“One of the most challenging

problems faced by world is

sustainability of the economic

development process while ensur-

ing equitable development of

social capital and limiting dis-

turbance of the environmental

resources. Quality of education

which inculcates inclusive mind-

set is going to be the key driver

for such sustainability. Invest-

ments in innovation is going to

enhance the demand for quality

education”

Dr.Surajit Mitra

Director & Vice Chancellor IIFT

Need of Technological Intervention in Indian Energy Sector

Centre for International Trade in Technology

Indian Institute of Foreign Trade, New Delhi, India

January 2016 Volume 2 Issue 1

Tech-n-Trade

eNewsletter

Inside this issue:

Need of Technological Inter-

vention in Indian Energy

Sector

Pg.1

Incorporating Economic

Development into Smart

Cities Program

Pg.1

Goods and Service Tax

(GST) : The India Advantage

Pg.4

From 2000 to 2012, India's primary energy

demand CAGR was 4.6% as against 2.45%

globally. It was 7.85% for China & -0.5% in

case for USA. The source wise break up of

reserves as a percentage of global reserve, pro-

duction as a percentage of global production

and consumption as percentage of global con-

sumption for various energy sources in the year

2013, is depicted in the table below:

Energy Source

Reserve

Production

Consumption

Oil 0.3% 1% 4.2%

Gas 0.7% 1% 1.5%

Coal 6.8% 5.9% 8.5%

Wind & Solar - 3% -

Contd...page 2

Incorporating Economic Development into Smart Cities Program

Recognising the need to improve the state of

urban infrastructure and to kick-start the econo-

my, the Government of India (GOI) has launched

many ambitious programs. Three main programs

out of these are:

100 Smart cities program

Development of Industrial Corridors (like

DMIC)

Make in India

The GOI as well as real estate practitioners asso-

ciated with the programs (or otherwise) have

written extensively about the merits of develop-

ing smart cities, the need for smart infrastructure,

international parallels etc. Some sociologists on

the other hand have pointed out the negative

externalities of smart cities, including division of

cities into ‘haves’ and ‘have nots’, and the social

tensions likely to arise out of these, if not ad-

dressed now, in the smart city planning. Most of

the discussion on smart cities though, has been

focussed on their smartness, for example e-

governance, smart infrastructure, safe city infra-

structure through mining into big data, video

analytics and the like. IT advising outfits, includ-

ing IBM and Cisco, both leaders in adding smart-

ness into cities, have been putting their capabili-

ties on display in this area. Relatively less atten-

tion has, however been paid to the ‘City’ aspect

of smart cities program. This would include fa-

cilitating economic activities within these cities

with a view to improving the economic status of

the city residents.

Cities all over the world tend to develop around

Contd...page 3

Page 2

Tech-n-Trade

Need of Technological Intervention in Indian Energy Sector contd..

It is evident from the data above that there is

a great mismatch between our reserves,

production and consumption. Adopting

newer technologies at various stages of

energy cycle seems to be the most logical

way to bridge this gap.

The McKinsey Global Institute’s research '

India’s technology opportunity: Transform-

ing work, empowering people' states that if

India Moves purposefully to harness energy

technologies in the coming decade, the com-

bined impact could be $50-95 billion per

year for the economy in 2025.

Furthermore, decoupling of economic

growth with the fossil fuel driven energy

uses are essential in view of agreements at

UNFCC15 at Paris. We will be required to

meet our commitment of CO2 emission

reduction, so Energy intensity of India’s

GDP growth will have to be reduced. This

will require adoption of energy efficient

technologies.

Technology in energy sector

A complete understanding of technology in

energy sector would require a holistic ap-

proach wherein entire value chain of energy

sector is looked at, namely at source, gener-

ation, transmission and finally energy con-

version at consumption centers.

Source

Technological intervention and deployment

is needed to map, estimate, development

and production from conventional & uncon-

ventional energy resources.

