EVENTS & ISSUES

New Delhi, 3 March 2008

Aviation Sector

High Potential for Growth

By Dhurjati Mukherjee

The aviation sector in India is poised for a big leap forward in the next five years with nearly 45 to 50 airports being revamped by public and private players. Though the unprecedented expansion has become essential, the present infrastructure is woefully inadequate to handle the growth perceived in the years ahead. But with increased air travel becoming a reality because of reduced fares, the Government has realized the need to give special emphases to this sector through public-private participation.

According to a study by Assocham and Ernst & Young, India would need at least 250 aircraft by 2012. While only 15 million passengers travelled by air in 2003-04, a little more than the number of people who travel by rail in a single day, the figure was almost 75 million in 2005-06 and is expected to reach 100 million by this year end. Similarly, the number of aircrafts in the Indian skies, now about 290, will witness an annual growth rate of 15-20 per cent to keep pace with the increasing demand.

The Civil Aviation Minister, Praful Patel, has anticipated an investment of Rs 100,000 crores in the next five years in fleet acquisition. However, his estimates seem rather modest as Kingfisher alone has ordered for 50 aircraft amounting to Rs 20,000 crores at the last Paris show. Similarly the merged entity of Air India and Indian may buy more planes than the 111 ordered by them last year to cope with increased traffic, both domestic and international. Out of these 68 Boeing jetliners have been ordered for an estimated Rs 35,000 crores. Of these, 25 will be delivered in this fiscal year itself. Indian has also ordered another 43 Airbuses.

It is estimated that even with private airlines giving tough competition, Air India would need substantial more aircrafts as it would have to retire 65 planes over the next three years. These planes would be passed on to the new cargo subsidiary being floated by the public sector airline. Air India has also joined the Lufthansa-led Star Alliance, which will help it to fly to many European destinations from the hub that is to be set up in a European airport shortly.

In fact, with traffic out of India expanding at 25 per cent and Air India estimates it may need more planes by 2011. “Looking at the demand and the passenger growth, the number of additional aircraft needed would be in the region of 60 planes. But this is a very rough estimate”, pointed out the Air India chairman, B.V. Thulasidas.

Besides, with the increase in fleets of both Air India and the private players, the need for upgrading the airports is also being looked into. Presently, only 62 domestic and 12 international airports are in active use though the country has over 300 airports and airstrips. It may be mentioned here that except Delhi and Mumbai, no airport is equipped to handle the humongous A 380 of which Kingfisher has ordered five.

Also, expansion and modernization of the existing airports has been a key priority of the Government. While the Government is investing around Rs 12,000 crores in modernizing the airports, current estimates indicate that private investors would pump in Rs 24,000 crores in the coming years.

The modernization of the Delhi and Mumbai airports, which handle around 40-42 per cent of the total traffic, are already ongoing with an investment of Rs 5316 crores earmarked in the first phase for the Delhi airport and Rs 6130 crores for Mumbai. Both projects are expected to be completed by 2009 and would compare with the best in Asia. The Aviation Ministry has also decided that both Delhi and Mumbai would have more than one airport in future to cope with growing requirement.

Regarding the Kolkata airport, the Airports Authority of India (AAI) finalized its plan for an integrated international-cum-domestic airport at a cost of Rs 17000 crores by 2010. Drawn up by the Aeroport de Paris, the plan for the Kolkata airport would be executed by the AAI and work is expected to start soon. The new modernized airport would have a capacity of 20 million passengers annually, up from the current 5 million and would be capable to handle traffic till 2023-24. Meanwhile the State Government wants the Kolkata airport to have two runways to meet the growing future requirement. 

According to records, 70 per cent of the total traffic is concentrated in five airports (Chennai, Bangalore and Kolkata apart from Delhi and Mumbai). As such, these airports needed to be expanded and modernized to ease congestion and ensure swift movement of passengers. Apart from these airports, the Committee on Infrastructure, constituted by the Prime Minister last year, approved the modernization and development of all the 35 non-metro airports by the AAI to world class standards at an estimated cost of Rs 4662 crores. .

These airports are spread from the South (Thiruvanthapuram) to the North (Jammu) and from the North East (Imphal) to the West (Rajkot). The land area of these airports ranges from 15 to 1500 acres. Though space has been a major constraint for some of these airports, the AAI has finalized airside plans for 24 of them, which will again be through public-private participation.   

Meanwhile the airport city theme is gaining ground with greenfield airports at Hyderabad and Bangalore providing enough scope. Further, the proposed cargo hub at Nagpur may include a special economic zone (SEZ) besides logistics and a township. Hotels, retail space and various entertainment options are being planned for Delhi and Mumbai as well.

