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1.The National Rail Plan ignores climate and energy sector realities
The National Rail Plan’s projections for the next 30 years are divorced from climate change and energy realities. This could have grave financial implications for Indian Railways (IR). These miscalculations are important enough for Piyush Goyal to reconsider before the draft national railways plan is finalised.
The draft National Rail Plan (NRP), released at the end of 2020, is an admirable attempt to forecast required capacity additions till 2030, and set the stage for 2050 requirements. Unfortunately, in at least its projections for coal freight, it serves as a standout example of siloed planning that has not taken into account larger geopolitical and technological shifts underway.
Several experts have warned that IR is overly dependent on coal freight for its revenue. In 2018, coal accounted for 49% of its freight by volume and over 60% by revenue, with 575 MT transported across the rail network. Diversification towards other cargo is obviously essential for the railways’ financial security. The NRP projects such diversification, anticipating that coal’s share of volume will drop to 39% by 2024 and 23% by 2051. Sounds good, except that this share decline masks a projected doubling of volume by 2031 (1,050 MT), and a near tripling (1,577 MT) by 2051.
According to the draft, in FY2019, coal tonnage moved across all freight sectors (road, rail and shipping) was 965 MT. NRP projects that total coal demand will grow to 1,502 MT by 2031 and 2,136 MT till 2051, of which IR would transport 70% or more. These projections of coal demand seemingly take no account of technological and geopolitical realities, as they imply that India’s coal consumption will continue to grow at a compound annual growth rate (CAGR) of 2.5% for the next 30 years.
The reality is that there is growing acceptance that coal use for power in India is likely to peak within the next decade, due mainly to the astonishing cost declines in renewable energy (RE) and battery storage technologies. Electricity generation accounts for 2/3rd of the country’s coal consumption.
Wind and solar are already far cheaper on a tariff basis than any new coal plant, and rapid declines in battery storage will soon enable deeper RE penetration. The Central Electricity Authority has projected that installed coal power capacity will stay largely constant till 2027, after accounting for the retirement of old plants and the commissioning of others currently under construction. The coal power plants that remain will predominantly be pit head, close to coal mines and less dependent on the railways to transport their fuel. Even if industrial coal use continues to grow (and there are promising cleaner developments on that front as well), it is unlikely to grow at high enough rates to compensate for electric coal’s anticipated peak.
On the climate front as well, in order to keep global temperature increase as close to 1.5°C, the Intergovernmental Panel on Climate Change (IPCC) says that the world needs to reach net zero emissions by around 2050. With countries, states, and cities amounting to more than 50% of the global GDP having set a net zero emissions by 2050 target, global political support for a coal phase-out is only increasing.
And yet, NRP projects a never-ending growth of coal demand in India for the next three decades. Obviously, for India to continue growing its coal consumption for decades more would be politically untenable, apart from economically wasteful, given the financial viability of cleaner, cheaper alternatives.
Ignoring climate realities and the energy transition already underway is dangerous, to the extent that it will result in flawed revenue projections and investment decisions by the Railways. India’s low carbon development depends on a financially robust rail freight network — wishful projections of coal as a major revenue source will undermine this goal.
This experience drives home the fact that India needs a ‘whole of government’ effort to confront the challenge of climate change — one that examines the linkages and domino effects that climate change has on virtually every sphere of life: national security, food and energy security, livelihoods, biodiversity, the financial system and ministries like the railways and surface transport that might, at first blush, seem completely removed from the climate issue.
2.News is different, treat it differently
New rules on regulating digital news portals, social media and streaming entertainment services have one fundamental flaw — they put news in the same regulatory basket as the other two. This is not just illogical, because news is completely and self-evidently different. It also potentially casts a huge shadow on media freedom. For one, digital news media is now under the Information Technology Act, which is plain wrong. Then, grievance redressal mechanisms are similar for news portals and sites that host user-generated content, which is again just wrong. And third, an oversight authority manned by government officials will be at the apex of the regulatory pyramid, under it will be a self-regulation body headed by a retired judge. The oversight body will draft a code and it will have suo motu powers to call for hearings. To apply this to digital news portals is to change the very notion of press freedom as commonly understood. The notice says Press Council of India rules should be followed by digital news media. Plus, remember, all news content in any case is subject to scrutiny under provisions of various laws. Regulation should have stopped there. What is worse is that, unlike with streaming service players, there was no consultation with digital news media on these new guidelines. A detailed consultation with stakeholders is a must before rules are finalised on news. These rules are unacceptable as they stand.
On streaming services, there are genuine worries whether the oversight authority comprising bureaucrats will have sufficient tolerance for creative content that is edgy, and also whether it will be biased in favour of ruling party sensitivities. India is a creative fertile ground now for streaming entertainment services. Regulation should not kill that new spirit.
More compliance requirements from the hitherto unregulated social media is welcome. Social media can’t host all manner of dodgy content and then say it has no responsibility. In fact, if anything, the rules don’t go far enough on this score. Social media should be made to assume the same responsibilities as a publisher. It is strange that news, which is largely responsible and is already under regulation, gets unnecessary extra regulation, while social media still gets off relatively lightly.