Newer technologies like basement and ultra-

deep drilling from difficult and unconven-

tional oil and gas reserves like deep water

reserves, high pressure reserves and high

temperature reserves would be required to

harness the fossil fuels.

Harnessing of unconventional fossil fuels

like Shale Oil and Gas would need techno-

logical interventions like multistage hydrau-

lic fracking.

Processing of large amount of data required

for geo technical studies could be facilitated

by new data analysis tools. Information

technology can also be applied to arrive at

the confirm sources of oil & gas combined

with high resolution imaging and geo-

mechanical studies. As this technology re-

quires lot of water input, it is pertinent for

us to develop water free fracking technology

or the water efficient technology. Alternate-

ly, we need to develop and deploy cost effi-

cient water treatment technologies.

It is required to set up coal fired units with

ultra-supercritical parameters targeting effi-

ciency comparable to best available technol-

ogy in the world. A shift to supercritical and

ultra-supercritical technology will be an

important way to limit the rise in energy-

related CO2 emissions and mitigate some

environmental impacts.

Currently there are no commercial nuclear

power plants in operation in Southeast Asia,

but, there has been interest in developing

nuclear power technology. Government has

increased its focus on Nuclear Energy

though resistance are coming from various

social sectors.

Generation

It is desired to lay emphasis on efficiency of

electricity generation, by adopting super-

critical technology with improved steam

parameters up to 247 Kg/cm2/565ᵒC/593ᵒC.

The improved rate at improved steam pa-

rameters will result in approximately 5 %

gain in efficiency over the efficiency of

conventional sub critical units.

Steam parameters may be further improved

using newer technologies to 260-270 Kg/

cm2/565 ᵒC/593ᵒC-600ᵒC. Improvement in

steam parameters is expected to give 3.7%

efficiency improvement over conventional

supercritical plants.

Ultra-super critical technology may be

adopted or may be developed indigenously

which may give enhanced efficiency of

approx. 45% and about 15-17% less CO2

emission as compared to 500 MW sub-

critical units.

It is needed to adopt efficient technologies,

system and practices including combined

cycle gas-fired power stations, Distributed

Digital Control & Management Infor-

mation System, High Voltage Direct Cur-

rent transmission, Dry Ash Extraction and

Disposal, Mega size Switchyard, Ash Wa-

ter Recirculation System, Liquid Waste

Management System, Performance Analysis

and Diagnostic Optimization, Tunnel Bor-

ing Machines and Super Critical Technolo-

gies.

Hybrid solar thermal power plants in which

solar heat is integrated along with feed

heaters in the turbine cycle for conver-

sion of solar heat to electrical power with

the help of existing steam cycle, will re-

duce coal consumption with corresponding

reduction in CO2 emissions.

Normally, solar plants are land intensive

and due to infrastructure developments and

increasing food production requirements,

pressure on land uses for solar and biomass

production is ever increasing. In this regards

innovative solution like development of

offshore solar and wind plants will require

lot of technological interventions. Seaweed

bio mass growing technology can also be a

solution. Technologies like Poly-silicon

manufacturing will help in reducing depend-

ence on imported solar panels.

Transmission

In India energy demands are scattered and

far away from the generation centers. This

implies high cost of transportation in case of

fossil fuels and high transmission and distri-

bution losses in case of electricity.

The technological solution to the issue is

decentralized generation of power, avoiding

Contd...page 4

Page 3

Tech-n-Trade

Incorporating Economic Development into Smart Cities Program contd...

an economic activity. We live wherever we

can find work to sustain us. Old cities de-

veloped along river banks, when agricul-

ture was the main economic activity, and

the rivers provided support conditions for

this economic activity. When trade and

industry became large economic activities,

new cities developed near trading hubs

(Dubai), ports (Mumbai, Chennai and Kol-

kata) and centres of industrial activity

(Jamshedpur). In India and other develop-

ing economies, where government was a

large influence on economic activity and

also the largest spender, central and state

capitals have also developed into large

cities. In the period after the year 1991

services specially IT and ITES have devel-

oped into large employment generating

economic activities and have provided

growth to cities like Bengaluru, Gurgaon,

Chennai and Hyderabad, to name a few.

