Friday, May 18, 2007

In the new India, the old problem with electricity

http://www.iht.com/articles/2007/05/17/news/india.php

GURGAON, India: This suburb south of New Delhi is where the fruits of India's economic advance are on full display: sprawling malls, gleaming skyscrapers housing India's acclaimed software sector, condominiums with names as fanciful as Nirvana Country.

But this posh address of the new India is also a portrait of Indian ambitions bumping up against Indian realities.

Look up at the top of these towers and on any given day, you are likely to find three, four, six smokestacks poking out from each rooftop, blowing gray-black plumes into the clouds. If the smokestacks are on, it means the power is off and that the building - whether bright new mall, condominium or office - is probably being powered by diesel-fed generators.

This being India, a country of more than one billion people, the scale is staggering.

In just one case, Tata Consultancy Services, a technology company, maintains five giant generators, along with a nearly 20,000-liter, or 5,300-gallon, tank of diesel underground, as if it were a gasoline station.

The reserve fuel can power the lights, computers and air conditioners for up to 15 days to keep Tata's six-story building humming during the hot, dry summer months, when temperatures routinely soar above 104 degrees Fahrenheit (40 degrees Celsius) and power cuts can average eight hours a day.

The Gurgaon skyline is studded with hundreds of buildings like this. In Gurgaon alone, the state power authority estimates that the gap between demand and supply hovers around 20 percent, and that is probably a conservative estimate.

For all those who suffer from crippling power cuts in cities like this, there are others who have no electricity connection at all. According to the Planning Commission of India, 600 million people - roughly half the population - are off the electricity grid. For this reason, it is impossible to estimate accurately the total national shortfall.

The electricity crisis has become all the more acute for the roaring pace of India's economic growth and the new material aspirations it has generated.

Rachna Tandon, a prosperous housewife, is a good example. She moved here to a quiet street of row houses 14 years ago, settling in what was one of the first residential sites built by DLF Universal, Gurgaon's and India's largest builder.

Back then, electricity was in short supply, but she was fully confident things would improve. The advertisements at the time described Gurgaon as the best address south of Delhi. It was pitched as a millennium city.

Today Tandon says she prefers to think of it as a medieval city. The day before, the power went out for roughly 11 hours. Her inverter, which is basically a series of rechargeable batteries - a household necessity here - collapsed after four hours.

For respite, some of her neighbors drove around in their air-conditioned cars. Her own children lingered outside and finally, when they nodded off to sleep, they lay on the living room floor, the coolest spot in the house.

Each appliance in her well-stocked home - an air conditioner in each room, a flat-screen television, a microwave and an electric stove - speaks to the gap between India's dreams and its realities.

The power cuts had thawed the chicken sausage in her freezer and she would have to throw it away in case it had spoiled. She did not dare use her electric oven, for fear that the power would go out in the middle of baking.

With no television, her 10-year-old son has been so bored that he took out his old cricket bat and ended up putting a ball through the kitchen window. Her daughter, 13, has had to study by flashlight. This summer, Tandon said, the family will have to choose between buying a generator and going on vacation. "We're living in the dark ages," she said.

For all her suffering, a reminder of the other India came earlier in the week, when her mother called from her hometown in rural north India and said she had had electricity for just one hour during the day.

In part because of these limitations, Indians are, for now, relatively conservative consumers of energy: about 600 units per capita per year, or one-fifth that of a typical American. But that will certainly increase as Indian desires reach those of the wealthy Western countries.

A recent report by McKinsey Global Institute frothily predicted a fourfold increase in consumer spending by 2025, vaulting India, as it said, "into the premier league among the world's consumer markets." McKinsey forecast that India would surpass Germany as the fifth-largest market in the world.

Driven by the needs of plenty, India has stepped up power generation in recent years at the pace of about 6 percent a year. It is a pittance compared to what neighboring China adds on each year and in any case insufficient to keep up with India's galloping demand.

The government has promised electricity connections for all - which means access to the grid, not round-the-clock power - by 2009. That is a target that does not seem plausible at current rates of power generation.

