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Sunday, January 24, 2016

Impact of Fuel Policy on Urban Air Quality

The regulаtion of fuel by Indiаn government is very weаk. Indiа not only lаcks in proper fuel policy, but the policy is not even uniform аll over the country. Mаny metro cities аre trying to reduce their emission levels by complying with vаrious stаndаrds introduced by the Indiаn government but these аre not enough for better аir quаlity.

Indiаn government is promoting the use of аlternаte fuels like wind, solаr etc. It hаs plаnned to introduce Biodiesel аnd hаs drаwn а roаd mаp for the sаme. The Indiаn аuto industry is working with the аuthorities to fаcilitаte for introduction of аlternаtive fuels. Indiа is аlso working on the roаd mаp for Hydrogen аs а fuel. The use of LPG hаs аlso been introduced аs аn аuto fuel аnd the oil industry has drawn up plans for setting up of auto LPG dispensing stations in major cities. But India is still dependent on the fossil fuels and the demand is exceeding supply constantly.

The demand for vehicles is also expected to exceed supply especially in urban India and hence the increase in vehicular emission. Indian government has made up the norms to regulate the emission levels. Bharat stage emission standards were built by the government to regulate the output of air pollutants from internal combustion engine equipments and are updated on a timely basis. Recently Bharat Stage IV norm was implemented in 13 major cities. According to this norm, CNG is made mandatory for public transport which has helped in cutting down the emission levels in urban India. Now around 100,000 commercial vehicles are running on CNG in Delhi and Mumbai. The fuel specification for diesel and gasoline is also aligned with Euro II, Euro III and Euro IV.

But there are many shortcomings in the regulatory policy of India. The CO2 emission is increasing rapidly in urban cities and there are no standards for CO2 emission limits for pollution from vehicles. There is also no provision to make the CO2 emissions labelling mandatory on cars in the India. The new standards have been proposed by the Pollution Board but no action has been taken and car industry is trying to dilute them. Delay in announcing and implementing the fuel economy standards for 2015 and 2020 can seriously jeopardize energy security and climate mitigation plans especially given the unprecedented growth in car sales.

Economic аnаlysis of fuel policy

Indiа’s fuel policy hаs brought in usаge of LPG, CNG etc. which аre not only greener fuels but аre аlso the cost sаvers аs they cost less аnd give better mileаge to the vehicles. It hаs benefitted the fleets thаt аre running tаxis, аuto rickshаws аnd the Government itself which runs thousаnds of buses in metro cities. The initiаl costs like modificаtions required in vehicles аre to be incurred. But the pаybаck period is fаirly smаll. LPG provides cost sаvings of neаrly 40% over petrol аnd CNG provides cost sаvings of аs lаrge аs 70% over petrol. However, Government is plаnning to increаse the costs of these fuels by аs much аs 50%. It is surely going to bring down the benefits of these cleаner fuels. Аlso, these fuels hаve the heаlth benefits аs CNG emits 40% less CO2 thаn petrol. Cleаner is the environment less is the аmount spent on heаlthcаre.

Аnother economic benefit which the nаtion hаs is thаt by providing аlternаtive fuels, imports of crude oil hаve decreаsed thus improving the Current Аccount Deficit аnd improving self-sufficiency.


Cаse in Point : Efforts to reduce pollution in Delhi

Meteorologicаl chаrаcteristics hаve а significаnt effect on Delhi’s аmbient аir quаlity. Rаin wаshes аwаy pollutаnts аnd high wind speeds disperse them, lowering concentrаtions. Further, low wind speeds, аlong with winter thermаl inversion (where cold air is trapped under warm air); also tend to decrease air quality in the winter month.

In the recent years, Delhi has seen an inflection in terms of population growth in both people and vehicular terms, making pollution reduction that much more difficult.

Push for policies against pollution in Delhi began way back in 1985, where the Supreme Court, while acting on a PIL, asked both the central government to report measures undertaken to control pollution. Due to inaction of the executive despite directions from the SC, the SC began passing orders to force implementation of pollution control policies, including but not limited to the fuel policy. Some of the earliest orders / directions were regarding:

Reduction in the sulphur content of fuel - the sulphur content of diesel and petrol was progressively reduced from 1 percent for diesel and 0.2 percent for petrol down to 0.05 percent for both fuels.

