global coal prices have risen by 40 per cent.
Port based Indian power plants normally rely on imports. Given the global conditions, and the sharp rise in coal prices internationally, the power plants are now almost solely dependent on Indian coal. It’s in this context that the coal crisis has been amplified by various stakeholders.
While global factors did contribute, did we fail to take necessary action, over a period of time? To highlight one prominent factor: Why should the Coal India Limited have monopoly over coal mining / supplies? Consider the CIL performance in the last few years: Its output was 606 MT in 2018-2019, 602 MT in 2019-2020, and 596 MT in 2020-2021. Contrast this with various governments’ efforts to ramp up Coal production in the 1992-2010 period.
So, why did Coal India Limited fail to expand capacity? This is one big question that must be debated. It can therefore be argued that CIL’s monopoly on coal extraction and supplies (till very recently) is one of the prime reasons why India’s thermal power plants faced a coal crisis.
India has the world’s fourth-largest coal reserve, with around 300 billion tonnes of coal. But it is also true that it imports approximately 250 million tonnes of coal. This is because we don’t mine enough and use our resources optimally.
CIL supplies 80 per cent of India’s coal needs. The demand for coal in India is nearly a billion tonnes a year, and the supply is below 800 million tonnes.
Unfortunately, based on then CAG Vinod Rai’s miscalculations and the Notional Loss theory, the Supreme Court cancelled 214 coal blocks in September 2014. Private players were not given a patient hearing on the issue. Rather than encouraging them, the private sector got punished unfairly for its efforts to strengthen the economy through coal mining. If 100 out of 214 of those mines were functional and each one was producing, say, 4 mtpa of Coal, India today would be a net exporter, not importer, of Coal.
Rai’s theory and the Supreme Court judgment had devastating consequences. The coal production in the country took a hit. The country’s GDP declined by almost 1 per cent. Millions of jobs were lost. NPAs of banks with exposure to power, steel and mining sector rose exponentially. Such is Rai’s credibility that he recently tendered an apology to a Congress leader, who, Rai claimed in his book, “requested him to remove then PM Manmohan Singh’s name from the coal scam”. Taking a cue, if someone sues Rai for his Coal Scam theory and numbers, would he be able to defend his report in court?
Against the recommendations of CAG of incentivizing good performers who produce coal, the Supreme Court imposed an additional levy of 295 rupees per ton on the coal extracted from operational mines retrospectively from 1993. The private miners were directed to deposit more than Rs. 9000 crore as penalty.
The stagnating CIL coal output should be seen in this background. Being a monopoly, CIL could have been a saviour for the nation. CIL however neither ramped up production nor invested in technology or expansion of new mines.
In 2020, in a bold and much welcome development, the Union Government opened up commercial coal mining, thus ending Coal India’s monopoly. PM Modi said that he wanted India to be a net exporter of coal, as he set ambitious targets.
A lesson from the recent crisis is this – the CIL monopoly, along with the no-entry sign for the private sector, harmed the country.
There are lessons to be drawn from the opening up of the aviation sector for the recent coal crisis episode. With a series of measures, the aviation sector was opened up, with the Air India privatisation being the latest example. The economy, the nation and consumer benefitted. When sectors as diverse as Steel, Infrastructure and Healthcare were unshackled, the end consumer, the economy and the nation benefitted.
Similarly, if the private sector in coal mining would have been encouraged consistently, and ill-advised measures like cancellation of coal blocks not taken, the coal situation would not have come to such a pass. In 2014, the private sector was said to be accounting for 90 million tons of coal – a substantial figure. Instead of getting encouraged, the private sector had to fight protracted court cases and spend its time wastefully.
There’s a consensus that Coal would continue to power economic growth for a country like India for the next two decades. It’s important that this abundantly-available natural resource is used optimally. The Private Sector can play a key role here.
The Government has shown intent and commitment. It’s time for all the stakeholders to ensure that the country faces no shortage of Coal hereafter. It’s time we all learnt our lessons and ensure that Coal and Mining booms and fires India’s growth march.
Opinion1 year ago
South Block’s mistakes will now be corrected by Army
Sports2 years ago
When a bodybuilder breaks Shoaib’s record
News2 years ago
PM Modi must take governance back from babus
Spiritually Speaking1 year ago
Spiritual beings having a human experience
News2 years ago
Chinese general ordered attack on Indian troops: US intel report
Legally Speaking2 years ago
Law relating to grant, rejection and cancellation of bail
Sports2 years ago
West Indies avoid follow-on, England increase lead to 219
Royally Speaking1 year ago
The young royal dedicated to the heritage of Jaipur