The development of power plants, meanwhile, is constrained by a lack of access to land, fuel and water, all of which a power plant needs in large quantities. The power grid remains weak.

In Gurgaon, for instance, transformers routinely blow out because of heavy loads. Voltage fluctuations damage electrical appliances of all sorts.

What the state cannot provide efficiently, many take for themselves. The World Bank estimates that at least $4 billion in electricity is unaccounted for each year - that is to say, stolen. Transparency International estimated in 2005 that Indians paid $480 million in bribes to put in new connections or correct bills.

The country's energy needs are one of the government's main arguments for a nuclear deal with the United States, which would allow India to buy reactors and fuel from the world market.

But even if the deal goes through, it would lift nuclear power, now at 3 percent, to no more than 9 percent of India's energy supply, said Leena Srivastava, executive director of the Energy and Resources Institute, a nongovernmental research group.

Similarly, in the coming years, alternative sources of energy, like wind, are expected to double, but to no more than about 8 percent of supply.

Coal will continue to dominate power generation and already more than a third of India's coal plants do not meet national emissions standards.

For Indian business, coping with chronic power shortages is a part of the cost of business.

At Tata, company managers took pains to say that power shortages do not hinder their ability to meet deadlines for their clients.

"The work as such does not suffer," said Gurinder Virk, assistant general manager. "We have sufficient stocks of diesel at all times." Behind the building, three generators purred as a sweltering evening descended. A 2004 World Bank survey found that 60 percent of companies in India have such facilities.

Still, construction here surges ahead. With few exceptions, there are little to no efforts to reduce power consumption, beyond the use of low-energy light bulbs. Gurgaon is dotted with buildings that are effectively curtains of glass, soaking up the searing summer heat.

"It's good for New York, not Gurgaon," was the verdict of Niranjan Khatri, a general manager with ITC, an Indian conglomerate whose office tower here is one of the few to comply with green building codes.

Across the highway, the nearly completed Ambi Mall promises one kilometer of shopping on each floor. Next to it, a billboard for the Mall of India promises an even bigger shopping center, one that will put India on the "global retail map."

Never mind that Gurgaon does not have a sewage treatment plant of its own or that the already existent Metropolitan Mall burns an average of 6,000 liters of diesel a day to run its generators during power cuts.

Farther south, in Nirvana Country, there are only generators. The 800-unit complex of row houses and apartment blocks, still under construction, is not even connected to the public electricity grid. It swallows 6,000 gallons of diesel each week to meet its needs - and that with only a fifth of its units occupied.

It was unclear how the power needs will be met once it reached full occupancy, said M.K. Pant, a retired army colonel who is now Nirvana's estate manager. "There's nothing in the files," he said. "There's nothing in the thinking also."

No matter. Newspaper advertisements for Nirvana Country promise "air conditioning in all rooms."

Wednesday, May 09, 2007

Book Review - The Monk Who Sold His Ferrari

Author - Robin Sharma.

To begin with, I liked the book - though not the entire part. In general I liked the concept but at some places it becomes boring and impracticable. Overall, I would recommend it especially for those who live a fast paced life.

To go into the details, its a story of a highly successful lawyer. In the middle of his glorious career, he faces a heart attack. Its a result of a hectic routine and complete lack of caring for health. He uses this event as a blessing in disguise and goes to the East looking for Peace of Mind - This is the part that does not make sense. I think that its only because the author is Indian that the lawyer comes to India - another reason might be to woo the Indian readers :-)

But once on a visit to Nirvana, this lawyer learns some techniques of quality living. He then comes back and passes on the knowledge to an ex-colleague. The part that I liked the most was the list of 10 rules for radiant living -

1. Ritual of Solitude.

2. Live nourishment - Eat healthy food. Though I don't quite agree with the concept of eating veg because I love Chicken and Mutton :-)

3. Physical nourishment - Daily exercise

4. The Ritual of a Congruent Character - To build a morale and conscience and to envision a mission for life

5. Abundance of Knowledge - In short the habit of reading (good!) books. "He who doesn't read good books has no advantage over those who cannot read them"

6. Self introspection / reflection

7. The Ritual of Music

8. The Ritual of the spoken word - e.g. Some mantras or some Pledge etc.

9. The Ritual Of Early Awakening

10. The Ritual of Simplicity

If taken seriously, the book has the potential to make a real impact on your life.

