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India's Development Paradox: While ISRO's Breaking Records, Many Villages Don't Even Have Power

The solution lies in harnessing private innovation to end deprivation.

03/03/2017 2:42 PM IST | Updated 06/03/2017 9:48 AM IST
Ajay Verma / Reuters

When the Indian Space Research Organisation launched 104 satellites into orbit on a single rocket, it set a record that inspired the envy of its Western space-faring counterparts. ISRO surpassing its international counterparts is no surprise: India is a global leader in producing scientists and engineers, and major companies in the United States rely on Indian émigrés to carry out research and development work. If anything, India's brainpower exports have become too successful, as the backlash over the H-1B visa program in America shows.

India many have a thriving technology corridor, but it also has the world's largest population living without electricity.

That prowess is also why global tech companies have flocked to Bangalore and turned the Indian technology sector into a $150 billion industry. That companies from several countries, including the US, Switzerland, Israel and the Netherlands entrusted their satellites to be launched by the ISRO speaks volumes about the technological knowhow and ambition that exists in India.

And yet, these intellectual strong points mask the cruel contrasts between India's achievements and its less enviable records of poverty and underdevelopment. India many have a thriving technology corridor, but it also has the world's largest population living without electricity. The realities of India's development drive are simple, and they are harsh: where the private sector plays host to some of the world's greatest innovators and entrepreneurs, the public sector struggles to meet the needs of 1.2 billion people. A better regulatory environment could help the government handle the task of meeting India's infrastructural needs.

As I have previously mentioned in this space, individual innovators are hard at work solving the problems of the national energy crisis. Some of the industry's most recent successes have come in the effort to make coal less CO2 intensive, a critical development for a power grid designed almost exclusively for coal power. The Tamil Nadu industrial plant that became the first in the world to capture carbon dioxide and use it as an ingredient in the manufacturing of chemicals received nearly as much international attention as the ISRO launch, namely because the struggle to develop viable "clean coal" solutions has long bedevilled not just India but the world's richest countries.

Where the private sector plays host to some of the world's greatest innovators and entrepreneurs, the public sector struggles to meet the needs of 1.2 billion people.

The chemical used to capture the CO2 as it rises up the chimney of the coal-fired burner is now a patented invention of two young Indian chemists. Unlike the engineers at ISRO, the chemists had to go to the United Kingdom for the funding they needed. All the same, their work could not come at a better time: India is set to overtake the US in its consumption of coal by 2030, meaning any technology that limits the CO2 emissions from coal burning is one that should be welcomed. After all, for all the government's investments in renewable energy, coal will still account for around 70 percent of the nation's energy for the next decade.

If Narendra Modi hopes to lift 240 million people out of energy poverty while keeping India's carbon emissions promises, eliminating the emissions from outdated coal plants and integrating these new technologies needs to remain a top priority. The Ministry of Power and utilities like the NTPC are following Piyush Goyal's lead in building supercritical coal plants to replace facilities that are over a quarter-century old. According to Goyal, the 25-40 GW worth of old thermal plants that need to be taken offline emit 10-12 times as much pollution as the newer models; removing them from the power grid will have an even greater impact in reducing particle and CO2 emissions than India's 100 GW solar benchmark.

The energy sector, though, is not the only one where India's existing infrastructure is outdated to the point of actively hindering the economy. India's transportation network is best known abroad for Indian Railways (IR), the "lifeline of a nation" which is impressive in scale but terrifying in terms of maintenance and public safety. IR's lines were first built by the British over a century and a half ago. While new trains have regularly been introduced over the past decades to deal with the crush of riders, a lack of funding has left its massive network of outdated rolling stock from being properly maintained.

Once safe in the knowledge that government is working to facilitate rather than inhibit the private sector, entrepreneurs can... make their individual projects work to India's collective benefit.

As a result, deadly rail disasters have become disturbingly common: whether as the result of sabotage or broken rail lines, two Uttar Pradesh train crashes killed 151 people late last year and January's Andhra Pradesh derailment killed 40 more. While the existing network is starved for funds, the Modi government's investment plans have focused on the planned Japanese-built high-speed rail line between Mumbai and Ahmedabad. There is, of course, a way to pursue both necessary maintenance and future possibilities at the same time: opening the door for the private sector to take over some of IR's massive responsibilities and end the inefficient Ministry of Railways monopoly, as the Bibek Debroy committee recommended in 2015.

In terms of both energy and transportation, the trend is quite clear: where the government falls short, the private sector is brimming with entrepreneurial, scientific and engineering talent that can make up the gap. With the right regulatory conditions in place, the government could allow these private sector operators to make up for its shortcomings on a larger scale. At present, this is not the case—private energy companies, for example, have been reticent about entering the market for fear that that eventually they will be flattened by the roll-out of the government electrification scheme. Private rail companies, for their part, remain frozen out by the government's monopoly.

This lack of coordination has only served to leave hundreds of millions of consumers and travellers in limbo. Simple reforms could help solve this mismatch: guaranteed compensation for private companies who make way for government suppliers in the energy market, for example, would constitute a simple fix that would accelerate the process of rural electrification. Once safe in the knowledge that government is working to facilitate rather than inhibit the private sector, entrepreneurs can step into the limelight and make their individual projects work to India's collective benefit.

ISRO Launch

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