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The Case For Staying With Ethanol 10

Ethanol blending over 10 per cent may be desirable but a full understanding of its environmental and economic impacts is crucial.

Shyam Ponappa  August 3, 2023

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Shyam Ponappa on ResearchGate

Comprehensive, Integrated Strategy & Execution

India has been coasting along on a post-feudal-colonial mélange of currents and tides, with the brigandage of opportunistic politics fed by our (the voters’) greed for short-term benefits. The result is grotesque populism and corruption, in lieu of the deferred gratification of pleasing cities and countryside with the appurtenances of proper governance: sidewalks and drains, toilets, transport, administration and order, hospitals and schools.

We have to organize and manage ourselves, “engineer” our way ahead, taking steps to build and develop our solutions, building systems and processes, and not just wait for things to happen. We need a comprehensive and integrated, systemic, silo-busting, problem-solving approach.

This applies across the board in the broadest “spatial planning” sense that integrates housing and land use at all levels with commercial, industrial, cultural, scientific and educational activity, transportation, and all governance and infrastructure: water, sewerage, energy, communications, basic health and education. Infrastructure being the first level of enablement is the essential starting point.

Previously, India’s leaders acknowledged that infrastructure is India’s great need. Yet, they took no steps [exception: NTP-2011 in October, 2011] to marshal forces to draw up a credible strategy and execution plan. This is what needed and needs doing. Only good intentions and/or money won’t do, because delivery systems and processes have to be developed, i.e., planned, and built from scratch.

It looks like the NDA II will seriously address the development of enabling infrastructure.  A beginning on a long way ahead.  The next few months will demonstrate the resolve of the NDA II to really break the mould and get the job done.

- July 2014

And it got worse for Digital India with another spectrum auction [March 2015] and the attendant deprivation of network rollout and service delivery. 

...And worse: another auction with Rs. 109,000 crore (~$17.6 billion). - April 2015

... And yet worse, as another auction reduced investment by over Rs. 65,000  crore  (~$10 billion). - October 2016

... And annual auctions threatened from 2017! - March 2017

Lack of integrated systems and controls led to the worst bank fraud in India - PNB $2 billion - February 2018  And IL&FS - September 2018

The National Digital Communications Policy 2018 is only an aspirational statement - October 4, 2018

Big bang for Wi-Fi!  5 GHz regulations similar to the US FCC. - October 2018

As the sector stalls, government talks 5G spectrum auction, wanting more cash while the industry drowns in debt. - January 2021  

The Supreme Court reverses previous rulings in favour of telecom operators on retroactive charges for spectrum based on an all-inclusive definition of Adjusted Gross Revenues continues...

Another ill-advised auction - March 2021.  And another monumental failure, neither serving the government's cash needs (too much left on the table), nor the consumers (too much spectrum left untouched).

A reversal (FINALLY!) of the retroactive tax amendment affecting Vodafone, Cairn, and others - August 5, 2021.

Spectrum Usage Charge zeroed; past due demands being reconsidered? - October 7, 2021

5G Spectrum Auction July 2022 nets Rs. 1.5 lakh crore (about $19 billion), making that amount of capital unavailable for investment in networks.  Allocation of an even larger amount to reviving BSNL and MTNL increases uncertainty of outcomes.

The Train 18 / Vande Bharat Model

 

Add good passenger handling, and this is the model for replication.

Shyam Ponappa  June 1 2023

Vande Bharat trains get deservedly good coverage nowadays. They provide the model for goal-oriented team achievement that is possible in infrastructure. This process requires extension to aspects of user experience to complete the end-to-end system. It needs the complement of passenger handling for total service delivery, comparable to orderly boarding and disembarkation for airlines, or the system for voting booths.

A former member of the Railway Board describes the project as conceived, planned and executed in record time by a team of inspired, talented, and committed Railway professionals of the Integral Coach Factory (ICF) in Chennai.¹ Apart from the sanction by the then chairman of the Railway Board, A K Mittal, of two train sets budgeted at Rs 100 crore each, there was apparently little official support. These were completed on time, within budget.