The thing that I loved the most about the book was its name. Its a great idea to name something like that. When you hear the words "The Monk Who Sold His Ferrari", You immediately start thinking about - How did a Monk own a Ferrari? Or How did a Ferrari owner become a Monk, and Why the hell did he sell it? But its a very good way of capturing a reader.

Cheers,
- Tosh

Monday, March 12, 2007

Cricket World Cup

Who will win?

I don't care. All I want is Australia to loose. Because no matter how fascinating it might be to watch them play well and win, it is even more satisfying when someone else gets on top of them. Its a question of whether or not their arrogance will dominate their skills.

Over to the islands...

Cheers,
- Tosh

Tuesday, February 20, 2007

India Not Shining?

There have been a lot of dissapointing news for the nation in the past month or so:

1. Farmer suicides -> Despite government interventions, farmers in Vidarbha and elsewhere continue to kill themselves. Reasons? Governments not doing enough to solve their problems. Aam admi's party no longer cares for the poor. Solutions? Eliminate private money lending. Do away with BT Cotton and similar sinister schemes. Waive farmer loans in a manner similar to that of waiving industrial loans.

2. Inflation -> Spiralling costs of essential commodities. Reasons? Might be out of the control of the government. Solutions? No short term remedy in sight. Medium and long term controls already in place. Effects? The poor keeps getting poorer. Who is responsible? Of course the government, they must have a vision to foresee such damaging scenarios and mitigation plans for quick fixes.

3. Energy Shortage -> Power cuts and load shedding hours increase to alarming levels - more so - in the rural areas. Effects? Unemployment, Lack of infrastructure leading to slowdown in the fast growing economy. Reasons? Lack of long term planning by past governments. Solutions? Continuous long term planning and immediate shift to re-usable energy resources wherever possible.

4. Terror attack on the most sensitive train the country. If this is the condition for the train which is supposed to be the most secure, then what is the status of all other trains? India continues to be the softest terror target in the world. Reasons? No control on infiltration. No effective anti terror central law. Minority appeasement policies of central and UP government with an eye towards cheap electoral gains in the coming elections.

Tough times...

Tuesday, February 13, 2007

Favourite TV show on air - India Tonight with Karan Thapar on CNBC TV 18

India Tonight is an intense and thought provoking show that runs on CNBC TV 18. The anchor Karan Thapar talks to 2-3 guests on a topic every night Monday to Thursday at 10.30 pm India Time. http://www.tv18online.com/cnbcTV18_shows.html

Its a must watch for them who have any interest in politics of the nation. For me, it is the best program on show currently on TV. An added attraction - It has only one break!

Watch it and it will keep you thinking about the topic at least 5 minutes after the show ends.

Karan's famous ending line every night is - "And if you have been, then Thanks for watching. Good bye and Good night".

Cheers,
- Ashutosh

Tuesday, February 06, 2007

Current Reading - The Monk Who Sold his Ferrari

by Robin Sharma.

http://www.amazon.com/Monk-Who-Sold-His-Ferrari/dp/0062515675

Cheers,
- Tosh

Saturday, December 16, 2006

Tuesday, December 12, 2006

Nice article about fiscal deficit, inflation, economy etc.

Picked up straight from www.equitymaster.com

Fiscal deficit: Grim consequences...


While India's GDP has been growing at a strong 8% per annum rate, there are several factors that can derail this growth process in the long run. Bad governance, poor physical and social infrastructure, fiscal deficit, you name it! Out of these, while a lot has been discussed and debated on poor governance and sorry state of infrastructure, the consequences with respect to the high fiscal deficit of central and state governments and the burden that these impose on the overall financial and monetary system, can be really grim.

While it is not necessary that fiscal deficit should always be a matter of concern especially for developing economies like India, if unchecked, the same can lead to grim consequences. In this write-up, we shall examine the problems associated with a high level of fiscal deficit and the likely impact of the same on the economy.



