Talks will Turn into Ac­tion

The Economic Times - - Economy -

What would be the eco­nomic pri­or­i­ties of the govern­ment? This is the first elec­tion in which there has been more talk of eco­nom­ics than pol­i­tics dur­ing the cam­paign. Modi high­lighted al­most all as­pects of so­cial eco­nomic de­vel­op­ment dur­ing his 500-odd ral­lies and in­nu­mer­able so­cial me­dia com­mu­ni­ca­tions. He talked about in­fra­struc­ture, agri­cul­ture, gen­der is­sues, ed­u­ca­tion, health­care. I think in the first few months of the govern­ment he will be able to con­vert these state­ments into im­ple­mentable poli­cies. This is also the first time that a three-time chief min­is­ter of a state will as­sume the of­fice of the prime min­is­ter. Hav­ing worked in all these sec­tors as a chief min­is­ter, he is fa­mil­iar with all as­pects. There­fore we should see in the short­est pos­si­ble time, a pol­icy on each of these. How can in­fra­struc­ture be re­vived?. Modi has talked about bring­ing en­trepreneur­ship and em­pow­er­ment to the fore, rather than doles and give­aways. He has demon­strated in his own state that what people need is de­pend­able and af­ford­able power and not un­re­li­able prom­ise of free power. I’m sure In­dia needs to cre­ate in­fra­struc­ture to the ex­tent of $10 tril­lion in three decades. It has to be paid for to make projects bank­able and vi­able. In­vest­ment must come from do­mes­tic sav­ings as well as from bud­getary sup­port but largely by pay­ment of rea­son­able user charges. Plus, bring­ing new par­a­digm of think­ing for in­fra­struc­ture de­vel­op­ment is es­sen­tial. We are prob­a­bly the only coun­try in the world which will cre­ate pub­lic in­fra­struc­ture through large pri­vate in­vest­ment of this mag­ni­tude. Providers of eq­uity and debt need com­fort that these should be vi­able projects. For that his new think­ing will serve the pur­pose. Can the power sec­tor be re­vived? Thanks to the Elec­tric­ity Act 2003, as well as the blue­print for in­te­grated power sec­tor de­vel­op­ment, made dur­ing my ten­ure as the power min- is­ter, we have leg­isla­tive and pol­icy frame­work to take the power sec­tor for­ward. Un­for­tu­nately, last decade we did not act on it to our own peril. We had launched for the first time in In­dia, dis­tri­bu­tion re­forms, to make power sec­tor com­mer­cially vi­able. The mess in fuel sup­ply could be sorted out very quickly so that stranded projects get op­er­a­tional and the plant load fac­tor (PLF) in­creases quickly. Both will re­sult in big pay­back to the bank­ing sys­tem be­sides get­ting more elec­tric­ity to the grid. What about roads and tolls? Toll has to be re­lated to the ca­pac­ity to pay by the users as well as the rea­son­able pay­back for the fi­nanc­ing in­sti­tu­tion. We need to in­tro­duce new fi­nanc­ing mech­a­nism. When the life of the road is 25 years, I don’t see any rea­son why the fi­nanc­ing in­sti­tu­tion should fi­nance it in a way that money should be re­paid in 5-7 years. They have 5-7 years de­posits, so they want to fi­nance it only for 5-7 years to avoid as­set-li­a­bil­ity mis­match. This puts un­nec­es­sary strain on the de­vel­oper, ne­ces­si­tat­ing him to charge higher user charges for quicker pay­back. We thus should in­tro­duce new in­stru­ment of fi­nance, match­ing with the life of the projects. Your thoughts on link­ing rivers in the coun­try? We need a com­pre­hen­sive water­man­age­ment strat­egy con­sid­er­ing that agri­cul­ture, man­u­fac­tur­ing, ser­vices, be­sides all the so­cial sec­tor de­vel­op­ment full de­pends on it. For that we need both de­mand and sup­ply side in­ter­ven­tions, and a bot­tom­sup ap­proach be­sides top-down. Hon­ourable Supreme Court has di­rected the govern­ment to im­ple­ment in­ter-link­ing of rivers project. I had sub­mit­ted very com­pre­hen­sive re­ports to the Supreme Court which was mon­i­tor­ing this project be­cause of a PIL. I had started stud­ies to deal with en­vi­ron­ment forests, so­cial, po­lit­i­cal, eco­nomic le­gal, tech­no­log­i­cal and fi­nan­cial vi­a­bil­i­ties of these projects, in­volv­ing top na­tional ex­perts. Is there a con­flict be­tween con­ser­va­tion and de­vel­op­ment? The en­vi­ron­ment min­istry’s pri­mary job should be to pro­tect the eco­log­i­cal cap­i­tal of the coun­try. No coun­try that has ever de­vel­oped in the world which has not lever­aged on its hu­man and eco­log­i­cal cap­i­tal. So, to de­velop In­dia, we need to tap this ecol­ogy with­out di­min­ish­ing the cap­i­tal. For that, we need sus­tain­able de­vel­op­ment. The min­istry has al­ways come un­der se­vere crit­i­cism. Thus we need com­plete trans­parency in its func­tion­ing. I had started the process of putting all en­vi­ron­men­tal clear­ances (and the de­ci­sion-mak­ing process) in the web­site. Eco­nomic de­vel­op­ment is a pri­or­ity too for the poor and thus the pop­u­la­tion and poverty both could be big chal­lenge to en­vi­ron­men­tal pro­tec­tion. En­vi­ron­ment is un­der siege due to lack of poverty and pop­u­la­tion growth. Should the govern­ment have an in­te­grated en­ergy min­istry? Narn­dra Modi, in my opin­ion, could be the first prime min­is­ter who has a clear vi­sion on en­ergy. Gu­jarat has de­vel­oped the largest so­lar park in the world. Gu­jarat is also home to one of the fastest grow­ing wind en­ergy. Gu­jarat could prob­a­bly be the first state try­ing to har­ness tidal en­ergy. Modi has al­ways been talk­ing about en­ergy se­cu­rity as a na­tional pri­or­ity. If we con­tinue to im­port oil and gas and now coal, we could never be truly in­de­pen­dent, and thus we need in­te­grated strat­egy. The call of hav­ing an in­te­grated min­istry can be taken by the PM him­self. How can the min­ing sec­tor, es­pe­cially coal , iron ore be re­vived? Min­ing is a nec­es­sary evil. No eco­nomic ac­tiv­ity can be car­ried out or no mod­ern liv­ing is pos­si­ble with­out min­er­als be­ing ex­tracted. Any form of travel other than walk­ing; any source of com­mu­ni­ca­tion or any mod­ern med­i­cal care is im­pos­si­ble with­out equip­ment and ac­tiv­ity that are car­ried out through a pri­mary min­eral. Even bul­lock-cart wheels are made out of iron ore. At the same time min­ing causes huge costs to en­vi­ron­ment, there are so­cial is­sues as people are dis­placed, and it can dam­age to un­der­ground wa­ter if not done prop­erly. The chal­lenge is how to do min­ing avoid­ing all these at­ten­dant costs. We need a mod­ern ap­proach, us­ing bet­ter than the best in the world tech­nolo­gies and a trans­par­ent su­per­vi­sion and con­trol over min­ing op­er­a­tions to bring about eco­nomic de­vel­op­ment sans these is­sues. We need to share some of the roy­al­ties from these min­er­als, not only with the states but with the lo­cal com­mu­ni­ties as well.

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