manasi mulye
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INTRODUCTION
Development of infrastructure is a sine qua non of economic development. For instance, development of agriculture depends, to a considerable extent, on the adequate expansion & development of irrigation facilities. Industrial progress depends on the development of power & electricity generation, transport & communication. Obviously if proper attention is not paid to the development of infrastructure, it is likely to act as a severe constraint on the economic development process in the country.
In this report we propose to cover the following constituents of Infrastructure and their related problem and issues:
Sources of energy in India
Power and electricity
Coal
Oil and Gas
Atomic energy
Non-conventional sources of energy
The energy crises in India
The energy strategy
The transport system in India
The Railways
Road transport
Water transport
Air transport
Communications
Postal services
Telecommunications
Sources of energy in India
Energy plays a crucial role in the economic development. However, the consumption of energy is low in India. Its demand steadily increases with the growth of the economy. A number of researchers have observed a positive correlation between economic growth & demand for energy.
E.A.G. Robinson has noted that a 3% rise in industrial production in the world is accompanied by 2% increase in energy consumption.
In India, where about 35% of the population is either below the poverty line or very close to it, well over half of the population does not have the purchasing power to enter the market for commercial energy. This section of population residing mostly in rural areas survives on non-commercial sources of energy, such as firewood, dung cakes & agricultural wastes.
At present, about 23% of the energy consumed is obtained from non commercial traditional sources.
The pattern of commercial energy consumption is characterizes by a high degree of dependence on oil. The share of oil & gas measured in coal replacement terms is close to 45%.
Power or electricity
Electricity & power generation play a crucial role in economic development. As noted by the Draft Fifth Five Year Plan, “Electricity is the most versatile form of energy & provides an important infrastructure for economic development. It is vital input for industry & agriculture & is of particular importance to a developing rural sector which needs more power for its agricultural operations, for its small scale & agro industries. All sectors of the economy need electricity for their common needs of water supply, transport, communication & domestic lighting.
There is hardly any community or sector which is not affected by a power shortage today. “The future development of the country, therefore, will depend upon the growth of power generation capacity.”
Expansion of generation capacity
Total installed generating capacity in the country rose from only 2300 MW in 1950 to as high as 143800 MW as at the end of March 2006. Electricity generated rose from 55.8 billion KWH in 1970-71 to as high as 394.5 billion KWH in 1996-97 & further to 663.0 billion KWH in 2006-07. During the period from 1990-91 to 2005-06, generating capacity grew at the rate of 4.7% per annum . There was a corresponding expansion of the transmission & distribution networks also. In order to facilitate grid operation & transfer of power from surplus to deficit areas, construction of inter-State & inter-regional lines was undertaken.
The Ninth Plan had contemplated as addition of 40245 MW in the installed generating capacity. However, the actual achievement was only 19015 MW. The total capacity addition in the Tenth Plan was targeted at 41110 MW. However, the achievement was only 21080 MW.
Most of the States now find that raising of resources required for highly capital intensive projects is beyond their capacity. To meet the projected power demand by 2012, an additional capacity of 78577 MW is enviaged in the Eleventh Plan-16553 MW in hydro, 58644 MW in thermal & 3380MW in nuclear projected.
A critical evaluation
The data given above show that while there has been a marked expansion in power generation capacity; there have been substantial gaps between targets & achievements.
There has been an inordinate delay in installing & commissioning of projects; poor project management; late delivery of structural steel, cement & power equipment; labour disputes; funding constraints & technological changes as reflected in the progression of unit sizes of thermal plants.
The plant load factor which indicates the capacity of utilization of Thermal power plants and is thus important indicator of their efficiency has remained 50% for number of years of planning. There are wide Interstate variations.
SEBs face a number of other problems like poor financial and commercial performance which has crippled their capacity to finance future programmes; inability to pay their full dues to the Central Power Utilities which has adversely affected the latter’s future investment plans; heavy T&D (Theft and Distribution) loses including energy sold at low voltage, sparsely distributed loads over large rural areas, inadequate investments in the distribution system, improper billing & theft.
Revenues from selling electricity in most States fall short of buying or producing it. Many States government are providing electricity at very low rates to the agricultural sector (some States are even proving it free) with the result that the burden of subsidy is very high. In fact, gross subsidy involved on account of sale of electricity to agriculture rose from Rs. 5938 crore in 1991-92 to as high as Rs. 26606 crore in 2006-07.