The Smart cities program therefore will

need to focus on economic development of

select cities as that indeed is the reason for

existence of the cities and the GOI initia-

tive.

Another reason for the need of economic

development is the need to enable the city

residents to pay for the enhanced infra-

structure. The infrastructure developed to

make the cities smart will have to be paid

by its users, i.e. the city residents. The cost

will be in two parts, the initial installation

and the periodic post installation mainte-

nance and operations cost. Our city admin-

istration bodies are known for their weak-

ness in levying and recovering appropriate

usage charges owing partly to their need to

be viewed with a positive popular image

and partly to the historical mindset where

basic infrastructure provision and its

maintenance was seen to be a government

responsibility. The results of this mindset

are seen in our inability to effectively main-

tain, and indeed upgrade the city infrastruc-

ture from time to time in all major cities.

The collection of user charges doesn’t even

cover a fraction of the amounts actually

spent on maintenance. This in turn leaves

the local and municipal bodies bankrupt

and unable to take replacement and up-

gradation of the infrastructure.

It is therefore important for us to define a

system for operation, maintenance and up

gradation of infrastructure for the smart

cities to enable maintainability of our up-

coming smart cities ensuring that the local

bodies are able to levy and recover appro-

priate user charges and equally importantly,

the user residents have the economic ability

to bear the user charges on an ongoing

basis.

If the infrastructure development under the

smart cities program is indeed aimed at lick

-starting the economic growth, then the

economic planning for cities needs to pre-

cede the infrastructure planning, and not

follow it. If the economic growth model

assumes development of city and regional

clusters then interconnectivity between the

cities and the region will become para-

mount design criterion. Also if the econom-

ic activity focusses on a specific product

(handicrafts, for example) then the infra-

structure needs to be designed for promo-

tion of that specific activity (for example

multi-modal logistics for export / import

intensive activity).

Besides infrastructure, investment into our

cities needs to go into making them com-

petitive domestically as well as internation-

ally. A report titled” Competitiveness of

cities “by World Economic Forum in Au-

gust 2014 noted the initiatives undertaken

by the cities of Ahmedabad, Surat and Hy-

derabad for their efforts in making the cit-

ies more competitive. The report suggests a

four point agenda for city competitiveness

including improvements in (1) Institutions,

(2) Policies to regulate business environ-

ment, (3) Core physical infrastructure and

(4) social infrastructure / social capital.

Similar work is being undertaken by many

other thinkers in the city competitiveness

area. The city and state administration

needs to incorporate this agenda into the

smart cities framework for the cities to be

successful.

Finally, the smart cities program, as the

name suggests, is a city based program.

Various studies internationally have found

the positive, synergistic efficiencies that

city regions or product /industry specific

clusters can generate for the participants. A

natural next step would therefore be to

develop smart clusters or smart regions.

The DMIC and other such corridors also

offer opportunity to develop industrial and

other economic activities along their path.

Make In India program intends to develop

India as a manufacturing destination. There

is an opportunity to integrate these separate

identities (smart cities, industrial corridors

and make in India) to make a unique, com-

pelling path to economic development of

citizens.

A City exists to serve her citizens. When

the citizens are economically empowered,

the Smart Cities we are making today will

continue to retain their smartness. As Jane

Jacobs (1916 – 2006) an American-

Canadian journalist, author, and activist

best known for her influence on urban stud-

ies rightly said “Cities have the capability

of providing something for everybody, only

because, and only when, they are created

by everybody.”