In the ultimate analysis, the growth of the aviation sector is crucial to the development of the country and also to the country’s status as a major economic power. With the sector open to the private sector and fares having come down, more and more people would prefer air travel. Thus it is necessary that the time schedule of the airports modernizing work is maintained and completed in time. ---- INFA

(Copyright, India News & Feature Alliance)

Events & Issues

New Delhi, 28 January 2008

Human Development Dismal

URGENT NEED FOR CORRECTIVES

By T.D. Jagadesan

The UNDP’s Human Development Report is one of the most eagerly awaited among the numerous reports published by the United Nations and its agencies every year. During the last few years, the Human Development Indicator (HDI) tables included in such reports have gained great acceptability among the member countries because of the credibility of the data and fairness in analysis.

The HDI is a composite index assessing human development on three important criteria, namely, a long and healthy life, access to good education and reasonably good standard of living. The report provides reliable information collected through a network of field agencies about life expectancy at birth, enrolment in primary, secondary and higher education and the Gross Domestic Produce (GDP) per capita in Purchasing Power Parity (PPP) dollars. It provides a wide range of useful data.

Based on the data collected and analysed, UN member countries are ranked according to their achievements in human development and this ranking becomes for the ordinary citizens an easy guide to assess the performance of their respective Governments.

The Human Development Report for 2007 which was released in New Delhi in the second week of December last, focused on the issue of climate change, and therefore, the attention of the people was mainly centred on the implications of climate change on development.

We, in India, have particularly to take serious note of the fact that on the criterion of human development, our country ranks 128 in the list of 177 countries of the world covered by the survey. A disturbing feature about this low ranking is that India has come two places down on its ranking from 2006.

One may argue that slipping two places is not so serious a matter to worry about, but the fact that India has been at the 128^th rank even in 2000 is certainly a matter of great concern, particularly because, of late, we have been talking too much about “India Shining”, “Rising India” and about India being one of the fastest growing economies of the world”.

While we take credit for the fast rate of growth of the GDP, we seem to be over looking the fact that on the index of human development, India is in the lowest bracket of 50 countries covered by the UNDP survey. The country has no doubt made some progress in life expectancy, enrolment in education and the GDP per capita, but other countries have also registered progress and some have shown much better progress than India.

Take for comparison two Asian countries, China, a country with which we love to make comparisons, and Sri Lanka, a small country which had gained independence at the same time as India. According to the HDI, China ranks 81 and Sri Lanka 99, as against India’s 128.

Besides, life expectancy at birth in China is 72.5 years, in Sri Lanka 71.6 while in India it is 63.7 years.  The GDP per capita in terms of the Purchasing Power Parity is $ 67.57 in China, $ 45.95 in Sri Lanka and only $ 34.52 in India.

We seem to be carried away by the 9 per cent growth rate of the GDP. However, the GDP growth can be determinant of development only if it is shared equitably by all sections of the people. Certainly, we cannot derive much satisfaction from the growth rate of the GDP when more than a quarter of the population in our country still lives in abject poverty.

If in spite of our oft-proclaimed good intentions to eradicate poverty among the masses and our allocating a fairly large share of public funds for human development programmes, we find ourselves stationary at the low rank of 128.

According to observers, clearly, something is radically wrong, either in our strategies for planning or in the contents and relevance of the programmes we have adopted for human development. Or can it be that the fault is not with our strategies for development or in the relevance of the programmes, but in their implementation of the field level.

The all-pervading corruption in our society, particularly in the public administration sector, has often been identified as the main cause for the failure in the benefits of the development process reaching the sections of the people which need them most. Perhaps, all these are causes for the country’s poor record in human development.

Unfortunately, instead of making honest attempts at corrective action, everyone is engaged in the easy game of throwing the blame on the other. Politicians blame the bureaucrats for the laxity in the implementation and for corruption, while the bureaucrats accuse the politicians of the same crimes. Both politicians and the bureaucrats blame those engaged in industry and business as the source of corruption. While they, in turn, accuse the politicians and the bureaucrats as being obstructionists in their paths.

In the bustle and din of the exercise of shifting the blame for the unsatisfactory achievement in human development, very little attention is being paid to the share of the responsibility of the Planning Commission for this poor record.

In sum, it is time that the Planning Commission, as the main agency for the formulation of strategies, plans and programmes and also for monitoring their implementation, turns the searchlight inside and comes up with bold suggestions for improving its own role in achieving the goals of human development ----  quickly and satisfactorily. ----INFA

 (Copyright, India News and Feature Alliance)

Events And Issues

New Delhi, 14 January 2008

Myth Of Incumbency

LESSONS OF GUJARAT ELECTIONS

By T.D. Jagadesan

The Gujarat elections have thrown up several lessons which the leaders of political parties can ignore only at their own peril. A few important among these deserve special mention.

