Source: OnEarth
The Financial Times reported last month that almost 10 Chinese companies have suspended work on power projects in India, citing lack of local skills and “difficulties in importing their own technicians.” This news comes in the wake of an embarrassing New York Times story on India’s struggling power sector, still unable to provide reliable power to its 1.2 billion citizens due to entrenched “corruption, cronyism and weak economic policies.” Calling India a “perpetual second fiddle to China” because of the preponderance of infrastructure problems and their impact on economic development, the NYTimes article mainly focused on the appalling saga of the Ratnagiri Gas and Power plant in Maharashtra, India’s most industrialized state. Despite chronic power shortages, the erstwhile Enron project is yet to begin running at full capacity almost 15 years after it was first built.
Chinese companies are suspending projects because of the paucity of local engineers and technicians – something that may surprise most people who think of India as a mecca for engineering. However, with most students, regardless of their academic background, opting to pursue IT because of higher salaries, it isn’t surprising that India is facing a shortage of engineers from traditional disciplines like electrical or mechanical. India’s new limits on the use of foreign labor (only 1 percent) haven’t helped matters.
It is all well and fine for the Indians to eschew the Chinese – apparently Indian security officials were more relieved than alarmed at the decision to suspend projects. But for India to be able to sustain its current rate of economic growth, it will need to increase its electricity generation capacity by five to six times from 2003 levels by 2030. The country’s power sector reforms, mandated by the Electricity Act of 2003, have done little to alleviate the chronic shortage of power. Subsidization and cross-subsidization have kept prices artificially low for a long time, which has led to waste and inefficiency. A large part of the country’s energy infrastructure continues to be in the hands of the government; efforts at privatization have largely failed because of the usual red tape and bureaucracy. If the Chinese leave, there aren’t too many other countries waiting to take their place.
While a limit on the number of foreign laborers is understandable, one percent seems excessively restrictive. The Indian government should consider temporarily increasing the limit, while offering incentives to students to embrace and stick with traditional engineering disciplines like electrical and mechanical. The reforms put forth in the 2003 Electricity Act were a good start, but the problem has been with lackadaisical implementation.
For a country like India, where the “chalta hai” attitude (“let it go”) prevails in most circumstances, the best solutions for big-ticket issues like energy use or climate change may lie in thinking small. NRDC’s OnEarth magazine had one of my favorite articles of last year – how India’s entrepreneurial spirit could be tapped to tackle the problems that the government has failed to solve for decades. We’re not talking about the Tatas and Birlas here, but the guy two streets down who has the drive and requisite chutzpah to make that extra buck. Obviously, big cities will require big solutions, but small towns and villages – the ones that are yet to see the miracles of India’s economic stardom – should be encouraged to adopt small scale solutions that are reliable and sustainable. While the government is still dreaming up grand schemes that are sure to get mired in bureaucracy and corruption, several NGOs in India have been quietly working with local villagers and entrepreneurs on just these types of projects. For instance, instead of trying to get every person on the national grid, surely over-ambitious for a country like India, the government should look at small-scale power plants to serve rural areas. Small-scale projects also happen to be ideal for solar/wind energy sources, which continue to lack the scalability provided by traditional sources like coal and oil.
The article has numerous examples of such small-scale projects that are cropping up around the country, all of which are fascinating. It all goes to show that if India wants to compete with countries like China and Japan, it will have to get more creative with providing solutions for problems that continue to hamper growth and development. What works for the US, or even China, may not necessarily work for India. The country’s problems and culture, so unique from the rest of the world, require some serious out-of-the-box thinking.
