Who is sabotaging India'senergy sector?
Energy security being stymied
By M.D. Nalapat
Despite the fact that successive governments in India have taken away hundreds of thousands of crores in taxes out of the oil sector, no regime has attempted to block the covert sabotage of Indian exploration efforts by those international and domestic forces that seek to stop India from emerging as a global power.
The Manmohan Singh government is busy using the CBI at the drop of a postcard,but remains silent on the way the ONGC has torpedoed any hopes that India would achieve near self-sufficiency in oil and gas production.Each of the wells drilled by ONGC can tell a story of maladministration and overt mischief designed to prevent speedy exploration. However, as much of the story would implicate Congress regimes, naturally those responsible have been allowed to enjoy their luxurious retirements despite the fact that domestic oil production has remained flat since Rajiv Gandhi lost power in 1989. As a result of such wilful neglect, while India consumes 3% of the world'soil resources, two-thirds of this has to be met from imports.
As a result, the Indian eco-nomy has become vulnerable to an ?oil shock?, caused for example by possible tensions between the US and Iran. The aftermath of the 2003 Iraq war led to oil prices rising well above $60 a barrel. The likely US war with Iran could push price per barrel to more than $100. This would cripple growth in India by sending skywards the cost of transportation.
Surely the fact that 74% of India'soil needs are now met through imports (as against just 29% in 1984) and projections are that nearly 85% of India'soil needs would need to be imported within the next five years should be a better reason for a CBI enquiry than most of the political cases that this most politicised of agencies is pursuing. The workings of the different public sector oil and gas companies are crying out for just such an examination, if further mischief is to be halted.
The Manmohan Singh government is busy using the CBI at the drop of a postcard, but remains silent on the way the ONGC has torpedoed any hopes that India would achieve near self-sufficiency in oil and gas production. Each of the wells drilled by ONGC can tell a story of maladministration and overt mischief designed to prevent speedy exploration.
Whether it is off Cambay, Krishna-Godavari or Cauvery,the huge proven deposits of natural gas go largely unexploited, even while cabinet ministers scuttle to Dhaka to beg for supplies from the jihadist government of Khaleda Zia. Indeed, recently Narendra Modi was derided for daring to suggest that energy assets had been located. Clearly, vested interests do not wish to see India achieve energy security. The resulting snail-like development of indigenous capacity in the oil and gas sector has to be seen not just in the context of the expanding needs of the economy. Despite a near-total lack of policies by the UPA that are development-friendly,the Indian economy has only slowed down to 6% from its previous rate of 9%. Even such a relatively low rate of growth will need an annual increase of 9% in power supply, if the quality of life of the average citizen is to improve.While the Left parties decry foreign investment,the reality is that India will need more than $ 900 billion over the next 25 years to achieve reasonable standards of fuel use. Unless foreign direct investment is welcomed in the power sector,the country will not be able to escape the deepening trap of power shortages and breakdowns that it is enduring at present.
For such levels of money to flow in,reforms in electricity generation and distribution need to be carried out.Sadly,there seems to be no sign of this happening.The ?China lobby? in the UPA is ensuring that the reforms needed for attracting huge doses of FDI remain unimplemented. Although India has huge deposits of coal, lack of reform in this sector has led to the country having to actually import this feedstock.
As in the case of oil, there has been consistent sabotage of efforts to discover coalfields away from the three states of Bihar, Madhya Pradesh and West Bengal, despite positive findings in several other states by the Geological Survey of India. Imported coal can generate far more money in bribes and kickbacks than the local product. Small wonder that such ?coal middlemen? are fattening on the misery of industrial plants needing this feedstock,who find it difficult to secure sufficient coal supplies to meet their needs.The situation has improved to an extent, because of the personal attention paid by the Coal Minister Manmohan Singh, who has far more effective authority in this portfolio than he has over the rest of ?his? government. Unless steps are taken to stop the wanton neglect of possibilities for extracting more coal,the country will face an annual deficit of more than a hundred million tonnes by the end of the 11th Plan period.
Recently Narendra Modi was derided for daring to suggest that energy assets had been located. Clearly, vested interests do not wish to see India get energy security.
As coal contributes 63% of the feedstock used in the generation of electricity, it is small wonder that the power sector is as hobbled as the rest of the energy infrastructure in India. Even at a ?Nehru?? rate of growth of 2% (that achieved under the favoured ?spiritual son? of Mahatma Gandhi) the country will need to expand power output at thrice the speed it is presently doing.In case the return of Nehruvian economics (as evidenced in recent punitive tax measures,for example, undoing the good done by Finance Minister Jaswant Singh) proves of short duration, power supply will need to increase appreciably.
Sadly, due to wilful sabotage, nuclear power generation has remained stagnant at barely 2% of the country'stotal output. Throughout the years of the 8th Plan period , the then governments – for reasons that need enquiry – refused to allocate sufficient funds to carry the programme forward,especially that based on thorium. Despite this mischief, our scientists have managed to master the intricate technology of converting nuclear energy into electricity.In case President George W Bush does not succeed in getting the consent of the pro-China elements in the US Congress to implement the Nuclear Cooperation Agreement with India,then New Delhi may be left with no other option than to sell nuclear technology to foreign entities in order to generate the money needed to speed up a programme that would convert the country's357,000 tonne of thorium into electricity. This would be more than enough to generate 20,000 mw of power annually. The present government is looking at spending Rs. 1,19,000 crore in the next few years in purchasing (usually obsolescing) defense equipment from foreign countries. If that money were to be spent not just in the indigenisation of more defense production but in a speeded-up programme of the development of fast-breeder thorium-based reactors, the effect on India'ssecurity would be considerably higher.
What the country needs is more sensor equipment to detect infiltration; more attention paid to the gear that combat troops carry,such as night-fighting capability; more fast patrol craft; more locally-made helicopters, in view of the fact that a conventional war seems remote, except with either of two countries with even more primitive equipment, Bangladesh and Pakistan. As for non-conventional sources of energy, apart from a few states such as Tamil Nadu, the rest have lagged behind. Instead of seeking to tax business travel and conferences on the assumption that company executives should – like babus – just wait in their offices for opportunities to land up, Palaniappan Chidambaram would be better advised to try and speed up the development of power sources such as wind energy,by giving tax incentives.The present Union Finance Minister (an individual the present writer still has a lot of respect and regard for,based on his past stint in the job) should understand that the job of a Union Finance Minister is to dynamise the economy, not destroy it in the cause of feeding an expanding army of bureaucratic parasites. Weather currents in India are such that wind farms can potentially generate nearly 50,000 MW of energy annually, as against just 2100 mw at present. As for hydropower, the frequent issue of stay orders by the courts as well as deliberate neglect of this source has meant that only 12% of the country'spotential is being tapped.
(The writer is Professor of Geopolitics, Manipal Academy of Higher Education U26C/8 DLF QE-III, Gurgaon-122002.)