The coal story

India has come a long way since 1774 when John Sumner and Suetonius Grant Heatly of the East India Company first commenced commercial exploitation, in the Raniganj Coalfield along the Western bank of Damodar river in Bengal. Today India is the fourth largest coal producer in the world with Coal India Limited being the biggest company in the world, producing around 500 million tons of coal annually. The East India company rejected the coal and continued its dependence on British coal.

It is great to see that with the removal of corruption in the coal mining allocation sector, there is a potential windfall awaiting the consumers. Through the efficient selling off of the coal blocks, to gather immediate revenue, the government has set itself up to substantially reduce coal imports, and costs, in its energy sector. The new policies are bringing greater productivity and transparency. The introduction of modern mining methodology to the huge reserves of Indian coal, and its transportation and logistics, can be a huge boost to Industrial growth. It remains the cheapest form of energy, albeit, at an environmental cost. Carbon emissions will increase in thermal power plants, until less polluting green energy sources or gas from neighboring countries arrives via pipelines, to meet the need of a billion people.

In a surprising news Indian ‘Power consumers are likely to gain to the extent of Rs 69,310 crore (693 billion Rupees)  from the reduction in electricity tariff enabled by the auction of nine coal blocks to power sector firms so far,’ power ministry said in a statement today in the Economic Times. The Indian coal ministry also informed the production of raw coal in the country during April-November 2016-17 was 391 million tons as compared to 385 MT during the corresponding period of previous year, an overall growth of 1.6 per cent. “The coal ministry has given special focus to decrease coal imports. Government has saved about Rs 20,000 crore in the year 2015-16 and about Rs 4,844 crore in the first four months of the current year. The efforts on this front would lead to a further replacement of 15.37 MT of imported coal by March 2017,” the statement said.
On another note Rajiv Agarwal, Secretary at Indian Captive Power Producers Association (ICPPA) asked for rationalization of tariffs in the sector. He also said, assuming the government agreed to forego entire tax on coal, the cost of coal will reduce by 50 per cent and the corresponding electricity cost by 40 per cent. This will turn all the discoms profitable. “Prices can be reduced by further 50 per cent if CIL is able to bring its manpower costs to International norms. Power cost will further reduce if costly NTPCBSE 0.50 % purchase pacts are rationalized,” he said. The greatest threat to efficient and stable power and energy distribution in India lies in the hands of undercapitalized discoms who give away free power to large groups of constituents. Pay for use must be instituted as a fixed or metered approach and costs to all the consumers, and only the poorest should be subsidized.

India sits on the cusp of an energy revolution as it moves from chronic shortages, to a more stable policy after centuries of inefficiency. Enormous work still has to be done, but as far as I can see carbon energy will continue to grow for decades. Till ambitious plans for nuclear, solar, wind, biogas, hydro, tidal come to fruition, coal remains the king of a dirty heap. As the economic conditions improve, the government has to remove current subsidies to agriculture and other consumers, and come up with a rationalized tariff and subsidy policy, which maximizes revenue, and minimizes hardships for the poor. The coal and thermal energy sector is showing that the more India invests, the higher chances of increasing productivity and growth, in the short to medium term for its people.

Human contentments


Contentment is a vexing question as I have not had anyone ask how much, is too much of it? There just appears to be a huge shortage of it, in the modern world. The accompanying painting depicts, what may today be an old man, with his iPad, and wine with a curious grandchild. Can only the old be content, or is it a trait, that can be inculcated into 5 year old monks, who have just entered an order. Buddha said contentment came from within, and we should not look outside for it. Yet our constant contact with the external universe, is unavoidable, and we have to confront our hostile environment, and still survive and prosper.

Marcus Aurelius wrote “Live with the gods. And he who does so constantly shows them that his soul is satisfied with what is assigned to them.” The concept of plenty and a world of cornucopia overflowing, is some people’s idea of contentment. Others believe that giving up everything external, is the way to contentment (the naked saint).  It is only when all our base needs in Maslow’s hierarchy are met, can we even strive for the next state, according to others. Yes the laughing young Tibetan monk has become so rare, and times have changed, as the world around us has changed. We have a belligerent China seeking its place on the world stage, or as Zhuang Zhong said to find its place in nature. We have a burning middle east, where war has displaced millions of refugees, needing humanitarian assistance for food, health and education. Countries in Africa and Asia are recovering from decades of misrule and economic backwardness. Contentment is slowly dying across our world, it seems.

For those who claim that money is the source of happiness and contentment, “There is also the concept of the diminishing marginal utility of income (DMUI), which is that money has no effect on happiness, once a certain income level has been reached, and which represents wealth and happiness as having a curvilinear relationship.” Veenhoven, Ruut (1991) stated in “Is Happiness Relative?” We have to move into a world of greater economic parity, where wealth is more broadly shared, to meet humanity’s basic needs. There is much mistaken talk of different races and religions to divide us. The last I looked there is only one human race and we are all in it together. Shared prosperity is the easiest way to increase contentment in our world, as greater wealth does not buy greater happiness

‘This is because happiness is really a state of in-and-out flow of one’s energy. Using or giving money is an expression of out-flowing of one’s life-state. Attempt to just hoard more and more in the belief that it brings more happiness can lead to the opposite result if only because the means – that is the pursuit of money for happiness – has unwittingly become the ends. (Wikipedia)’ There has to be a better way and that way was shown by the thinkers and philosophers over the centuries. I want to be that man sitting in that chair, with my communicator in hand, contemplating the state of our universe, as my body slowly turns the red wine, into me .Yet my true leisurely activity will be in playing with that grandchild and passing on all my wisdom, through her, into our future. Contentment is a state of being and having a healthy body helps.