 
Yet, just four years ago, after successful trials, the project was stalled by vigilance investigations that proved to be unwarranted against the leaders of the pioneering team of the “Train 18” project, later renamed “Vande Bharat”. The investigations found nothing, but the collateral damage was devastating for exceptional performers despite their being cleared of false charges.
 
Why “Train 18”? Because its champion, ICF General Manager Sudhanshu Mani, had 18 months left in service. His dream was to catch up on decades of established global practice at the ICF before retiring. The aim was to change the design of separate locomotives and coaches to a modern, single-unit train set capable of 180 km an hour without locomotives, with all power and service provision built into the undercarriage under the floor (for details see his book My Train 18 Story).

The ICF team rose to the challenge with good leadership, consultants, and vendor-partners, achieving what takes twice as long globally at half the cost. Successful trials at 180 km an hour of a train set with 80 per cent local manufacturing caught the Prime Minister’s attention, and two train sets began operation in 2019. The programme stopped abruptly because of vigilance action against the top team.²
 
The charges proved to be unfounded, and, after nearly three years, it seems as though the PM’s interest resulted in restarting the programme. Now, 18 train sets are operating as of May 25, 2023, with hundreds more planned. The performance of the trains occasionally elicits back-handed comments, such as being relatively slow (average speeds are more than 80 km/hour), that energy consumption is high, or that this would be nothing special in Germany, Japan, or China (the Financial Times)³, which is actually a compliment. The Vande Bharat is reportedly more energy-efficient than trains abroad, with average speeds on 14 routes published on April 20 ranging from 66 km an hour to 96 km an hour, with the median around 80 km an hour. By comparison, speeds on intercity routes under 300 km an hour in Europe in 2016 were as in the chart, with the median also at about 80 km an hour.

Reading Mr Mani’s book or watching his TEDx talk⁴ gives a sense of the degree of professionalism and teamwork that went into these outcomes. This is the achievement in terms of “hardware”. What of the passengers for whom it was made?

 
The design and manufacture of Train 18/Vande Bharat is exemplary for systems thinking and design, starting with the objective of a 180 km-an-hour train set with certain safety, quality, and comfort norms. The present emphasis on ramping up is promising. Yet more needs doing as always: Upgrading tracks to enable 200 km an hour at least, equipped with modern signalling, train sets with sleepers for longer distances, and barriers to prevent access to tracks. The scope and scale are monumental, and even more is needed beyond Vande Bharat for upgrading local passenger and intercity trains with better facilities.
 
Passengers who use these services do not have the benefit of an equivalent systems approach in their handling. The Railways have to take this step of setting the objective of convenience for passengers arriving at the station, embarking on these (or any other) trains, disembarking, and leaving the platform, to upgrade the customer experience hugely.
 
The process of embarking/disembarking on Vande Bharat trains is not organised. As the train is at the platform for a limited time, anxious passengers and porters rush to exit or enter helter-skelter. There appears to be no attempt to establish or maintain order. As for manufacturing, there need to be systems for passenger handling. Passengers arriving to embark on the train need a process, such as no well-wishers crowding the train, and queues instituted according to their coach number and seating order, half at the head end and half at the tail end of where each coach is expected to stop. Disembarkation needs to be managed first at both ends of carriages, with a clear passage to exit platforms. Embarkation needs to be arranged for each coach, such as having passengers from Seat No. 1 to the halfway number at the nearest doorway, and the other half at the farther doorway. With such procedures, passengers would have a much better experience with end-to-end services.
 
A systems approach in addressing train services for passengers is a paradigm worth applying with appropriate changes to other infrastructure and government services. The driving criterion needs to be clearly defined user-centric service experience, as against simply building more rail, or roads, or fibre networks. Processes need to be goal-oriented and require an end-to-end design of the hard and soft systems aspects as well their elements, followed by execution to standards, on firm timelines.

This template of goal-directed collaborative achievement deserves extension and replication in infrastructure and governance, using the talent and experience of such exemplars in providing leadership and guidance. There is then no need for overstatement, since the results will speak for themselves, as in the case of Train 18.
 