3.Flexibility matters: Greater private participation in vaccination demands forbearance for decentralised decision making
India’s vaccination strategy is making a welcome shift with greater choice and more private sector participation. Senior citizens and those with comorbidities getting shots from March 1 at 20,000 private vaccination centres with a reported price cap of Rs 400, is a huge leap for the vaccination campaign. After 40 days, against a target of 3 crore healthcare and frontline workers, only 1.23 crore vaccine doses could be dispensed to this target group. The challenge now is to ensure that the addition of new beneficiary categories and vaccination sites will boost capacity utilisation.
Some of the strategy shifts can certainly contribute towards this end. More people frequent private healthcare facilities. So having their choice of private service provider will provide a fillip to vaccination. Facilitating walk-ins without prior registration could be the other gamechanger. Co-Win app’s patchy performance, including pre-registration requirement, misfiring alerts, missing names, and over-centralisation by deciding for beneficiaries when and where to turn up for jabs was unhelpful. Bangladesh has a hybrid system of one-time online enrolment and in situ completion of all other formalities. Nepal is following an offline, decentralised model.
Now comes a less tech-friendly age group and a diffused population over whom authorities have even less clout than the predominantly government workforce in the first two phases. Numbers to vaccinate are also far greater. Any worsening of Co-Win glitches will dampen turnout and capacity utilisation. Experts have suggested decentralised Aadhaar-based offline data keeping to simplify and speed up vaccination. If capacity still goes unutilised – theoretically 30,000 sites should deliver 30 lakh vaccine doses daily – the vaccination strategy must be flexible enough to allow other adult age groups to take the shot.
With J&J’s one-shot vaccine mustering US expert approval and at least one Indian pharma company pitching for a tie-up, the bouquet of vaccines is growing bigger. Government must ensure that price caps don’t drag down capacity expansion, innovation and local manufacturing. Instead it must allow competition, economies of scale and technology maturation to organically discover prices, which could end up lower than present caps. With government facilities offering vaccines for free, it mustn’t obsess over private sector strategies. For instance, if a private facility can vaccinate beyond 100 beneficiaries a session – even 24,000 daily as health expert Devi Shetty suggested – free them to do so.
4.Pandora’s box: Endless slicing and dicing within reserved categories only adds to problems
In October 2017, a commission was set up by the government under former Delhi high court chief justice G Rohini to work out a ‘scientific’ method to subcategorise the Central list of OBCs who benefit from reservation of jobs and in educational institutions. The task was to be completed in three months. Three years on, the commission is still at it, with end-July being the latest deadline. The commission isn’t responsible for the delay. It’s a thankless task doing fine-grained analysis of over 2,000 castes to slice and dice the Central OBC list to provide for equitable distribution of benefits.
Will this exercise achieve its aim? Turn to states for answers as India’s reservation history has distinct regional patterns. In Tamil Nadu, over three decades after a successful agitation by the Vanniyar Sangam led to a carve out of 20% MBC sub-quota for some castes within the 50% BC category, trouble is brewing again. Vanniyar representatives want an exclusive internal reservation within the MBC quota. The permutations are limitless. In Karnataka, even a dominant group such as Lingayats is pushing for a bigger share of reservations.
The tendency to slice and dice is a reflex emanating from India’s poor record in providing quality education to all children and inadequate vibrancy in the economy. This also leads to pernicious identity formation. People are trapped in narrow group identities, with fresh reservation demands representing benefits for one group at the expense of another. It’s an endless zero sum game, like a cat chasing its own tail; the very obverse of ‘sabka saath, sabka vikas’. If distribution of benefits is inequitable, the existing provision to remove the creamy layer is a better way to broad-base benefits. History teaches us slicing and dicing eventually creates more problems while inhibiting fraternity and solidarity in society.
5.The benefits of privatisation
Indian governments, irrespective of their hue, have had a troubled relationship with privatisation. Much of this, on the basis of the history of privatisation, appeared to stem from a lack of belief in it. Sure, governments divested some of their stake in State-owned companies, but these were rarely controlling (or even significant) ones; worse, a combination of market factors, timing, and the nature of companies in which these stakes were being sold often meant that another healthy State-owned company was usually the last-resort buyer. It is difficult to find too many instances of real privati-sation in India ever since the idea gained currency in the late 1990s for one reason: There have been very few (Balco and VSNL are the ones usually named).
Which is why Prime Minister (PM) Narendra Modi’s repeated emphasis on privatisation — a handful of times in speeches in the past few weeks — is both important and welcome. These come after finance minister Nirmala Sitharaman mentioned privatisation, as well as monetisation of the assets of State-owned companies, in the Union Budget, which also went far enough to mention the privatisation of two State-owned banks. Clearly, there is a plan, and the prime minister’s repeated references to it can be seen as both a way to get wider buy-in as well as an indication of the government’s commitment.
This is a good move for three reasons. The first, of course, is that governments have no business being in business. The State’s capital can be better used elsewhere. The second is that privatisation, more often than not, improves competitiveness (perhaps even making a business globally competitive), quality, and expands the choice available to consumers. India has indicated that State-owned companies in all, but four strategically important sectors will be privatised. And even in these four, the number of State-owned companies will be kept “at a minimum”. The third is the money the State can hope to raise from privatisation. The government’s plan to monetise its assets will help it “achieve ₹2.5 trillion investment,” the prime minister said this week. The Union government has to find a way to tackle multiple challenges to see this through. It will have to address political opposition to efforts to privatise State-owned banks and companies. It will have to deal with employee unions — which, at least in the case of banks, are powerful. And it will have to come up with a fair-and-transparent process, so that it can finally make some headway and improve India’s privatisation track record.