The easy availability of electricity is a critical enabler of socio-economic growth in India, writes India Inc. CEO Manoj Ladwa.

The basic building block for sustained economic growth is now in place. From a chronically electricity-deficit country, India has, in a space of three short years, turned the power sector around – so much so, that not only does the country now have surplus power, it is also exporting electricity to neighbouring countries such as Bangladesh, Nepal and Myanmar.

When Prime Minister Narendra Modi appointed Piyush Goyal as Minister of State for Power, Coal, Mines & Renewable Energy (Independent Charge) in 2014, India was reeling under a massive deficit of 87 billion Kwhs or 9 per cent of demand. Result: the economy was suffering long, daily power cuts and the use of diesel generators for back-up that sapped productivity and ate into corporate profitability.

There was little light visible at the end of the tunnel as India’s state-owned power distribution companies, or discoms as they are called, were also bleeding. With cumulative debts of more than $50 billion, they were having to borrow money just to keep their operations running, thus, pushing them further into debt.

This turnaround has made it possible for the Indian government to announce that it would be in a position to fulfil its election promise of providing power for all by next year – a full year ahead of schedule.

This is an incredible achievement. The easy availability of electricity is a critical enabler of socio-economic growth. Being the basic building block of prosperity, power is also the key enabler of several flagship schemes announced by the Prime Minister. There can be no Make in India, Digital India, Start-up India, Skill India or even Swacch Bharat without the provision of adequate electricity.

Prime Minister Narendra Modi’s dream of an educated and empowered nation would also have come to nothing without adequate electricity. Power, as we all know, is sine qua non for children to study, do their homework and prepare for examinations.

The rejuvenation of the power sector will have an impact far beyond the remit of the ministry itself as will help change the lives of millions that currently live, or till recently lived, in darkness.

Power, arguably, is the most critical component of the Prime Minister’s promise of providing jobs for the 10-12 million youth who join the Indian workforce every year. Key to accomplishing this goal is the aim of increasing the share of manufacturing from 18 per cent of GDP at present to 25 per cent of GDP by 2025.

Among several constraints that are holding up the growth of the manufacturing sector was the lack of adequate power to run the machines in thousands of small and medium enterprises that form the backbone of any economy and are the main incubator of the millions of low skilled jobs that really bring prosperity to people at the bottom of the pyramid. I have purposely left out large and heavy industries because they can afford to set up captive power plants or make provisions for back-up power from diesel generators.

But Minister Goyal himself will admit that his job is only half done. Almost a quarter billion Indians still do not have access to electricity in their homes. Turning this situation around and providing power to fuel the expected manufacturing boom in the coming years will consume the current surplus and call for additional sources of electricity.

This is where the Prime Minister’s ambitious target of achieving 175 GW of renewable energy capacity by 2022 will come into play. Achieving this target will not only to enable India to meet its emission goals under the Paris climate accord but also to meet the additional demand that improving economic growth and rising numbers of power consumers will generate.

There will be challenges, for sure. Financing large projects in India remains an issue as the banking sector, which is in the throes of a bad loan crisis, is unable to provide large volumes of credit. Then, the issue of balancing the infirm power that wind and solar plants generate – the potential this has to destabilise the grid – has not yet been resolved.

But neither of these problems is insurmountable and there is every reason to be optimistic that solutions will be found.

This edition of ‘India Investment Journal’ tracks Minister Goyal’s mega power challenge as he travels around the world to scout for investments, besides the usual cross-sector coverage.

Manoj Ladwa is the founder of India Inc. and chief executive of MLS Chase Group @manojladwa

Tagged: , , , ,

The year 2016 was one of the best years in recent times for initial public offering (‘IPO’) in India owing to stronger macroeconomics, pro-business political regime, continuing regulatory reforms and an overall positive investment climate.

Indian companies raised more than $4bn through IPOs in 2016, which is close to the aggregate equity raised over preceding four years from 2012-15.



The IPO pipeline for 2017 looks promising with some of the large companies expected to tap the equity markets including NSE, SBI Life, UTI Mutual Fund, Railways and Insurance public sector undertaking (PSU). Economic fundamentals are improving and the equity index performance is at a record high. India continues to be one of the top destinations for investments globally.

Tagged: , , ,

The Goods & Services Tax (GST) is one of the most significant reforms in post-independence India which has rightly garnered interest of businesses across the nation. Here a tech enthusiast highlights why digitisation is the key.

For decades, India has been thriving on a ‘red tape’ culture. India as a trade economy has been functioning on high import tariffs, excises and turnover tax on goods and services having enormous cascading effects, leading to a distorted structure of production, consumption and exports.

It’s not a target but it remains an aspiration. Given the trajectory of the Indian economy, there’s every reason to be optimistic that this ambitious goal is within reach.

It is not an official target and no one in the government will speak about it on record. But in private, off-the-record conversations, they will admit that receiving $100 billion in annual foreign direct investment (FDI) inflows is an aspiration the Indian government is not giving up on.

That figure isn’t quite a mare’s nest. China consistently crossed that mark during the heady period when it was growing at 9-10 per cent per annum. And, to put things in perspective, India isn’t too far away from that mark.
Achievable ‘target’.

The Year 2017 had been ear-marked as UK India Year of Culture by Prime Minister Narendra Modi during his tour of Britain in November 2015. That announcement became a reality when Indian Minister for Finance and Corporate Affairs, Arun Jaitley, represented the Government of India at a historic reception in Buckingham Palace in London recently.

While the year is set to be packed with an array of cultural events, both in India and the UK, the key message amid all the glitz and glamour is a familiar one: that India is crucial to the British economy, which is on the brink of breaking away from the European Union (EU).

Indian Finance Minister Arun Jaitley has carefully nursed the country’s economy back to sound health.

He is equally at home rubbing shoulders with the world’s leading industrialists and investors in Davos, London and Singapore and inviting them to invest in India as he is strategising the nitty-gritty of how to win elections in hinterland Indian states. And all this when he isn’t dispensing advice to some of the thorniest legal problems of the land.

Foreign investors often complain about India’s byzantine bureaucracy and demands for unaccounted cash to grease the system and speed up decision making.

Though ministers and senior bureaucrats in New Delhi no longer make such demands, there are reports that there has been little improvement in the lower bureaucracy and in some states.

Rising demand at the bottom of the pyramid and more activity coming under the tax net will lead to an increase in demand for a host of consumer goods produced by Indian and foreign companies.

Financial inclusion is, arguably, the first flagship initiative of the Narendra Modi government to meet with success. To the four such schemes that people usually count as being part of the programme – the Pradhan Mantri Jan Dhan Scheme (PMJDS), the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Atal Pension Yojana (APY) – we can now add another, possibly the most important, one – demonetisation.

Gujarat has forever been the land of brave entrepreneurs and industry friendly policies have led to the proliferation of many successful micro, small and medium enterprises (MSMEs).

Fifty-two-year-old Kishore Patel of Ankleshwar based printing and packaging firm Techno Packaging credits his success to the business friendly and technology savvy nature of his state Gujarat. Patel started out from a small godown (warehouse) in 1998 supplying cartons and labeling equipment to local industries in the vicinity. His familiarity with computers and an inherent urge to expand the business matched other similar entrepreneurs around and he quickly graduated to more sophisticated offset colour printing, scanning and visualisers. As businesses grew big feeding on the state’s industry friendly policies, so did Patel.