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Shyam (no space) Ponappa at gmail dot com

1. “Not by ‘Vande Bharat’ alone”.
https://www.thehindu.­com­/opinion/lead/not-by-vande-bharat-alone/article66786278.ece

2. “Controversies, vigilance probe bring Vande Bharat Express to a standstill” 

https://www.business-standard.com/article/economy-policy/vande-bharat-express-yet-to-leave-station-as-controversies-hit-project-119091601507_1.html

3. “India’s new railways project picks up speed.”
https://www.ft.com/content/77b1db06-4f 8c-4866-8f4a-4f489dce44cd 

4. https://www.ted.com/talks/%C2%ADsudhanshu_mani_the_j%20ourney_of_train_18

Aiming For The High Road

Government's policies can either enable or limit our prosperity.

Shyam Ponappa  May 4, 2023

There are very divergent views about India’s economic prospects.  Some perceive great promise, while others see big government and unclear strategy.
 

The upbeat take is that investors who put substantial capital into China in its early growth phase are finding patterns mirrored in India that encourage their investment (An updated perspective on India, Business Standard, April 17, 2023). These investors are looking to limit or reduce new investments in China, and, among emerging markets, India is promising with the capacity to absorb large investments. Factors such as Apple’s exports of $5 billion in its first year support this, as does recent enthusiasm about India’s building logistics and effecting a digital transformation. The expectation is that annual growth will be over 6 per cent, and that gross domestic product/capita may grow from $2,500 to $5,000 in six to seven years.
 

A more downbeat view is that India has lost opportunities and made misplaced choices with growth coming from government spending and seat-of-the-pants strategies (Rolling the dice on growth, Business Standard, May 3, 2023). This has led to a constrained, uncompetitive private sector hobbled by disabling regulations, inadequate and unreliable infrastructure (notwithstanding high investment, on which more later), limited capital access, tariff barriers, an inappropriate and ineffective educational approach for employability and improving skills, and impoverishment through electoral handouts to much of the population. Instead of structural changes to provide lower cost infrastructure and efficient governance, the government chose corporate tax cuts to spur growth.
 

The fact is that while India is still in a sweet spot because of its economic resilience, momentum, favourable demographics (although largely unutilised), and improving productivity (1), growth in this decade is likely to average under 6 per cent annually. (See chart).

 

India will continue to outpace global average growth rates of real GDP and real per capita GDP from 2023 to 2030
                                                                                                                     (% change y/y)

 

Some data support this view, such as skewed consumer demand and delayed projects. Consumer demand is stronger at the high end, but weak at the lower end. Infrastructure project delays in March 2023 were reportedly the highest since 2004. These include nearly 57 per cent of projects over Rs 150 crore, resulting in cost escalation of over 20 per cent, amounting to half this year’s capital expenditure budget. 

Presumably this problem is reflected in the Gati Shakti National Master Plan. When public access is permitted, it will be interesting to know about the project management and coordination processes for timely execution, given its roots in a Project Management Institute report.

Higher growth of 8 per cent or above requires more structural change. These begin with policies that (a) provide reliable infrastructure that is affordable, (b) improve capital access, and (c) eliminate “tax terrorism”. Facilitating productivity through infrastructure everywhere would enable more people, including more women and young people, to participate and contribute. 

The next level of productivity improvement requires much deeper change. These extend to assuring a sense of security with law and order, access to meaningful education and skill building, deep changes away from “extensive” agriculture to an intensive, informed approach that is productive and sustainable. A critical prerequisite is cohesive, unifying leadership that inspires cooperation and inclusion.  Regarding better infrastructure, the following observations indicate possible ways to improve: 
 

Road Construction: New roads are being built at a furious pace.  However, two problems hamper our logistics despite the enormous sums spent. One is project delays. The other, more serious issue is the rapid deterioration of roads. While heavy rains do aggravate the problem, the underlying reasons are the quality of construction and lack of timely maintenance, made worse by undue emphasis on the value of contracts and quick implementation. Countries with equally severe weather variations build and maintain better roads. An expert with experience in America and India asserts that the reason is not enforcing requisite standards, quoting John F Kennedy that it is the roads that built America’s wealth. (2) This need for adherence to standards extends to many areas, and would transform our quality and competitiveness. It does not, however, lend itself to big targets and bragging rights for electoral purposes.
 