Conversion of all commercial passenger vehicles to CNG: now-famous judgment of July 28, 1998, ordering the conversion of all commercial passenger vehicles—buses, taxis, and three-wheelers—to CNG. The number of buses in Delhi also was increased from 6,000, to 10,000

Retirement of old commercial vehicles: In 1998, in accordance with the Supreme Court’s order, commercial vehicles older than 20 years were forced to retire starting in October of that year, those older than 17 years in November, and those older than 15 years in December.

Introduction of pre-mixed fuel for two-stroke engines: though these oils were available openly earlier, people were found to be mixing these in the wrong proportions, using excessive аmounts of lubricаting oil аnd cаusing much more pollution.

Tightening of emissions stаndаrds: The first wаs the notificаtion of the first set of Emissions stаndаrds for Indiаn vehicles; in 1993, new vehicles were required to аchieve progressively stricter stаndаrds by 1996 аnd 2000. Second, beginning in 1995, аll new pаssenger vehicles were required to be equipped with cаtаlytic converters to further reduce emissions.

Power plаnt fuel reforms Delhi hаs three coаl-fired power plаnts within its city limits—the 247-megаwаtt (MW) Indrаprаsthа Power Stаtion, the 135-MW Rаjghаt Power House, аnd the 705-MW Bаdаrpur Thermаl Power Stаtion. Sometime between 1999 аnd 2000, Delhi’s thermаl power stаtions begаn to use beneficiаted coаl, with аn аsh content of less thаn 34 percent, versus coаl with аn аsh content of 40 percent (DPCC n.d.). This meаsure wаs implemented in pаrt to mаke the ESPs instаlled in these power plаnts more efficient аt аbаting emissions

Impact

The policy that led to the conversion of аll buses to CNG, for exаmple, аppeаrs to hаve helped reduce PM10(Particulate Matter with аn аerodynаmic diаmeter of less thаn 10μm), CO, аnd SO2 concentrаtions, But it resulted in а very substаntiаl increаse in CO2 аnd CH4 emissions.

Аt the sаme time, the CNG switching gаins, which аre аppаrent in the cаse of buses, are not being seen in the cаse of three-wheelers. Possibly becаuse of poorer technology, CNG three-wheelers аre leаding to аn increаse, rаther thаn а decreаse, in levels of PM10 аnd NO2. The increаse in the proportion of diesel-fuelled hаs аlso hаd аn impаct on аir quаlity. While diesel-fuelled cаrs hаve helped to reduce CO аnd SO2, the lаtter becаuse these cаrs аre running on cleаner diesel, they hаve led to аn increаse in PM10  аnd NO2.

These gаins though аre being negаted to some extent by the sheer increаse in the number of vehicles in Delhi. Though the increаse in the proportion of CNG- to diesel-fuelled buses hаs helped to reduce CO аnd SO2.Similаrly, the drаmаtic increаse in the kilometres trаvelled by cаrs аnd two-wheelers аlso is contributing to а decreаse in аir quаlity.

Lessons to be learnt from the Delhi case

First and foremost, air-pollution regulators in other cities should consider the gains that can be made from fuel switching—moving away from diesel or petrol to CNG—as this single intervention, if targeted at gross polluters, can have a significant impact on air quality. It is important to note, however, that these gains will only be realized if the technology being used in CNG vehicles is sufficiently advanced and therefore sufficiently clean. Delhi, for example, has not been able to realize all the gains from its CNG-conversion policy in part because of poor technology in the case of CNG three-wheelers. This suggests the need for regulators in Delhi to seek ways to improve the current three-wheeler CNG technology.

Another policy intervention needed in Delhi concerns the rampant increase in the number of diesel-fuelled cars. Some of the gains from the introduction of cleaner diesel get negated because of the increase in the number of diesel-operated cars, which, in turn, is adding to the emerging threat of NO2 and the continued threat of PM10. This suggests a need for stricter emissions standards for diesel cars.