The commercial losses of SEBs have risen considerably over the years. From a level of Rs. 4117 crore in 1991-92, the commercial losses of SEBs rose to the staggering level of Rs. 21110 crore in 2005-06 & are expected to rise further to Rs. 26150 crore in 2006-07. The rate of return of SEBs in 2006-07 was negative at -27.4%.
Sources of power
There are five major sources of power viz. water, coal, oil, gas & radio active elements like uranium, thorium & plutonium. Electricity generated from water is known as hydro-electricity. Coal, oil and gas are sources of thermal power. Atomic energy is generated from uranium, thorium & plutonium.
Hydro-electricity
In 2006-07 hydel power accounted for 17.1% of the total electricity generated in India by the public utilities. The share of hydel generation in the total energy generated in the country was 43.8% in 1980-81. Since then it has steadily declined & was 11.9% in 2004-05. Its share rose to 17.1% in 2006-07.
According to recent estimate India’s hydel power potential is around 600 Bkwh (Billion Kilowatt hour) at 60 percent load factor
The hydel power resources are unevenly distributed in India. Punjab, Himachal Pradesh, Jammu & Kashmir, Kerala, Karnataka & States of the North-East have substantial hydel power potential. Bihar, Rajasthan, Madhya Pradesh & West Bengal have very little hydel power potential. Andhra Pradesh, Uttar Pradesh, Assam, Maharashtra & Tamil Nadu may not have large hydel power potential but if the available hydel power resources of those States are fully harnessed, they can meet a substantial portion of their demand for electricity.
Thermal power
The development of thermal power plants which use coal, oil or natural gas to generate electricity is common where these fuels are available. In the industrialized countries of the West, thermal power accounts for more than 60% of the total power generated. The fuels used to generate thermal power are exhaustible. In the case of thermal plants the initial cost is generally low but their maintenance cost & power generation costs are heavy.
In India Thermal power has been developed on an extensive scale. In 2006-07, share of thermal plants in gross power generated by the public utilities was 79.6%. The main source of thermal power is coal which is the most polluting fuel having disruptive effect on environment. India accounts for 5.7% of the proved resources of coal in the world. These coal reserves are non-renewable & are exhaustible.
Coal
Coal has been considered as the major source of energy in India. It now accounts for 67% of the country’s commercial energy requirement. At present, it is the principal source of electricity in India, accounting for about 78% of its output. Coal mines were nationalized in the early 1970s. This radical move paved the way for the introduction of newer technologies, standardization of equipment & creation of infrastructural facilities.
At present the most important coal fields are Raniganj in West Bengal & Jharia & East Bokaro in Bihar. Other States in which relatively smaller coal deposits exist are Orissa, Madhya Pradesh, Maharashtra, Andhra Pradesh & Assam
Oil & Gas
At present about 44.9% of the demand for commercial energy is met from this source. Some increase in consumption of petroleum was inevitable with the industrialization & development of transport system & had to be met partly by raising the domestic output & partly by the import of crude oil.
The government felt the need for oil exploration on an extensive scale to establish adequate indigenous resources. The Oil & Natural Gas Corporation Ltd. (ONGC) & the Oil India Limited (OIL) were established in 1955 & 1959 respectively to undertake this task. Total removable crude oil resources were estimated in 2006-07 at 756 million tonnes. At current rates of production, existing oil reserves will last about 25-26 years.
Presently the petroleum industry in India meets only less than 30% of the demand, it has made considerable headway since independence. Starting from a modest production level of around 0.25 million tonnes in 1950-51, the production of crude oil rose to 34.0 million tonnes in 2006-07.
Share of domestic production declined to 56% in 1990-91 & further to 23.2%in 2006-07 & thus the pressure of the imports of crude oil on balance of payments increased.
The gap between the demand for oil & its domestic production widened & as a result the import dependence of oil went up to 77% in 2006-07 as against about 51% in 1996-97. This extent of reliance on imports of oil & petroleum products makes India vulnerable to changes in international oil prices.
The other segment of the oil industry, that is refining, has also been developed considerably during the past five & a half decades. The total refining capacity at the beginning of the First Plan was only 0.25 million tonnes per annum.
The effective refining capacity at the end of 1980-81 was 31.8 million tonns in terms of crude throughput. It rose to 69.1 million tonns in March 1999 & further to 136.0 million tonns in 2006-07.
The production of gas was 7.23 billion cubic metres in 1984-85. It rose to 31.75 billion cubic meters in 2006-07. Increasing the production of natural gas, there has to be stress on substitution of natural gas for oil products. In fertilizer production, natural gas can replace naphtha or furnace oil. The advantages of a gas based power stations are it is much less capital intensive, it can be erected in a much shorter period & it is environmentally friendly.