Communications – 4G, 5G and Beyond: If there were fast, reliable 4G-level connectivity countrywide, and if most people got access to these services, there would likely be a productivity revolution.  It would take much more than just connectivity: Development of content, technology choices and organisation are required to increase beneficial use exponentially. For example, content is needed for agricultural transformation to intensive cultivation, workplace skills and manuals, or K-12 education.
 

For the middle-mile and second-last mile, until the current blitz for BSNL 4G wireless, our policies emphasised fibre.  Widespread fibre-to-the-home is unrealistic in India because of the cost. The way out is high-speed wireless for middle-mile and second-last mile (backhaul), and for last-mile (Wi-Fi and cellular). We need enabling policies for these.
 

Another technology issue is 4G and 5G.  South Korea, leading in 5G, is the exemplar of the “5G fallacy” of getting five-fold speeds after $20 billion in network upgrades, instead of the desired 20 times speeds.  South Korea has nine cities of more than a million people, 42 between 100,000 to 1 million, and 77 between 10,000 to 100,000. They have 215,000 base stations of which only 2 per cent are 28 GHz, covering 45 per cent of their population. India has 48 cities of over 1 million, 405 with 100,000 to 1 million people, and 2,500 with 10,000 to 100,000 people.  We have 102,000 base stations compared to South Korea’s 215,000, and would need many more at unaffordable cost for blanket coverage. What we need instead is high-speed 4G or Wi-Fi, using wireless 60 GHz and 70-80 GHz for the middle-mile, with 6 GHz Wi-Fi for the last mile (in addition to existing Wi-Fi at 2.4 and 5 GHz).
 

One more requirement is technology organisation: Shared networks versus single-operator networks.  Shared neutral host networks (NHNs) are the most efficient, while active sharing by operators costs 70 per cent less per user in an Indian case study. (3) 

It is the government’s choice of policies that can help us on the high road.

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Shyam (no space) Ponappa at gmail dot com

1: For details, see: “Productivity Growth in India: An Empirical Assessment”, RBI Bulletin January 2023.

https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/02ART19012023C2BCA396B632479BBDD5485D89FDEEF4.PDF

and

Page 10: https://www.imf.org/-/media/Files/Publications/WP/2023/English/WPIEA2023082.ashx

 

2: https://www.nbmcw.com/article-report/infrastructure-construction/roads-and-pavements/why-do-many-roads-constructed-in-india-fail-prematurely.html  

Prof. Prithvi Singh Kandhal has drafted standards for the Indian Roads Congress, and was formerly at the National Centre for Asphalt Technology at Auburn University in Alabama.

 

3. https://www.researchgate.net/publication/368772499_Techno-Economic_Assessment_of_5G_Infrastructure_Sharing_Business_Models_in_Rural_Areas

Shruthi K.A. Kumar and Edward J. Oughton

Empowering Gati Shakti - The Transport & Logistics Platform

Done right , the smart platform for infrastructure planning and execution could lead to tremendous productivity benefits.

Shyam Ponappa   |   November 2, 2022 

The National Master Plan for logistics development on a digital platform, Gati Shakti (Speed and Strength), was introduced in October 2021. It is a much-needed initiative to introduce effective management systems in coordinating relevant ministries for all aspects of transportation and logistics. It establishes digitised institutional processes for comprehensive, integrated project planning and execution, to assist ministries and infrastructure sectors in achieving results. The aims are more efficient outcomes at reduced cost and time. Done correctly, this will result in tremendous productivity benefits at a low cost and with better environmental impact.

A primary purpose of Gati Shakti is prioritisation for growth. Based on limited lay access (more on this later), an element that needs attention is telecommunications reform. The need is for inexpensive, higher capacity/intensity connectivity, by enabling spectrum usage for wireless and shared networks at lower capital investment with better utilisation. The platform’s effectiveness depends on this.