Finally and most importantly, our results suggest that the gains from the large number of interventions made in Delhi could well be lost if the kilometres travelled by all vehicle types continue to rise. Since it’s not reasonable to place restrictions on people’s mobility, this argues for increased public transportation in Delhi. With the introduction of the Delhi Metro and high-capacity buses, Delhi is making some strides towаrd increаsing public trаnsportаtion.
There is, however, а cleаr need for Delhi to promote public trаnsportаtion more аggressively, especiаlly given the plаns to introduce the аffordаble cаrs by mаny mаjor mаnufаcturers in the coming yeаrs, which is likely to cаuse the vehicle populаtion in Delhi to explode further.

Conclusion

Ours being а developing country supporting а sixth of the world’s populаtion, economic development is importаnt аnd imperаtive. But to give the future generаtions а quаlity life to leаd аnd equаl opportunities to hаrvest, we need to ensure we аchieve this growth аnd development bаsed on sustаinаble аnd environmentаlly initiаtives. Due to sheer pressure of numbers, our efforts аre directed towаrds meeting our quаntity chаllenge аt the cost of the quаlity chаllenge. Controlling pollution by formulаting аnd enforcing policies is а tаsk thаt needs our immediаte аnd continuous аttention, correcting and updating itself with newer, cleaner technologies which are commercially viable. We can be a wealthy nation but it’s also important to be a healthy nation.



This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can  apply for a test drive of the hatchback Zica today.

Impact of Financial Policy on India

A sound developed financial system drives healthy and sustained economic growth. Post the liberalisation of the Indian economy in 1991, the development in the financial sector has taken huge strides which includes financial markets, banking and non-banking finance companies, capital market and mutual funds. Entry of private and foreign players and increase in competition in the financial sector has led to diversification in the financial system. A progressive policy environment is needed to develop a financial system that would support high economic growth as well as extend the benefits across the society.

The Indian banks have grown manifold in the past years. Due to minimal exposure to toxic wastes, the banks were relatively less affected by the global financial crisis. The increasing NPAs is a matter of huge concern. Small private banks are expected to have high deposit and lending capabilities under strict regulatory supervision which would focus on small and mid-size investors and encourage financial literacy among them. Transparency should be introduced in allocation of funds and benefits to the priority sector. RBI should introduce Priority Lending Certificate which can be issued through an organisation, to all the banks that lag in meeting priority sector lending norms, thereby transferring the risk of lending to the organisation while the banks continue receiving the perks of priority sector lending.

The policies of the existing co-operative bank structure must be strengthened as it’s the backbone of the Indian banking system. Co-operative banks don’t enjoy most of the benefits which large private or public sector banks do. Financial literacy is poor among most of the people in India and the government’s Jan Dhan Yojana scheme, wherein every family living in India must have a bank account, was the first step to combat financial untouchability. The scheme also offers various profits to poor families. The families are a part of the economic cycle and having a bank account would connect them to the economy, which would ultimately lead to a better economy country. So far 15 crore bank accounts have been opened and the government has also taken initiatives to provide insurance covers to the people.
More Asset Reconstruction Companies can be encouraged to enter India to help the banking sector in case of distress. At present, ARCs face obstacles to raise funds from the domestic market in buying NPAs from banks as they are high-risk enterprises. More foreign players can be encouraged in the ARC sector, as they have the experienced and the capability to take risk.

As the financial players of the future emerge larger in size, with better capital base and superior technology, the regulatory mechanisms will have to ensure that the health of the Indian financial system is stable and its ability to combat volatility remains strong. RBI can tighten the bank exposure norms as Indian banks are exposed to high risk. The bond market can used as an alternative source to raise funds so that banks don’t have to fund the risk-exposed entities.

There are areas of great concern that need to be looked into the Indian financial system. There is a huge concern at the structure of the financial services to make investible resources available to the future investors in the years to come. Emphasis must be given to improve how quickly the banks can access the collateral in case of large loan losses.  The inconsistency in the prices of global commodities has adversely affected numerous Indian companies. This has caused an increase in NPAs (non-performing assets) and provisioning for credit losses has become the key concern area.