The first is the repudiation of the incumbency theory. Whenever an election results in the defeat of the party in power, it has become a regular practice to name incumbency as the villain responsible for it. However, if we carefully analyse the various causes for the defeat of the parties in power, it will be seen that inefficiency in administration and corruption have been responsible for such reverses.

The incumbency argument has come to be advanced in the defence of those defeated only in recent years. Jawaharlal Nehru was the Prime Minister continuously 1946 to 1964 and led his party to victory in successive general elections. Instead of incumbency becoming a disadvantage, his record, both on the grounds of efficiency and cleanliness in administration, only strengthened his indispensability for his party and the nation.

The Congress Party was then not a monolithic organistaion with one supreme leader. Its leaders included several persons with grassroots level experience and sizeable following in their respective states. The Chief Ministers and heads of party organization in various States continued for long periods in their respective positions and led their party to victory, time and again without incumbency proving to be a handicap at any time.

K. Kamraj, for instance, was Chief Minister of Tamil Nadu from 1954 to 1965; B.C. Roy was Chief Minister of West Bengal from 1948 to 1962 and Gobind Ballabh Pant was Chief Minister of Uttar Pradesh from 1946 to 1955 (when he moved to the Centre as the Union Home Minister). Modi in Gujarat is certainly not on par with a B.C. Roy or G.B. Pant or a Kamaraj as a national leader, but one can say that his record of efficiency and integrity was a major factor in his success in the elections as had been in the case of the aforementioned national leaders in their respective States.

Many ardent supporters and admirers of Modi have, in the exuberance of their loyalty to him, claimed that his victory in the elections was historic as it was achieved in spite of the incumbency. Yet the fact is that incumbency is never a handicap for a leader who provides clean and efficient administration. The Gujarat elections have clearly exploded the myth of incumbency theory.

The second lesson of the Gujarat elections is that development is the most potent argument for winning an election in a country like India, which is still struggling to cross the threshold of social and economic progress. A lot of information based on facts and figures was placed before the electorate by Modi in support of his claims that substantial gains had been made in development. They were no doubt challenged by counter arguments and statistics by the Opposition. Ultimately, however, the people are the best judges about development and no argument can convince them except their own experience.

A third lesson from the Gujarat elections is that people are inclined to repose their confidence in a leader who has proved to be capable of taking bold decisions in the interest of the State rather than in others who try to win votes by promising every good thing to everybody. Modi’s detractors in Gujarat seem to have calculated that certain bold measures he had taken like, for example, enforcing payment of arrears of electricity dues, would cost him the votes of the farmers, and even tried to make it an issue in the elections. But such bold action by Modi seems to have only enhanced his reputation for courage in taking unpopular decisions.

Again, his decision to deny tickets to as many as 47 sitting MLAs based largely on their poor performance had showed him up as a leader who would not make compromises with sloth or inefficiency. The fact that 33 of the 47 new faces won the elections, has confirmed the people’s perception about him as a leader who can take sound and bold decisions. The lesson from such actions is that people will repose their trust more in persons with courage to take quick and sound decisions than in leaders with a “please-all” policy.

The Gujarat elections have also served to deflate the exaggerated importance which has been attached to caste and sub-caste loyalties at the time of elections. This is not to say that caste is not a major factor in Indian elections. On the other hand, what the Gujarat elections have proved is that in a socially advanced State, caste and sub-caste loyalties will have only a limited influence in deciding the fortunes of the candidates.

Another important lesson is that people do not favour opportunistic party-hopping by their leaders and that the parties which welcome such persons to their fold are certain to suffer from such decisions rather than be benefited from them. The Congress indirectly contributed to the victory of the BJP in certain constituencies where it put up last-minute defectors from the BJP as Congress candidates. If these people were criminals and vicious communalists when they were with Modi, a quick change from saffron to khadi could not have washed away their guilt instantly.

The ordinary people saw this action as opportunistic endorsement of defections without any consideration for principles and ideology. This affected the credibility of not only these candidates but also of the Congress as a champion of secularism. The refusal of the people to lend their support to most of such defectors has proved that the people will no longer follow their leaders blindly. They cannot be taken for granted. --- INFA

(Copyright, India News and Feature Alliance)

PEOPLE & THEIR PROBLEMS

New Delhi, 29 December 2007

Wind Power In India

PREPARING FOR GUSTY FUTURE

By Radhakrishna Rao

The abundantly available, non polluting wind is all set to become a significant contributor to India’s endeavor towards meeting its growing energy needs. Right now, the country is the fourth largest generator of wind power in the world after Germany, Spain and USA. Moreover, India was one of the five countries that added more than 1,000-MW wind energy capacity during 2006-07.