Atomic energy
India is now one of the few countries which have made considerable progress in the field of atomic energy.
India’s thorium deposits have been estimated at 363000 tonnes which are the largest in the world. Monazite is the source of thorium. It is found in Kerala, Karnataka & Bihar. Self-reliance continues to be the thrust area in nuclear power development. The Civilian Nuclear Deal will give a new Flip to this sector.
Non-conventional energy sources
The government has accorded a high priority to promotion & utilization of renewable resources of energy to supplement conventional sources energy. These new non-conventional sources of energy among which biogas, solar energy & wind power are important. India has taken lead in this regard by setting up a Commission for Additional Sources of Energy on March 12, 1981 & Department of Non-conventional Energy Sources on September 6, 1982. While the Commission formulates the policies & programmes, the latter is responsible for their implementation. By the end of March 2006 significant progress has been made in this country towards harnessing our renewable energy sources. Over 183000 MW of non-conventional energy source potential has been created.
Solar energy
In a tropical country like India, solar energy is important renewable source of energy. A major problem in harnessing solar energy is that it is not available in a concentrated form. It is highly variable. Solar energy can be effectively utilized for such low heat applications in which large variations in energy output are not critical. Solar energy for high heat applications at a steady rate can be produced only at a high cost.
In future it is expected that solar energy can be utilized for community lighting, minor irrigation, pumping of drinking water, educational radio & TV sets & communication equipment. Under the Ninth Five Year Plan there was emphasis on expanded use of low grade solar thermal devices, such as domestic/ industrial solar water heaters, solar cookers, solar driers, solar timber kilns & solar desalination. Solar Thermal Energy Programme and Solar Photovoltaic Programme launch by Government of India
Wind power
With an easy accessibility of electricity, the importance of wind power declined. Wind power production was taken up as a thrust area during the Ninth Five Year Plan. A target of at least 2000 MW was envisaged by utilizing indigenous machines. As on 31 March, 2006, wind power generation was as much as 531040 MW as against the potential of 45000 MW.
Biogas
The technology for conversion of animal waste into biogas is well developed & more than 38 lakh biogas plants are already in operation. The pioneering work in this field was done by the Khadi & Village Industries Commission. Presently some other agencies are attempting to raise the efficiency of gas generation & bring down the capital cost of the biogas units. Deen Bandhu & other small size two cubic metre plants are quite popular. Janata biogas plants do not require steel for construction. They are built of bricks at a relatively low cost. Lack of proper maintenance & servicing facilities for such plants in rural areas continues to be major problem.
On March 31, 2006 estimated potential of biogas power was 19500 MW while the actual achievement was only 673.63 MW on March 31, 2005. The biogas programme reduces the pressure on fire wood. It also improves the environmental health in the rural areas & yields valuable organic manure. For popularizing the biogas plants in rural areas the government has given subsidy as well. National Biogas Programme and Biomass Gassifier Programme
Energy crisis
About 35 years ago a major energy crisis developed in India. Since then the government in this country has undertaken certain measures to tackle it, yet the problem remains & calls for serious attention. The energy crisis began with the hike of the oil prices in 1973. In this year, the OPEC (Organization of Petroleum Exporting Countries) had raised oil prices by more than four times. Unfortunately since Independence the country’s dependence on oil as a source of energy had greatly increased. This has put tremendous burden on the economy. The rising oil imports bill over the years further enhanced the trade deficit.
Oil prices & the inflationary pressure
Mineral oil is presently the major source of energy far transport, industry & agriculture. It is also used as household fuel. Therefore, the policy of the OPEC to continuously raise the prices of petroleum products pushed the economies of oil importing countries into the dark era of cost-push inflation.
Growing oil imports bill
Beginning from 1973-74 over a period of three decades India’s oil imports bill recorded a substantial increase. In 1973-74 India had imported oil & other petroleum products amounting to Rs. 1100 crore. Since then oil bill has swollen rapidly. It rose to Rs. 5622 crore in 1982-83, to Rs. 10816 crore in 1990-91 & to a record level of Rs. 258572 crore in 2006-07. Prior to the hike in the oil prices, oil imports were not a major burden as they were merely 12-13% of India’s exports. They rose to 44% of the country’s exports in 1973-74 & to 76% of the exports in 1980-81. During the past few years though the situation has not improved in absolute terms, the percentage of the oil imports bill to country’s exports has been somewhat lower. It stood at 33.2% in 1990-91 & 45.2% in 2006-07.