This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can  apply for a test drive of the hatchback Zica today.

Impact of Agricultural, Industrial and Environmental Policy on Indian Economy

Economic policies drive the pace of economic growth if they are amendable based on the changing economic scenario. The Government of India would need to implement major policy initiatives over the current decade in the following broad groups:

Agriculture policies

Agriculture is the major source of income of the Indian population. But the sector needs new policy initiatives for stimulating growth and enhancing efficiency as it is lagging behind. The Agriculture Products Marketing Committee (APMC) Act in 2003 intends to transform India’s agricultural marketing system, boost farm income, eliminate intermediaries to increase income levels of farmers and reduce the role of the state in marketing. It needs certain amendments such as setting up direct purchasing centres, allowing contract farming and establishment of private as well as consumer and farmer markets. The state government’s thrust on educating and training farmers will help improve their skills and develop the agriculture sector.

The government will follow the direct cash transfer system for disbursal of subsidy for people living below the poverty line. This will reduce black marketing, adulteration, and hoarding, facilitate a more efficient distribution system, and also enable that the subsidy reaches the intended people. One of the major challenges is identifying the targeted beneficiaries as there is lack of identification. A task force has been set-up to work out a robust plan to effectively merge the new system with the exiting one. Moreover, the state governments should be actively involved to enable effective distribution.

Industrial Policy

To achieve a sustained high growth path, India needs to further strengthen its industrial base. The population of the working age group (15-59 years) is expected to rise to 64.2% by 2020. India needs to generate employment opportunities through rapid development in the manufacturing sector. The policy initiatives undertaken by the government such as land acquisition policy, facilitating FDI in India and ‘Make in India’ campaign bodes well for the industrial sector development. 

Steps have already been taken to improve the investment environment in the country, but only a few states have incorporated the system of single window clearances to enhance transparency and speedy processing. The approvals and clearances can be received from different agencies by filing a common application form, not from various departments or board or statutory authorities, and the entire process will be time-bound. Andhra Pradesh was the first to implement it and various other states such as Gujarat, Karnataka, Orissa and Maharashtra followed suit.

The government has taken numerous initiatives to boost revenue and justify expenditure. The introduction of the GST, which seeks to combine indirect taxes levied by the state with those levied by the central government, is expected to result in a gain of 0.9-1.7% in India’s GDP by improving economic efficiency. 

Environment Policies

Lately, there is an increase in concern regarding environmental degradation and the governments, industrialists and various other organizations have realized the importance of a healthy ecosystem for a sound and secure livelihood and sustainable economic development. The government should formulate effective stringent norms to reduce environmental degradation and encourage the use of environment-friendly machinery by providing incentives and tax reliefs, in an effort to achieve the aim of sustainable development. The Government needs to stipulate a frequent and realistic emission norm along with devising measures such as ‘Carbon Tax’ on coal, to enhance environmental protection. 

The funds collected through ‘Carbon Tax’, at the rate of र 50/tonne, is diverted to ‘National Clean Energy Fund’; to meet the requirements of funding research for innovative products in clean energy technologies and remedial programmes for environmental problems. The government has also enhanced the criteria of reduction of emission and the industries now have to have a high level of efficiency. The government needs to provide incentives to industries to enable them to afford the high cost equipment, in order to enhance productivity and reduce pollution.

As a very rapidly growing economy which is next only to China, India should play a critical role in various international United Nations organisations. It has the manpower, resources, and technology to address any and all issues and challenges confronting the developing world. 

India suffers from numerous setbacks such as bureaucracy, red-tapism, corruption, acceptance of this corruption by the society and abuse of political power. Given such a shoddy state of affairs, merely suggesting a set of technical solutions is unreasonable as any or all of these social constraints can affect the implementation of policies. Hence, there is an urgent need of formulating preventive strategies, specialised courts to tackle environment issues, and transforming the public/private sector industries so as to administer transparency and a consequent adequate operational system. Moreover, the public needs to have greater participation to help realise societal conditions that cause hindrances. We’re taking longer to get done what needs to be done.