According to sources in the Ministry of  New and Renewable Energy (MNRE), the present installed wind power capacity in the country which stands at 7,093-MW is expected to touch 10,500-MW by 2011-12. Over the next five years, the country plans to boost the wind energy capability to the extent of 2,000 MW per year. As it stands, the gross potential for wind power has been estimated at 45,000-MW.

Thanks to the technological advances, the wind energy cost today compares favorably with coal and nuclear power. Presently, Tamil Nadu accounts for almost half of the total installed wind energy capacity in the country. Besides, Maharashtra, Gujarat, Karnataka and Rajasthan which are also in the forefront of wind energy generation.

Meanwhile, the Chennai-based Centre for Wind Energy Technology (CWET), which is active in research and development, standardization, testing and certification for the wind energy sector, has taken up the challenge of preparing a wind atlas of the country. This wind atlas would reveal the speed and density of wind under varying climatic conditions in different parts of the country. Also, the wind atlas to qualify wind speed and density accurately would be available soon. It would establish how much more wind power could be generated.

According to energy experts, India has completed more than two decades of wind energy generation programme and there are no technical barriers in so far as the devices for harnessing wind power on a large scale is concerned. “Wind is an inexhaustible resource and has zero emission. One does not have to import wind from West Asia because it is a freely available resource”, asserted a fellow of The Energy Research Institute (TERI).

Incidentally, a study carried out by the World Bank and the US Energy Department lists India among the 29 countries that would stand to gain from harnessing wind power on a large scale. An expert from UNDP pointed out that India’s long coastline and vast desert expanses which are endowed with high wind power potentials are best suited for the wind energy generation projects.

Thanks to the sustained initiatives of the State-owned enterprises like Bharat Heavy Electrical Ltd (BHEL) and National Aerospace Laboratories (NAL) and vigorous efforts by many private companies, wind power generating units are produced indigenously with a minimum of imported contents.

A Chennai-based company, Indowind which produces wind power for sale to power utilities like the Tamil Nadu Electricity Board (TNEB) or corporate houses has become eligible for carbon credits from the United Nation’s Framework Convention For Climate (UNFFCC) under the World Bank’s Clean Development Mechanism. Indowind is essentially a wind farm developing company.

On the other and, Vestas, a global player in the wind energy sector, is drawing up plans to manufacture large capacity turbines from its wholly-owned Indian subsidiary for the Asian market. Export of wind energy generating machines from India is expected to grow rapidly as the global market is set to expand from US$ 20 million in 2007 to $37 million in 2010.

The Pune-based Suzlon Energy, India’s largest and the world’s fifth largest wind turbine maker has acquired global footprints over the last two years. Interestingly, Suzlon has made a big contribution to the popularization of wind energy parks, wherein the company does everything from the identification of the site, planning, technical implementation as well as operations and maintenance. It has already promoted wind energy parks in Maharashtra and Tamil Nadu.

Spurred by the gusty prospects of wind energy, oil and petroleum companies such as the Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Ltd (HPCL) and Reliance Energy are busy working on their plans to make it big in this sunrise sector.

While ONGC plans to set up a 50-MW wind farm in Gujarat, Reliance Energy has tied up with US giant GE to develop 500-MW of wind power at an estimated initial investment of Rs.25,000 million. Power majors such as the National Thermal Power Corporation (NTPC) and Tata Power are also working towards setting up mega wind power projects.

Not to be left behind, the Indian Railways has unveiled a plan to set up a 10-MW wind power project near Chennai. Many of India’s power intensive and polluting industries like cement and textile have now set up their dedicated wind power project to save on power costs and to earn green profits by generating carbon credits.

Gujarat is now making its mark as a major hub for the production of wind power generating devices. While Suzlon has already setup a facility in Vadodara for manufacturing wind turbines, Jyothi Ltd, a Vadodara based company that was so far active in supplying generators to wind mill companies is now offering end-to-end solution for wind generation. Similarly, the Anand-based Elecon Engineering, with core strength in materials handling equipment and gears has now tied up with Turbo winds, a Belgian company for technical know-how for wind generating units.

Clearly, along with the technological innovations, the incentives offered by both the State and Central Governments. have been providing a “thrust and push” to the Indian energy sector. In India where the demand for power outstrips the supply by 7.3 per cent, investment in wind energy qualify for a hefty 80 per cent depreciation benefit in the first year of minimum six months operations.

Investors in wind energy also enjoy easy credit facilities, a ten year tax holiday and free grid linkage. “The market for wind energy is enormous in India and we have feedback that order books of all the wind mill manufacturers are full. There is a space for existing players to expand as well as new players to enter. A number of players are joining hands with foreign partners to set up shops in the country,” asserted the President of World Wind Energy Association. --- INFA

(Copyright India News & Feature Alliance)