Gati Shakti is based on the recommendations of the National Transport Development Policy Committee1 in January 2014. Government agencies such as the railways, roads and highways, shipping, aviation, power, telecom, and so on reportedly use this for integrated planning and execution. During the past year, ministries responsible for fertiliser, coal, ports and the like reportedly identified nearly 200 “infrastructure gaps” in first-mile or last-mile logistics. An inter-ministerial expert panel monitors and recommends corrective action. Presumably, this will be tracked through the digitised database and portal, which also has geographic positioning capabilities.

Prioritisation And Policy Changes More Essential Than Capital 

As observed in an earlier column, a World Bank study across many countries validates the importance of telecommunications (and electricity) for growth.2 A report published by the Asian Development Bank Institute confirms that for India and China, internet and mobile density contribute to their high rate of growth.3

Apart from these findings from past data, telecommunications and digitisation are now essential to most aspects of living. Most importantly, telecommunications and the internet need major policy changes on network sharing and reduced taxes. These are needed even more than capital, to accelerate network coverage and delivery. Examples of changes required include permitting high-speed wireless without loading discretionary costs, such as up-front auctions, high costs for wireless links, and onerous procedures. Policy changes can reduce pricing and sticky process/procedures for operators and, ultimately, users and society as a whole. Until this is done, users are either deprived of services because they are simply not there, or constrained by erratic and low-quality services, or burdened with high charges. The impact is in many areas as indicated below:

- Environmental care & climate mitigation: Effective broadband coverage and shared networks significantly improve both.

- Education and work life reach: Extending broadband coverage to the many millions living in rural or distant areas is one obvious need. This is also true for the many urban users who endure poor services, beyond the privileged, relatively few who have fibre or reliable high-speed wireless. Undoubtedly, a whole gamut of content and methods will need to evolve to enable effective learning for less educated users, as will ways to mitigate costs to provide access. But it is probably the only way crucial services can reach so many quickly, channel our population productively and pre-empt their degeneration into disruptive problem creators. This will open education to many more boys and girls, and employment opportunities to men and women.

-  Similar benefits are feasible in areas such as e-commerce, distributed healthcare, government services, in small and medium manufacturing and services enterprises for work process support systems, and entertainment.

Temples to Metaphysics and Physics

In the 1890s, Acharya Jagadish Chandra Bose (Sir Jagadis Chandra Bose) demonstrated wireless technology at 60 GHz (V-band),4 but his pioneering work languished in India. Meanwhile, countries such as the USA, the UK and others, including China, have exploited this technology for high-speed gigabit wireless in their networks in place of fibre.

Much time and public resources are devoted to overt religiosity in India. Whereas Bose, scientist extraordinaire, in his inaugural address dedicated the Bose Institute in Kolkata in 1917 as not merely a laboratory but a temple. Adding Paramahansa Yogananda’s “keen interest in evidence that India can play a leading part in physics, and not metaphysics alone”, we would do well to apply more physics and science—as in using wireless technology in our networks, and having more temples to science, systems, and other practical disciplines.

India has just enabled restricted use of 60 GHz, although devices were available abroad for years. If government permits telcos to use 60 and 70-80 GHz “mmWave” technology for pay-for-use backhaul with no loading of extraneous costs (auctions, extra taxes), there would be enormous service and cost benefits in India, as in San Francisco and London (see the device maps in the charts for one supplier).

 

V-Band and E-Band Devices in San Francisco and London for One Vendor (2017)

Figure 3: Siklu radios in San Francisco, CA, according to FCC database

Source: https://go.siklu.com/blog/custom-blog/the-evolution-of-mmwave-2 

Figure 5: Siklu radios in London, UK, according to OFCOM database

Source: https://go.siklu.com/blog/custom-blog/the-evolution-of-mmwave-2 

Changes are also needed to institutionalise easier access to spectrum for authorised institutions and researchers, so that India’s research and development for commercial and defence is freed of arbitrary, self-imposed constraints and delays.

Public access to the Gati Shakti portal, limited for security reasons, was allowed from October 2022. A cursory look at the portal does not disclose project details on sectors. It may be more amenable to authorised users; to a lay user, it appears to be a repository of reports that does not cater to meaningful queries or logical searches. Adding such capabilities would make it more informative and useful, although this will need to be balanced with security.