India has to overcome a lot of issues, if it has to attain Late Dr APJ Abdul Kalam’s vision of India becoming a developed country by 2020. Time will only say what future has in store for the Indian economy but as of now it’s on the right track.


This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can  apply for a test drive of the hatchback Zica today.

Impact of Liberalization on Indian economy and Vision 2020

In 2015, looking ahead at the next five years, India is on its way to become a developed country. India will not just have to endure the challenges of development in rural areas, sustainability of urban areas, development of national infrastructure, overpopulation and battle against them, but the country would also be adding millions more in the years ahead. The cities needs to have proper security, good living conditions, supported by proper infrastructure and basic amenities (electricity, drinking water and sanitation). In short, India needs to have sustainable cities with large scale job opportunities, optic fiber connectivity, inter-connected means of transport, with population stabilization and effective health facilities. Moreover, in the education department, there must be an improvement in quality of education, with special priority to improve teaching and learning outcome, so that education-to-job progression is smooth and fruitful. India is ushering into the era of sustainable development. The emphasis must not be on growth alone, but alongside it should also be on triple bottom line of rapid economic growth, social equity and inclusion, and environmental sustainability. India has to overcome a lot of issues, if it has to attain Late Dr APJ Abdul Kalam’s vision of India becoming a developed country by 2020.

The 1991 economic reform happened amidst two acute crises involving the financial sector-
1.         The balance of payments crisis that threatened to push India to the brink of default
2.         The grave threat of insolvency confronting the banking system

Financial sector reforms have been an important part of the overall reform process of Indian economy. The hopes that were raised by the impressive progress in the initial reform years couldn’t be replicated. Opening up of the economy to foreign capital helped to combat the issue of the balance of payments position. There was a serious need to streamline the process, upgrade technology and have structural changes in the financial system.


In the last decade, there has been a significant improvement in the financial markets with the introduction of numerous new products in the sector of banking, financial services and insurance. The new private players, which included foreign companies, adopted modern technology to offer a more sophisticated range of financial services to the customers. This resulted in innovation and efficiency in the financial sector in India. India is thinking of opening its pension sectors also to foreign investors. Financial sector regulators ensured that the new regulations were in tandem with the growth in the financial sector. The Indian economy has witnessed an outbreak of numerous foreign banks, insurance companies and investment institutions.

The Indian economy is being boosted by positive policies of RBI, fall in gold imports, lower global oil prices. The investment cycle needs to be revitalized, financial sector health bolstered and the structural reforms accelerated. Though the economy is at a stage to cope up with the deluge from volatile global financial markets, there are still potential risks on the horizon. Any unexpected developments in China or United States could cause a ripple effect, disrupting numerous economies including India. On the domestic front, the worsening bank asset quality and the weaknesses in corporate balance sheets might prove to be a downer.

Within the next decade, India will have the largest workforce in the world, and will need to create about one hundred million jobs for the countrymen. Deep structural reforms are needed to generate the required jobs despite the fact that the Government of India’s ‘Make in India’ campaign to improve the business environment has gained momentum. Nevertheless, there are many key areas that need improvement which are as follows:

a)         addressing hindrances in the energy and power sectors
b)         increasing foreign investment to improve the country’s infrastructure
c)         expediting the process of land acquisition
d)         improving the education system to combat the shortage of skilled labour
e)         reforming the agriculture sector to improve efficiency in food distribution, and storage
f)          making labour markets more flexible to boost women labour force participation

This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can  apply for a test drive of the hatchback Zica today.

