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

A leading consultant analyses the factors that have made investing in India easier and a more rewarding experience as long as investors go in with a level of preparedness.

The International Monetary Fund (IMF) has recently altered its predicted growth rate for India slightly downward to 6.8 per cent, but this is still attractive compared to the sluggish rates of growth elsewhere in the world. Foreign investors’ confidence in India has also recently improved, making it the eighth most attractive destination for foreign direct investment (FDI). Meanwhile India’s ranking in the World Bank’s league table for ‘ease of doing business’ is rising, albeit at 130 the improvement isn’t over yet!

These changes have been strongly influenced by the government’s attempts to make India a more attractive market by, for example, implementing demonetisation in November 2016, increasing online transactions and the planned introduction of a common nationwide Goods and Services Tax (GST) in July.

Make in India, one of the flagship initiatives launched under Prime Minister Modi, has led to a step change in FDI inflows, writes an investment facilitator.

The total FDI inflows into India stood at $60.1 billion in 2016-17 — the highest ever in a single year. Compared to 2013-14, this represents a 75 per cent increase. India’s achievement is even more stark when compared to falling global FDI flows as highlighted by UNCTAD. More importantly, Make in India has enabled long-term structural changes such as opening new sectors for FDI, increasing the ease of doing business, cutting the red tape and improving the physical infrastructure.

A new report by a leading UK-based think tank claims there is enough untapped trade potential to offset the possible effects of Brexit on exports to the European Union (EU).

Open Europe, in its research titled ‘Global Britain: Priorities for trade beyond the EU’, has said that Britain can make up for any export loss as it exits the EU by building on under-developed links with countries like India and making it a priority in its trade negotiations.

“There’s little point making policy looking at just today’s world. According to projections, Germany’s GDP will grow by 14 per cent between 2017 and 2030. Over the same period India’s is expected to more than double. So, we have modelled how the data will appear in 2030, using predicted growth figures,” the report says.

India’s largest state has caught the attention of investors of late but has a long way to go.

In one of his earliest interactions with the press after the formation of Niti Aayog, India’s premier think tank, two years ago, Vice-Chairman Arvind Panagariya took exception to Rajasthan being referred to as a “BIMAROU” state. The oft-used acronym means diseased or sick in Hindi and is made up of the Indian states of Bihar, Madhya Pradesh, Rajasthan, Odisha and Uttar Pradesh. It was coined in the 1980’s by prominent demographer and economic analyst Ashish Bose to refer to the poor economic conditions in these states.

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.

The Indian government’s goal to achieve self-reliance is on track, writes a senior adviser in the defence sector.

India’s defence budget has grown manifold over the last seven decades to $39 billion in 2017-18, which is around 1.6 per cent of the country’s gross domestic product (GDP).

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.

The Smart Cities Mission of the Government of India is one of the most challenging and ambitious urban development agenda, writes an urban infrastructure enthusiast.

The objective to develop 100 Smart Cities over five years is a laudable commitment towards urban transformation. The mission is launched at a time when India’s urbanisation is growing faster than the rest of the world.

The impact of the Indian government’s move to decommission some high value notes from circulation will fully pan out in the New Year.

The 50-day window sought by Prime Minister Narendra Modi for completing the demonetisation of high value Rs 1,000 and Rs 500 notes is now over but the jury is still out on the impact of the move that is, arguably, the most daring, and far reaching, economic reform ever undertaken by any Indian government.