Demand-supply imbalance in all commercial fuels
The elasticity of consumption of commercial energy with reference to GDP is presently around 0.87. It will definitely rise with the acceleration of growth process in future. This evidently suggests that in coming years the demand for energy will continue to grow & the country will have to step up the supply of commercial fuels adequately to avert further deepening of the energy crisis.
The energy strategy
Until oil prices were raised by the OPEC, no one in the government had the realization that the policy of a high degree of oil dependence was a downright wrong policy. In a country where proven reserves of oil are limited, this policy could have disastrous effects on growth on growth efforts. The increases in oil prices, however, compelled the decision makers to do some rethinking & as a consequence, a new energy strategy has been evolved. The Planning Commission admitted the dangers of the policy of oil dependence in the Sixth Five Year Plan in these terms: “Apart from the heavy strain this will cast on the country’s balance of payments, even the physical availability of oil in the international markets will pose a problem in the recent years to come. This means that if India’s plans of economic growth are not to be hampered by inadequacies of energy supply, reduced dependence on imported oil has to be key element in our development strategy”.
Energy Resources & their exploitation
According to Economic Survey, 2007-08, “the main reasons for the slow development include difficult & inaccessible potential sites, difficulties in land acquisition, rehabilitation, environmental & forest-related issues, inter-State issue, geological surprises & long gestation period. Uranium & thorium are the two minerals used for generating nuclear energy. Assured uranium reserves in India are estimated to be about 34300 tonns of which a little less than half are economically exploitable. Thorium deposits are placed at about 363000 tonnes.
From the inventory of commercial energy resources it appears as if the country has large resources. But when we compare India’s per capita reserves with those of other countries, we observe how unsatisfactory our position is. While India has reserves of 71 tonns of coal per person, the USA has 13747 tonns, former USSR 23112 tonnes and China 1,060 tonnes. Our per capita oil reserves are also small. We have a mere 0.81 tonnes per capita of oil reserves as against 16.32 tonnes in the USA and 2.86 tonnes in China.
Over the past several years, shortage of energy has been a major constraint on industrial development. Further, the sky rocketing prices of oil have swollen the import bill creating a difficult balance of payments position. Keeping these developments in view, a faster exploitation of domestic energy resources is required in the years ahead. It is now generally recognized that coal being the only fossil fuel in which this country is relatively well endowed, it is to be treated as the main source of commercial energy. The problems standing in the way of sustained increase in its production, though formidable, should be overcome. The exploratory effort to discover new resources will have to be intensified if the road transport system is not to be allowed to collapse under the pressure of soaring oil prices. Hydro-power is to be developed with a sense of urgency. It is the only important source of renewable energy. The task is difficult indeed, as a substantial proportion of the potential exists in the sub-Himalayan regions of northern and north-eastern India which are not easily accessible. At present the contribution of nuclear power to the total energy generation is just a little more than 2 per cent. In the coming years, this source will have to be exploited with greater vigour. The urgency for nuclear power development is now felt particularly in view of the concentration of coal reserves in a few States.
Energy Strategy for the future:
Several expert bodies in the past, such as Energy Survey of India Committee (1965), the Fuel Policy Committee (1974), the Working Group on Energy Policy (1979), and the Advisory Board on Energy (1983-88) have stressed the need for long-term energy planning. However, the earlier Five Year Plans showed “more of the short term and medium term concerns than the long-term policy imperatives in energy planning. Besides this, the emphasis of the earlier Plans has all along been on supply problems of the sector rather than on economy in the end use of energy through conservation.” The approach of the Eighth Plan was different. It gave importance to long-term integrated planning with emphasis on both efficient strategy of long run energy supply and energy and use. The Planning Commission spelt out three aspects of this strategy. First, it should ensure gradual shift from non-renewable energy resources to renewable ones. Second, there has to be increasing emphasis on demand management and conservation of energy and efficient utilization of energy resources. Third, a high priority has to be accorded to meeting the basic energy needs of the rural and the urban poor in the immediate future.
The Ninth Plan divided the energy strategy for the future into short-term strategy, medium-term strategy and long-term strategy.
The Ninth Plan document mentions the following measures to meet energy challenges in the long-term:
Demand management through greater conservation of energy, optimum fuel mix, and structural changes in the economy.
Shifting to less-energy-intensive modes of transport.
