Archives: Publication

Renewable power sources have several shortcomings which include lower efficiency in generating power and shorter life-span of the plants.

The success of India’s net zero pledge by 2070 rests heavily on successful energy transition. In the energy sector, power contributes most to greenhouse gas (GHG) emissions; roughly 50 per cent of India’s total emission emanates from the power sector.

Against this background, India has gone all out to expand installed capacity of renewable electricity, be it solar, wind, or biomass, even though there seems to a preference towards solar. And rightly so, as India is blessed with abundant sunlight for most of the year. According to the draft electricity policy, India plans to stop building new coal-fired power plants beyond those already under construction. This would be a significant victory for climate campaigners and would leave China as the only major nation openly adding new coal capacity.

However, renewable electricity has several shortcomings which are hardly mentioned in discussions.

Firstly, renewable electricity sources like solar/wind has low efficiency factor compared to fossil-based sources like gas/coal. For instance, a 100 MW solar plant (wind power) produces on an average 20 MW (30 MW) electricity. By contrast, a gas/coal-based power plant generates 80 MW. Hydro also has high efficiency in the range of 70-80 per cent. This explains why the share of renewables in power generation is stagnant at 12 per cent even though there has been a significant increase in capacity.

Shorter life-span
Secondly, the life-span of renewable power plants is much than shorter than traditional power plants. For instance, the life of a wind farm is typically 20 years and that of a solar concentrated/photovoltaic plant is 30 years. A coal (coal+ carbon capture and storage) power plant, however, can be safely operated for 40 years. The life of a nuclear power plant is even higher, at 50 years.

Thirdly, unlike in coal/nuclear based power, India is yet to be self-sufficient in the entire supply chain of solar-based electricity. Thus, fast-forwarding into renewables has the added risk of international price movements. However, on the positive side, the price of photovoltaic modules has fallen significantly in recent years.

Also, power from renewable sources exhibits large variation in a day due to vagaries of nature (wind speed, sunlight, etc). In other countries, solar/wind capacity augmentation goes hand in hand with other sources like hydro power, particularly pumped hydroelectric energy storage (PHES), for load balancing. PHES has emerged as one of the most important sources of hydroelectric energy storage used by electric power systems for load balancing. However, this does not seem to be in much favour in India. Only recently India has woken up to the grid balancing aspect and tenders are being floated for storage of electricity in batteries along with construction of renewable solar plants.

Without an efficient system of recycling/disposal of batteries, India may face a bigger risk in future. Over the years, a lot of investment has came into energy-intensive sectors from developed countries, thanks to lax environmental norms in India.

To create a level field for domestic producers, European Union is planning to impose a carbon border adjustment tax on four imported commodities (aluminium, steel, cement and chemical fertiliser) from October 2023 based on the amount of carbon emissions resulting from producing a product. A decade down the line, it will not be surprising if the list is expanded to include battery recycling/disposal, etc.

Probably, India should focus on coal-based electricity with carbon capture as we have abundant coal reserves and are on stronger footing on the technology front. The emphasis should also be on nuclear energy as the country has successfully constructed and operated nuclear plants.

The writer is Professor, NCAER. Views are personal

Farm mechanisation drive hit by limited R&D.

The recently released NCAER White Paper on ‘Making India a Global Power House in the Farm Machinery Industry’ reveals there is a mismatch between what the organised Indian industrial sector is producing and what the small and marginal Indian farmers want at an affordable price. One of the challenges on the supply side is limited research and development (R&D) in the non-tractors farm machinery (NTFM) sector.

Medium-to-large firms form a relatively small proportion of the overall industry and are the only ones that are likely to do R&D. The industry is dominated by small producers and village craftsmen at the bottom, who survive by copying successful products or assembling cheap imports.

While total R&D has gone up, the composition has shifted towards the private sector. Though the number of patents filed in agricultural engineering is growing, its share in the total is still very small.

The R&D programmes in India have so far mainly served the rice-wheat cropping system. The range of the equipment is not wide enough to facilitate agricultural diversification. Equipment for the mechanisation of hill agriculture and horticulture is not commonly available. There is little innovation, particularly in operations like irrigation, plant growth and post-harvesting.

There is limited academic-industry collaboration in this field. India lacks an efficient system for transfer of new designs/technology developed by research institutes to manufacturers/fabricators. Initiatives like the Technology Development Board (TDB) under the Department of Science and Technology (DST) exist but with limited impact. There is a need to develop links between research institutes and industry.

Policy moves
R&D programmes should focus on the development of appropriate farm machinery for medium, small and marginal, and women farmers. It should develop region- and crop-specific machinery which also addresses recovery and management of crop residue.