The essential points are that improving living conditions requires enabling and applying technology and know-how. Attention to scientific and domain applications to deal with ground realities will help improve our state of infrastructure for productivity and ease of living. Prioritising digitisation and telecommunications will help correct losing out on growth and associated living conditions because of inappropriate policies, and genuinely add both Gati and Shakti to our efforts.

 

 

 Shyam (no space) Ponappa at gmail dot com

  

1: India Transport Report

Moving India To 2032

Vol I - Executive Summary

National Transport Development Policy Committee, January 31, 2014

Rakesh Mohan et al

Summary Recommendations: http://www.aitd.net.in/NTDPC/rep_ntdpc_v1.pdf

 

2: How Much Does Physical Infrastructure Contribute to Economic Growth?

An Empirical Analysis

Govinda Timilsina, David I. Stern, Debasish K. Das

World Bank Group, Development Economics

December 2021

https://openknowledge.worldbank.org/handle/10986/36780

 

3: Digitalization and Economic Performance of Two Fast-Growing Asian Economies: India and The People's Republic of China

Dukhabandhu Sahoo, Suryakanta Nayak, and Jayanti Behera

ADB Institute Working Paper Series

No. 1243

March 2021

https://www.adb.org/publications/digitalization-economic-performance-fast-growing-asian-economies-india-prc

 

4: Jagadis Chandra Bose: Millimetre Wave Research in the Nineteenth Century

Darrel T. Emerson

National Radio Astronomy Observatory

949 N. Cherry Avenue, Building 65

Tucson, Arizona 85721

1998

https://www.cv.nrao.edu/~demerson/bose/emerson_delhi.pdf

Aim Long Term For A Strong Currency

 

Strong currencies reflect strong economies.

Shyam Ponappa   |   December 3, 2020

Is a strong currency not desirable for India? There seems to be broad acceptance that a declining rupee is essential for exports. Is this true long term that it is in India’s interest to have a currency that is consistently losing value? Consider this in the context of our long-term interests.

As exports become more expensive with a stronger currency, sectors relying on wage-rate arbitrage, such as Information Technology Enabled Services and labour-intensive manufacturing, will suffer reduced margins, or may even become unviable. Such activities ideally need policy support for transition where feasible to more productive alternatives over a reasonable period. These could be for improvements of process and product design, with automation or computer aided processes, as in jewellery, or skills for a different activity. For high-value products, enhanced quality may be needed to deliver perceived value.

The Indian rupee has depreciated against the US Dollar continuously on average from 1980, except for 1992-95 when it traded between Rs 30-33 to the dollar, and 2003-2011 when it was Rs 44-48. This reflects the relative strength of the economies and market sentiments, with the US having been a more productive economy, with lower inflation.

Excluding countries dependent entirely on natural resource endowments, such as oil, or attributes such as being a tax haven, strong currencies reflect strong economies. Examples are the US dollar, euro, British pound, Japanese yen, Swiss franc, Chinese yuan, and Singapore dollar. The relative weakness of economies is likewise reflected in weak and depreciating currencies. High inflation or internal contention and turmoil undermine the strength of an economy, and the currency usually depreciates.

The advantages of a strong and stable currency are that buying power for imports is protected. For India, this is important for containing expenditure for oil and other energy imports, defence procurement, gold, electronics, withdrawals by foreign portfolio investors, external borrowing repayments, imports of raw materials and intermediates used in manufacturing for domestic markets and exports, and for travel. For a given set of items of expenditure, a strong currency gives consumers more disposable income because of reduced costs, and enterprises have higher surpluses from better profit margins.

In the short run, constraints on movement and economic activity during the Covid-19 pandemic led to increasing inflation in food, gold, transport (including higher taxes on petrol, diesel and alcohol), and com­munication.¹ Some analysts suggest an overweight food component may overestimate inflation. The problem arises if there is a stock policy response of raising interest rates now, whereas our circumstances require a facilitation of flows, and not restraints. This also applies to the level of contention through all government action, as against focus on the economy and security/defence to get us through these times. We need our government to focus on facilitation, not contention. Contention reduces productivity, as do all impediments and shortcomings in infrastructure.