Impact of Internet Piracy

The film industry is known to sell dreams and thoughts. But since the advent of digital revolution, they’ve failed to sell one detail: piracy is a theft and people who imbibe piracy are abating criminals. The watchdogs have been trying in vain to keep the pirates at bay and to slowdown the assault of viewers rushing to download torrents or stream movies or episodes of TV series online.
The film industry has been responding to this threat by taking legal measures and raising awareness of the consequences of internet piracy. They have urged numerous governments to toughen laws on online file sharing. Just a year back, the founders of The Pirate Bay were found guilty of copyright infringement.
A different aspect to piracy is that if we consider just one film at a time, piracy will definitely have a negative impact, but the same can’t be said for the film industry as a whole because the most pirated films are the ones that make the most money at the box office. Nobody complains about the piracy of a blockbuster film, but when a flop film is leaked online, people raise the issue of piracy.
A logical deduction of the case would be to analyse the situation in a piracy-free world. Just because the viewer had watched the pirated version of the film doesn’t necessarily mean that he’d have paid for the film had it not been available for free. A college student wouldn’t have bothered to go in a theatre to view movies or subscribe to Netflix to binge-watch his favourite TV series; he’d rather wait for them to be telecasted on the cable network. It can be safely assumed that every pirated work doesn’t represent lost revenue.
For instance, if people forgo paying $7 billion in movies by downloading pirated movies and spend the same amount on laptops and smartphones which they’d use to watch the movies, then this would lead to job creation in the computer and consumer electronics field.
According to a report by consulting firm L.E.K, internet movie piracy causes a total lost output for Hollywood of $20.5 billion per year, accounts for more than $850 million in lost tax revenue and thwarts the creation of about 145,000 jobs.
The cinema halls and production houses are the major victims of piracy. The financial impact is felt the most by the cameramen, makeup artists, studio executives, costume designers, box office staff and they’re adversely affected by this loss of revenue due to piracy. Sometimes the upfront payment received by the filmmakers isn’t enough to cover the whole production cost but since film is a product that has long-term value, the producers take the risk.

People may think an individual act of piracy doesn't matter, but if that becomes a way of life then intellectual properties would have no value. Piracy, if not stopped or at least controlled, could have an adverse impact on the film industry and play havoc with the lives of lakhs of people, whose livelihood depends on the film industry.

This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can  apply for a test drive of the hatchback Zica today.

Impact of Climate Change

We are at a remarkable moment in time. We face two fundamental transformations in the next 25 years, which will determine whether the next 100 years will be the best of the centuries or the worst.  The impact of these transformations can have a huge consequence for mankind. The first of these transformations is the basic structural change of the economies and societies. Now, almost 50 percent of the world is urban area, which is going to go up further to 70 percent by 2050. Over the next two decades, we'll see the demand for energy rise by 40 percent. The constant growth in the economy and in the population is putting increasing pressure on our land, water and forests.

This is profound structural change. If we manage it in a negligent way, we will create waste, pollution, and destroy land and forests. The emissions of greenhouse gases would rise and cause immense risks to our climate. Concentrations of GHG in the atmosphere are already higher than they've been for millions of years. If we go on increasing those concentrations, we risk temperatures over the next century that the planet hasn’t seen for millions of years. It would lead to changing sea levels and millions of people who would have to move from their homes. And if we've history has taught us anything, it means severe and prolonged conflict. There is bound to be a loss of identity, and that’s what is in store for us in the future if and when we do migrate.

A marginal rise in sea level would mean a loss of a lot of land as most of the land is low. And quite apart from that, we are getting the swells at the moment. A majority of the people do not understand that the climate change is something that is happening in the present. We are at the end of the spectrum. It's already with us. There are communities that have already been dislocated. They have had to move.

The first transformation, the economic one, is going to happen anyway. But the second of the transformations, the climate transformation, can be decided by us provided we move to a low-carbon economy. The sooner we mitigate our greenhouse gas emissions, the less we will have to adapt to the climate change impacts in future. These two transformations face us in the next two decades and they will turn out to be decisive.

There’s one good news though. Thanks to Science, we now know that the planetary risks we're facing are so large, that business as usual is not an option. In fact, we're in a phase where transformative change is necessary, which opens the window for new ideas and new paradigms. Mankind needs to face the impact of climate change, in unison, with rigour and hope.

"If you can do, or dream you can, begin it now, for boldness has genius, power and magic in it."



This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can  apply for a test drive of the hatchback Zica today.