Intro: On this Republic Day, India has witnessed significant breakthrough in the bilateral relations with the United States of America. While India wants to assert its global position under the changed regime, the west has also started acknowledging India as a big player.
The President of the United States of America, Barack Obama’s visit to India as chief guest for the Republic Day ceremony witnessed a significant breakthrough in the bilateral relations of both the countries. While India wants to assert its global position under the changed regime, the west has also started acknowledging us as a big player. Increasing relations between both the countries is also driven by geo-political situation of South Asia where India and China are the major players and they can influence the entire economic and political diaspora. Besides clearing the hurdles in implementation of civil nuclear programme, the US also supported India’s demand of a permanent place in Security Council which irked our neighbouring countries. US President’s visit is successful in terms of both substance and political symbolism.
One of the major reasons to cheer about the recent visit is the clearance of the roadblocks of the civil nuclear deal which was signed in 2008. It has paved the way for the green energy in this country which is suffering from chronic energy shortage. According to International Energy Agency (IEA), India’s per capita energy consumption is one-third of the global average. Renewable energy and nuclear energy comprises only 2 per cent and 3 per cent respectively and the rest is contributed by fossil fuels and hydroelectricity. As per the data released by Ministry of Statistics and Programme Implementation (MOSPI) total domestic energy production of 669.6 Million Tons of Oil Equivalent (MTOE) will be reached by 2016-17 and 844 MTOE by 2021-22. This will meet around 71 per cent and 69 per cent of expected energy consumption respectively and the remaining shall be met from imports. Based on these projections we should acknowledge the fact that India doesn’t possess sufficient energy resources and our energy requirements are going to increase significantly to meet our economic development.
US has waived off the condition related to tracking of the nuclear equipment supplied to India and now International Atomic Energy Agency (IAEA) will carry out the inspection on a periodic basis. A pool of Rs 1,500 crores will be created to meet any liability arising out of accidents and thus protection of our citizen has also been ensured. All the nuclear plants are operated by NPCI (Nuclear Power Corporation of India) and the liability clause says that in the event of disaster only the suppliers are liable which was discouraging the commercial cooperation. Now a pool will be created for which fifty per cent shall be contributed by the Central Government and the remaining amount shall be insured by the national insurance companies. It must be noted that the NPCI can still seek compensation from the suppliers in case the damage is due to faulty equipment and therefore the allegations of India subordinating to the US pressure is ill informed.
More than 70 per cent of the electricity is generated from coal based power plants and share of clean energy is very low. From the cost perspective also nuclear energy is efficient as compared to the thermal power. Data published by the US Energy Information Administration shows that production cost per MWh for conventional coal and nuclear energy is the USD (United States Dollar) 95.6 and USD 96.1, respectively. India is committed to reduce the green house emission and nuclear energy is also a source of clean energy which will help to reduce carbon emissions. In the changed regime we should look forward to take this natural friendship to a new level and expand our ties in other areas also.
Shshank Saurav (The writer is a Chartered Accountant)