Higher Productivity = Higher Growth = Stronger Currency

Longer term, after recovery, is the declining rupee a foregone conclusion? Yes, if we continue with business as usual. Instead, if we work systematically towards focussed changes for growth through productivity, while dealing with emerging market realities of agricultural shocks and wage-push inflation, this could help build a solid recovery and better long-term prospects. Radical improvement in infrastructure will probably enable breakthroughs in productivity. Equally radical changes in organising human resources, and markets (i.e. second-order infrastructure) could further accelerate growth. However, these require choosing appropriate objectives, disciplined teamwork in design and execution, and no disruptive political developments. If we are successful, we will grow faster and the rupee will strengthen.

Infrastructure And The Currency

The rupee will continue to depreciate unless we become more productive and grow faster. India is lagging so badly even among emerging markets that we have to think of doing things differently. 

Krishna Kant, 2020:

https://www.business-standard.com/article/economy-policy/india-s-10-year-growth-one-of-the-biggest-laggards-in-asia-em-peers-120113001325_1.html). 

Impro­ved infrastructure is a way to achieve better productivity and higher productivity and growth.Some of our difficulties stem from efforts to contain the pandemic, but the obstacles of poor logistics, power, communications, water and sanitation, have to be surmounted for growth. These services will also enable pursuing higher standards and skills for manufacturing, processes, and emissions control. Poor services and standards are major deterrents to transnationals looking to set up in India or to relocate here.² For pharmaceuticals, the government has announced a policy for bulk drug parks and for domestic manufacturing of import-dependent APIs. While additional steps such as anti-dumping duties and targeted manufacturing incentives may be needed, similar systemic initiatives are required for industries such as chemicals, machinery, automotive components, and electronics. All of them need smooth inward and outward logistics for good results.

Illustration: Binay Sinha

In addition, another serious deterrent for transnationals is the unpredictability of policies, and the hurdles encountered by large international investors in India, for example, Vodafone, Amazon, Walmart, Cairn, major automobile manufacturers, and so on, including in resolving contracts and disputes.

Targetted steps are required on the lines suggested in the previous citation and in the next,³ such as global anchor investors for priority industries, in the way that Suzuki was to automobile manufacturing, with nodal government coordination, not harassed and impeded, but nurtured to ensure success. Such initiatives need to be explored and evaluated, and if feasible implemented for select industries. Exports cannot be successful without imports at low tariffs, because of global value chains. There is also the issue of finance including scale, and finally, purchase orders, especially for manufactured products. Government’s enthusiasm for start-ups is not sustained at the next phase with purchase orders and funding for commercial scale, once start-ups are past venture rounds. This leaves promising manufacturing enterprises floundering, and unable to scale up.

Export capabilities need to be developed and built on scale, adapting policies in other emerging economies such as Bangladesh and Vietnam. While Vietnam has the advantage of proximity to China, its steps to build capacity need study and consideration, as also for Bangladesh. We should aim to build India’s export capabilities over time, to contribute to a strong economy and more stable currency.

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Shyam dot Ponappa at gmail dot com

1: a) Remya Nair, 2020: https://theprint.in/economy/its-not-just-food-prices-covid-pandemic-has-also-helped-push-inflation-to-7-6-in-india/546473/

b): Dharmakirti Joshi & Adish Varma, 2020: https://www.crisil.com/content/dam/crisil/our-analysis/views-and-commentaries/quickonomics/counterintuit­ive-inflation.pdf

2: Hetal Gandhi & Isha Chaudhary, 2020: https://timesofindia.indiatimes.com/blogs/toi-edit-page/factory-of-the-world-how-india-can-be-a-plus-one-destination-while-reducing-dependence-on-china/

3: Ajay Srivastava, 2020: https://timesofindia.indiatimes.com/blogs/toi-edit-page/from-start-to-port-a-nine-steps-framework-for-making-india-a-great-investment-destination/