Diabolical schemes


To read some of the reactions of the opposition in India one would imagine that the current ruling BJP party has unleashed diabolical schemes, to crush the poor farmer and the common man. Financial tyranny has been unleashed and the suffering is unimaginable, and the GDP growth is soon going into a black hole. The preposterous idea that untaxed wealth somehow benefits the poor by reducing bust\boom cycles is ludicrous. The cashless society based on digital transactions is coming to India, at a whirlwind pace and green shoots, are coming up everywhere. Indian jugaad or the spirit of the people to manage all hardships, and still survive and prosper, is legendary. Some numbers below will show the massive changes going on currently, in the fastest growing economy.

800,000,000 credit and debit card are in circulation in India and 450 million have become active. There are 240 million e-wallets activated in India in just one and a half years. The numbers coming out of demonetization are mind boggling in their enormity. An estimated 84% of the total currency issued by the Reserve Bank of India has to be exchanged for new notes. In the fastest growing economy, it is like the job of changing the wheels, of a moving superfast train. Such a humongous social interaction between the populace for replacing the old notes in Banks, has had a social benefit, as people have suddenly emerged from the shadows. The Banks have increased transactions considerably and the ATMs and branches, will normalize eventually. It was an exercise in good governance, without the preparation and diligence, required for such an enormous event. The people have still come out largely favorable even though minor hardships were suffered by the common people to adjust to the new notes. The RBI and banks have to do a better job of implementation and not, make their incompetence, the reason for political unrest.

The arrangement for mass distribution of your largest replacement notes became a quick bottleneck. ATMs did not work as the new two thousand rupee notes, do not fit into current ATMs and need major efforts to recalibrate. As per RBI, about 8.45 thousand, billion worth of value, or notes, of the scrapped Rs 500 and 1,000 notes, were deposited with banks, by November 27. The huge bonanza of unturned in old demonetized notes, will be a net gain against the outstanding liabilities of the RBI, and a direct gain for the government. The Government can then turn around and deposit those funds, into newly opened Jan Dhan accounts, directly to the consumers. In a bonus of the digitization of currency the redistribution of wealth, can take place overnight. The corrupt will pay taxes and penalties on their holdings, and the money will come in as deposits for the Banks. These deposits and be turned into loans, and will be lent out in fresh loans to new entrepreneurs, emboldened, by the new digital money revolution.

The Finance Minister has made a poor execution of a huge event, dependent on the poor citizen’s patience. For centuries the Indian populace has been put through, much wanted, and unwanted change. New Delhi has had quirky rulers like Mohammad bin Tughlaq and others, who have tried their hands at currency reform. The use of demonetization as a political and social weapon, is clear, and surprised many patrons and foes alike, of the current ruling party. The inconvenience is enormous to the common farmer, worker, businessman and above all politician. The cash and barter economy of votes for cash favors, has taken a direct hit as the new currency is not yet available, and the old is useless, and has to be replaced.

I am sure the people have seen worst changes, and life will go on, and eventually things will fall, back into line. Corruption and the black economy is not going anywhere, in the Republic of India. It is ingrained into their properties and way of life of the urban masses. The FM is concentrating on rolling out the GST which will be another phenomenal change in direct taxation in South Asia. Only 45 million out of a total population of 1.2 billion pay taxes in India. The myriad tax collections integration into GST will help with the ease of doing business in India, if it is implemented well. Based on the current experience with demonetization, it appears to leave the feeling that the common man; is only waiting for the other shoe, to drop. Come hell or high-water their beloved Modi is taking them on a wild ride. 2017 will indeed prove a turning point in the Indian economy, as the government will soon have resources to carry out its bold agenda for growth. . The Helicopter economy is fast approaching and they will be dropping money directly into over two hundred million individual accounts of the Jan Dhan ( People’s wealth) .

Please fasten your seatbelt and get ready for the ride of your life. The stage is set as By 1 June 2016, over 22 crore (220 million) bank accounts were opened and ₹384.11 billion (US$5.7 billion) were deposited under the Jan Dhan scheme. Expect these to increase substantially in the near future, as the helicopter has been primed for takeoff! The poorest of the poor are about to become centre stage, in a new economic revolution. Will this finally lead to the decades of rapid growth, that is needed to feed, house and entertain the billions? The British are long gone, and now their Rupee legacy is being digitized, and technology on a massive scale, is being unleashed. To the super wealthy who may have been effected by the latest reforms, I will only request to listen to one of the greatest industrialists, and consider their sacrifices to be for the good of the community.  “Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community. -Andrew Carnegie, industrialist (25 Nov 1835-1919)