Innovations in light farm machinery, solar-powered equipment and smart/precision farming may be encouraged. Agricultural universities and Indian Council for Agricultural Research (ICAR) institutes that have sufficient manpower and R&D facilities for mechanisation should be identified and assigned the responsibility for R&D in different agro-economic zones.

Similar to the Bayh-Dole Act of the US, India needs to enact a law that enables universities, non-profit research institutions and small businesses to own, patent and commercialise inventions developed under government-funded research programmes within their organisations.

Interface for academics and industrialists through Technology Transfer Offices by the DST can be strengthened. Industries can use public academic lab facilities for a small fee. R&D projects can be co-funded by universities and private partners. The Start-up India scheme should be implemented at ICAR institutes. Incubation cells to encourage entrepreneurship should be developed.

Technoparks can be established in new or existing clusters where institutions, private firms and individual faculty can work together on research projects. Research-linked incentive (RLI) is another tool to encourage innovations in light farm machinery and precision farming.

Both research and entrepreneurship ecosystems should be created and encouraged in Industrial Training Institutes. District-level patent offices need to be opened and strengthened, and the patent offices of State agricultural universities need to cater to the needs of the local communities. Corporate partnerships, like Maruti Suzuki Innovation is doing in the auto sector, will also help. Imparting some amount of engineering knowledge to more farmers can spur innovation.

Bhandari is a Professor, and Joshi is a Fellow, at NCAER. Views are personal

Data accuracy. To improve data system, NSO is now the nodal agency for all statistical activities.

The National Sample Survey, under the Ministry of Statistics and Programme Implementation, has been conducting large-scale sample surveys on All-India basis since the 1950s.

These surveys are the most important and reliable sources of data on several subjects including employment, household consumption, housing conditions, health, education, village amenities, and domestic tourism.

The reference period for these surveys is a crucial aspect of the entire data collection system. The reference period refers to the time period for which the data are collected. It can vary based on the type of data, the methodology used for collection, and the purpose of the data. The reference period can be daily, weekly, monthly, quarterly, or yearly.

The survey period, on the other hand, is the period during which heldwork is carried out. Clearly, the reference period and the survey period are two different concepts. The time lag between the survey period and the reference period can lead to confusion and misinterpretation of data. Talking about a specihc survey, the annually conducted Periodic Labour Force Surveys (PLFS) are the principal source of data on employment, unemployment and underemployment situation in the country.

The survey period of any PLFS, say PLFS 2019-20, is July 2019 to June 2020, coinciding with the agricultural year. And the reference period for the usual status of employment is last 365 days preceding the date of the survey. Therefore, for the respondent who was surveyed on, say July 1, 2019, the information related to his/her employment details pertains to the period July 1, 2018 to June 30, 2019.

And for the respondent who was surveyed on, say June 30, 2020, the similar information pertains to the period July 1, 2019 to June 30, 2020. This makes a total of 730 days for which data on employment get collected, whereas, for all practical purposes, the data collected in this round of survey is referred to as that for 2019-20.

Whether the data users consider these data for the hnancial year or the agricultural year (which is what it is supposed to be) is another issue.

Recall lapse
Recall lapse, of course, is an even bigger issue, especially in the case of expenditure-related surveys, like health, education, and particularly domestic tourism. Across the world, the reference periods are of much shorter duration. International Labour Organization (ILO) recommends a reference period of one week for labour force surveys, and the United Nations recommends a reference period of one month for household surveys.

For instance, in the United States, the Bureau of Labor Statistics considers the calendar week that contains the 12th day of the month. Labour force surveys in OECD countries consider the last four weeks as a reference period. Australian Bureau of Statistics considers one week before the date of the interview as reference period. The PLFS surveys also, of course, collect information on the current weekly work status besides the usual work status, and the reference period for the current weekly status is the last seven days. The short reference periods can reduce the risk of errors or misinterpretation.
Respondents are more likely to provide accurate and reliable information about their activities and behaviours if the reference period is short. In contrast, longer reference periods may result in respondents’ recall lapse leading to inaccurate data.

Also, shorter reference periods can capture changes in behaviour and activities that occur due to seasonal changes. The issue of recall lapse is of much greater concern in the case of expenditure surveys, such as the Domestic Tourism Survey. This survey enquires whether the household has completed an overnight trip in the last 365 days. If yes, then the expenditure details of all of those trips are recorded. That makes the total period to be one year, as described earlier.

Further, an overnight trip is defined as the movement outside the usual environment for the duration ranging from less than 12 hours in two consecutive calendar days to six months. Hence, a trip that started about a year-and-a-half prior to the date of the survey also gets recorded, along with its details on expenditure. The information collected, therefore, is for about two-and-a- half years.