What is fiscal deficit?
In simple terms, fiscal deficit is defined as the difference between government's expenditure and its total receipts. In other words, because the government fails to match its expenses with what it earns, it has to resort to 'deficit financing' by borrowing in various ways.

One important argument against fiscal deficit is that it results in the crowding out effect i.e., the government 'crowds out' private investment leading to a possible hike in interest rates. To put things in perspective, if the government garners a higher share of the borrowings from the market, the private sector will consequently have a lesser share. This will lead to a rise in interest rates and a higher cost of capital for private investors. On the inflation front, a high fiscal deficit enhances the inflation of an economy. The reason is that government's borrowings to meet its expenditure lead to a rise in the money stock in the economy without a consequent growth in capital productivity. This is said to have an inflationary effect as few goods are chased by more money. This is especially so, if the borrowings of the government are utilised for the financing of the deficit rather than for accelerating the output.

Therefore, the crux of the matter really is the composition of the government expenditure. Are the government borrowings utilised more for productive purposes? The answer is 'no'. As can be evinced from the table below, a larger chunk of the government expenditure is being diverted towards non-plan expenditure such as interest payments and subsidies. This means that the government is effectively borrowing to pay off debts and the interest on the existing debt, further compounding the fiscal deficit problem.


Expenditure: Is it productive?
FY01 FY02 FY03 FY04 FY05 FY06
Total expenditure (Rs bn) 3,256 3,623 4,132 4,712 4,977 5,087
(% of GDP) 15.4% 15.9% 16.9% 17.1% 15.9% 14.4%
Plan expenditure (% of GDP) 3.9% 4.4% 4.6% 4.4% 4.2% 4.1%
Non-plan exp (% of GDP) 11.5% 11.4% 12.3% 12.6% 11.7% 10.3%

Source: CMIE
To conclude...
As mentioned earlier, a fiscal deficit is not a bad sign, if the government is utilizing the borrowings for productive purposes. Given the fact that India faces huge constraints on the infrastructure side, the focus has to be on development of roads, airports, highways, and curbing power shortages. This is more so if the current level of GDP growth has to be sustained. While the strong forex reserves position and GDP growth rate has ensured that India does not re-visit the 1991 crisis again, the government needs to understand that prudent utilisation of resources will go a long way in charting and sustaining India's economic health in the future.

Friday, November 10, 2006

My favourite quote for the month

"There can be no greater calling than public service" by (FDR) Franklin D. Roosevelt - President, United States of America.

Picked up from - [My current reading] - The Prodigal Daughter by Jeffrey Archer. I am loving it. Highly recommended - especially for those with interest in politics.

Cheers,
- Tosh

Sunday, November 05, 2006

Review - Punjabi Dhaba in Cambridge, Massachusetts - USA

Today I had been to the Punjabi Dhaba located at 225, Hampshire Street, Cambridge. Here's a review of the restaurant based on my experience.

Positives:

1. Variety of Punjabi dishes.
2. Good location - Easily accessible even by the public transport. It is located at the intersection of the Cambridge street and the Hampshire street. It is just besides the "Inman square" stop of the Bus Route # 69 which runs from the Harvard Square to the Lechmere station.
3. Prices are comparatively low. There are many other Indian places to eat around here but this one is really cheap as compared to the others I have seen.

Negatives:

1. The place is just too small. There are just a couple of tables on the ground floor and even these are not spacious at all. There are a few more tables on the 1st floor but to take your plates and climb upstairs is not a good option.
2. The taste was not that good. I had Alu Gobi and Parathas. The curry had too many hot spices, though it was not spicy. I could not finish the curry because I got bored with it after a few bites. It had too much masala in it. The parathas were hard to chew and the curd had some additive which made it impossible to eat for me.
3. There is no buffet.
4. The food is not ready. They prepare it after you give the orders. So be ready to stand in a crowd waiting for your food to be cooked for at least 15 minutes.

Overall, I think it is a nice place for some college students to go and eat at a relatively cheaper rate but if you are looking for a peaceful place with good food and are willing to pay a little extra, then please avoid. The other similar but good places around are: Kathmandu, Diva and Tanjore.

Cheers,
- Ashutosh