Contributor:

Ramkrishna has over 27 years of experience spanning across key areas such as Sales and Marketing, Business Development, Strategy and General Management. He has held key leadership positions in large Indian groups including Real Estate, Construction and Infrastructure compa-nies. His areas of experience include all parts of value chain in commercial office, residential, retail and integrated township / SEZ property developments. An engineer with a post graduate diploma in management from IIM Ahmedabad, he is an independent consultant and writes on Strate-gy, Real Estate and Urban Development issues. (The views expressed here are authors own views only. )

Page 4

Tech-n-Trade

Need of Technological Intervention in Indian Energy Sector contd..

transmission losses and efficiency in its

uses.

Technological intervention in solar would

be to reduce storage cost as storage typical-

ly doubles or triples the total cost of a solar

solution. Large scale solar and wind farms

can be connected to smart grids. Off grid

solutions like roof top solar plants, small

scale hydro plants, small isolated wind

turbines and small size biomass based plant

would also be helpful.

Technology of smart grids will allow gath-

ering real time data about energy uses. It

will also help in monitoring pilferage of

energy surges in the grids over drawing and

consequential outages. This will help in

optimal utilization of existing generation

capacity and will reduce in reallocation of

fossil fuel to some other sectors, which is

being utilized for localized power genera-

tion (using diesel generators).

Grid reliability will increase by efficient

demand management and matching with

real time generation data. Innovation in

technology is needed for demand side inte-

gration, energy storage and smart grid in-

frastructure.

Consumption

Shifting to clean energy and achieving

more efficient energy production and con-

sumption can provide energy security

against future market uncertainty. Deploy-

ment of innovative technologies that ex-

ploit clean domestic sources would reduce

dependence on resource exposed to market

fluctuations.

Promoting energy efficient technologies

across residential and office accommoda-

tions (lighting, appliances and air condi-

tioning loads), energy intensive sectors like

chemicals and refining, transportation and

even power generation itself.

Energy storage technologies will also be

required for using non-conventional energy

into transportation sector effectively and

efficiently. Efficient storage technology

providing cost effective small solar kit of

collector and battery can effectively meet

the lighting requirements of Indian rural

masses.

Smart meters enable demand management

schemes, peak pricing and theft detection

to reduce losses. Energy- saving measures

such as use of CFL lighting and energy-

efficient pumps; raising efficiency of pow-

er plants and transportation sector will also

require help of technological interventions.

Conclusion

Energy technology innovation is central to

meeting climate mitigation goals while also

supporting economic and energy security

objectives. Deploying a mix of proven and

breakthrough cost effective technologies

will make energy system sustainable.

Contributor:

Rakesh K. Mishra has more than 18 years of experience in the areas of human resource management, project management, design and engineering and operation and maintenance of petroleum pipelines. He has been work-ing with Indian Oil Corporation Lim-ited, top rank company from India in Fortune 500 list. He is PGDM from Indian Institute of Management (IIM), Lucknow in Finance and Strategy, M. Tech from IIT, Kharagpur in Industrial Engineering and Management.

(The views expressed here are authors own views only. )

The Constitution of India provides three

tier taxation regime, namely Union, States

and local taxation by Municipal corpora-

tions/Panchayats. Each State/UT has its

own sales tax regime. Consequently there

was no uniformity in rates of taxation on

sale of goods. This in effect was leading to

various trade distortions and trade diver-

sions, wherein each State in order to attract

the trade would lower the tax rate. Later, in

the first decade of this century, States to-

gether decided to opt for a more efficient

taxation regime in the form of Value Added

Tax (VAT). All States agreed to adopt

VAT in 2005 and in next three years all

States had implemented VAT regime.

The successful switch-over to State Value

Added Tax system in place of the erstwhile

Sales tax system has established that the

value addition based taxation principle, is

transparent and efficient indirect tax sys-

tem. VAT however remained specific to

each State and there would be no crossover

of input tax credit across states or between

Centre and States. There was a need to

achieve pan India unification of indirect

taxes. This formed the basis for a much

wider indirect tax reform attempt to intro-

duce a comprehensive national level VAT,

also called Goods and Services Tax (GST),

covering the entire production-distribution

chain, including goods as well as services,

and integrating multiple indirect levies, by

the Central and State Governments.

