“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 [email protected]
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. )