Both recall lapse and misinterpretation of the reference period for tourism expenditure are quite a possibility in such a case. India’s data system also faces challenges related to data quality, timeliness, and coverage. The quality of data can deteriorate due to under-reporting, measurement errors, and sampling biases. Timeliness is an issue in India, as data are often released with a lag.

Coverage can also be a challenge, as some population groups are under-represented in the data.

Govt initiatives
To address these challenges, India has undertaken several initiatives to improve its data system. In 2019, the government established the National Statistical Office (NSO) as the nodal agency for all statistical activities in the country.

The NSO aims to improve the quality, timeliness, and coverage of data. The NSO has also introduced several reforms to improve data collection and analysis. For example, the NSO has developed a computer-assisted personal interviewing (CAPI) system for data collection, which has improved the accuracy and speed of data collection.

Going forward, NSO could potentially leverage machine learning and artihcial intelligence (AI) technologies to enhance their data processing and analysis capabilities. However, the reference period may be required to be revisited and aligned with international best practices. This will enhance the quality and usefulness of primary data collection in the country.

Munjal is Professor; and Baruah is Associate Fellow at National Council of Applied Economic Research. Views expressed are personal.

Mission LiFE (life style for environment) was introduced by Prime Minister Narendra Modi—at COP26 in Glasgow on 1 November 2021—as a mass movement for “mindful and deliberate utilization, instead of mindless and destructive consumption” to protect and preserve the environment. Incidentally, India is the first country to include LiFE in its Nationally Determined Contributions. As our PM quotes “India will put forward and propagate a healthy and sustainable way of living based on its traditions and the values of conservation and moderation, including through a mass movement for LIFE, as a key to combating climate change.” The Mission builds upon India’s environment-friendly culture and traditional practices which has resulted in carbon footprint per person in India to the tune of 1.8 tonnes per year as compared to the global average of 4.5 tonnes.

Mission LiFE envisions three core shifts towards sustainability in phases viz. change in demand, change in supply and change in policy, by collective actions of individuals, industry and the Government. In phase one, the shift can be achieved by changing demand through nudging individuals across the world to practise simple yet effective environment-friendly actions in their daily lives. In phase two, one can expect that changes in large-scale individual demand actions following phase one would lead the industries and market to respond to cater to the new consumer preferences. Lastly, by influencing the demand and supply dynamics of India, the long-term vision of Mission LiFE is to trigger shifts in large-scale industrial and government policies that can support both sustainable consumption and production.

Of course, these phases are more of a normative concept and they occur in tandem in real life. Whatever one proposes about nudging individual actions, in reality, command and control action on policy front may be the driving force in steering the consumers towards sustainable consumption and production pathways.

No doubt, the positive spill-over would play an important role in supporting sustainable production process. For instance, as we move from fossil-based electricity production to renewable sources, demand for railways for carrying coal, a major source of revenue for railway sector will cease. This will also open up space for carrying other freight through railway leading to sustainable/low carbon freight system. Currently, railways modal share is only 30%, which is unusually low for a country of a size like India. Over dependence on road transport is a lot more costly and carbon intensive. Thus, any shift towards railway is always welcome. That is the vision of India’s new logistics policy.

The pricing of urban public transport system is a key factor whether commuters will avail or not. Another important aspect for its better adoption is the availability of a network of feeder transport for last mile connectivity. In Luxembourg public transport is free and in many countries, in the west, its cost is kept low to encourage its usage. Moreover in some European cities, you can avail public transport till 200 metres of residence. By contrast, Delhi Metro Rail Corporation, the lifeline of the national capital’s cost is quite high by world standard. Moreover, if one includes the cost of last mile connectivity after getting down from the metros, the cost aggravate further. Given the affordable pricing of 2 wheelers electric vehicle, commuters are discarding metros in Delhi and preferring to use their own vehicle. The extremely high growth of registration of new 2 wheelers electric vehicle in NCR probably suggests so. Thus, one also needs a dynamic pricing system for public transport system.

Reduced consumption of animal protein is considered to a sustainable consumption pathway as it reduces carbon footprints. However, in India, animal protein is the cheaper/affordable source of protein for poorer households. Thus, a dichotomy exists, income level needs to rise before one advocates this policy choice. Moreover, livestock is an equally important source of income for small and marginal farmers. Thus, contraction of livestock sector has far reaching implications- one need to provide them alternative source of income before one contemplates about dietary changes in Indian households.

Sanjib Pohit is a Professor at National Council of Applied Economic Research (NCAER). Somya Mathur is an Associate Fellow at NCAER.