GST is a broad based, single, comprehen-

sive tax levied on goods and services at

each point of sale of goods or provision of

service, in which, the seller or service pro-

vider may claim the input credit of tax

which he has paid while purchasing the

Goods and Service Tax (GST) : The India Advantage

Contd...page 5

Page 5

Tech-n-Trade

Goods and Service Tax (GST) : The India Advantage contd...

Send your feedback or suggestions to headcitt@iift.edu

Centre for International Trade in Technology

Indian Institute of Foreign Trade B-21, Qutab Institutional Area, New Delhi– 16.

www.iift.edu

goods or availing the service. The final

consumer will thus bear only the GST

charged by the last dealer in the supply

chain.

Thus GST offers a transparent and com-

plete chain of set-offs, which will help

widening the coverage of tax base and im-

prove tax compliance. This will lead to

higher tax revenue and may result in low-

ering of tax burden.

Goods and Services Tax which is proposed

to be introduced in India in near future is

talked about as mother of all indirect tax

reforms and people cutting across all sec-

tions expect this reform as panacea to all

the taxation inefficiencies.

The benefits of GST can be discussed from

the point of view of different stake holders:

-

From the viewpoint of business and indus-

try this system is easy to comply with and

simple to understand. It provides relief

from blockage of capital in the form of

taxes. This can erase the competitive disad-

vantage of genuine dealers vis-à-vis unscru-

pulous ones, as this is inherently self-

compliant. They need not have interface

with multiple taxation authorities. Such a

system would also be aligned to the sys-

tems followed by an overwhelming majori-

ty of countries, exceeding 140 in num-

ber.

From the viewpoint of Central and State

Governments, the GST would be a simple

and easy to administer tax system. Its inher-

ent mechanism to check tax evasion will

control leakage of revenue due to Govern-

ments. This will also enable the States to

realize tax commensurate to consumption

within each State’s territory, without tax

payments to another State. This system

would enable the Governments to tax goods

and services in an integrated manner which

is extremely important in the present world

where goods and services are getting more

and more integrated. This would also pro-

vide a stable source of tax revenue, as it

captures the entire value chain.

From the viewpoint of the end consumer,

the tax would be transparent and propor-

tional to the value of the goods and services

procured / consumed, without multiplicity

of taxes and any cascading of tax. At pre-

sent there is Union Excise duty on manu-

facturing there after there will be CST and

again VAT levied over it. Thus there is tax

on tax also called cascading effect. This

cascading effect is removed by GST system

reducing the cost by 1-3%.

For the country as a whole, by providing a

level playing field to domestic producers,

GST has the potential of providing stimulus

to the economy. It has been established

there will be reduction in transaction cost.

World bank ranks India poorly in its Doing

Business Index, primarily because in India

a business has to spend lot of man hours in

multiple filing of tax returns almost double

of OECD and other Developed nations.

This multiplicity will be reduced under

GST hence transaction costs too will re-

duce.

For all this to happen it is essential that

enabling constitutional provisions must be

in place. A Constitution (Amendment) Bill

to this effect is hanging fire in Rajya Sabha.

Only when it is passed by both Houses the

GST Bill would see the light of the day.

Contributor: Mr. Arvind Kumar is a Civil Servant, IAS (Allied) Services (1997), has worked in several ministries. He is on the BOD of many Public Sector Enterprises like HPC-its subsidiaries HNL, NPPC, JPML etc, NEPA paper Mills, BBCIL etc. Shri Arvin Kumar has Masters Degree in Economics from Delhi School of Economics, MBA (Marketing) from Sydenham College, Mumbai and LLB from Law Faculty , Delhi University. He is presently doing scholarly work on GST and its Impact of Trade logis-tics. (The views expressed here are authors own views only. )