Moving away from depletable to inexhaustible energy resources.
Greater emphasis on exploration of hydroelectric power, particularly for meeting peak-demand.
Grater attention to research, development, transfer and use of energy-efficient technologies and practices in the supply as well as end-use sectors.
Strategies for Achieving Energy Security:
Increasing exploration efforts through the New Exploration Licensing Policy
(NELP)
Exploring in new areas, especially in deep water and difficult frontier areas, and also exploring in the deeper layers of the producing fields.
Developing faster the newly discovered fields and stepping up the use of new technologies for seismic surveys, work over, stimulation operations, drilling of wells etc. in producing areas.
Improving the recovery factor from existing major fields by implementing Enhanced Oil Recovery (EOR), Improved Oil Recovery (IOR) schemes.
Acquiring acreages abroad.
Tapping alternative sources of energy such as Coal Bed Methane (CBM), Underground Coal Gasification (UCG) and gas hydrates.
Substituting fossil fuels in part by blending with hydrogen and bio-fuels like ethanol and bio-diesel.
Important Schemes launch by Government
Accelerated Power Development and Reform Programme (APDRP)
Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
National Biogas Programme
Integrated Rural Energy Programme (IREP)
Remote Village Electrification Programme (RVEP)
Village Energy Security Programme (VESP)
Solar Thermal Energy Programme
Solar Photovoltaic Programme
Biomass Gassifier Programme
The Alternative Way to Resolve Energy Crises:
Due to heavy consumption and utilization of conventional energy sources, the world is now reaching their exhaustion position. As such it has to cap alternative energy sources to fulfill the growing energy needs. The traditional sources of energy are pollutant and have led to global warming which has started threatening the very existence of environment conditions to human being.
Hence, alternative energy sources have became relevant in modern economies. Alternative sources of energy are the natural resources. They rarely exhaust completely. They are available everywhere and are renewable and cause less or no pollution. Thus alternative sources of energy are most viable sources of clean, unlimited energy which reduce chemical as well as thermal pollution.
India is gifted with abundant supply of natural resources like bright sunshine, long days, wind and water. Thus, countrywide efforts are being made to tap the alternative energy sources to the maximum possible extent. At the national level solar energy parks, windmills, tidal energy parks etc. have been planned and are being built at various locations. Both public and private sectors are attempting to capture maximum energy to overcome the problem of energy shortage in this country. TERI, MEDA, CSIR- the well-known science and technology organizations are taking initiatives to create consciousness about the importance of alternative energy. These science and technology organizations are also developing devices to tap these energy resources.
In alternative energy sources, solar energy is generated from the sun, wind energy from the wind, biogas is generated from the animal wastes, geo-thermal energy is generated from hot springs as well as hot dry rocks, tidal energy is generated from the tidal waves.
By the end of March 2006, over 1,83,000 MW of alternative source of energy potential had been created. In a tropical country like India, solar energy should receive particular attention. Solar energy can be used for lightning, irrigation, creating supply of drinking water, operating communication equipment; and providing education through radio and TV sets.
Wind power has been developed in India on a modest scale. In March 2006 power generation from the wind was mere 5,310.40 MW as against potential of 45,000 MW per annum.
On March 31, 2006 the potential of biogas was as much as 19,230 MW while the actual production was only 6,73.63 MW on March 31,2006.
In India power 70% of the power generation is done from coal based thermal power plants. Saving in energy consumption will lead to saving on that front. Another area where major energy savings can be affected is the transmission and distribution losses. India’s transmission and distribution losses are close to 50% . Tackling this problem can help in overcoming electricity shortage which is around 12% .
“As the global economy continues to grow, global energy need as well as emission will increase by 60% between 2004 and 2030 as per World Energy Outlook 2004 published by the International Energy Agency. Various studies suggest that India’s energy growth will be over 5% per annum which is higher than the global average.”
Transport System in India:
In modern world, transport along with energy is the basic infrastructural requirement for industrialization and, accordingly, the developing countries have accorded it an important place in their programmes of economic development. With the Indian economy expected to grow at around 8% per annum, the transport sector is expected to grow at 10.0% per annum. The income elasticity of demand for transport currently is 1.25.
Railways:
The development and expansion of railways has revolutionalised the transport system the world over. In India, the railways provide the principal mode of transportation for freight and passengers. The railways are the most convenient mode of transport for long distances and are most suitable for carrying heavy and bulky goods like iron ore, iron and steel, heavy machinery, minerals, etc. Railways carry raw materials from the mines and the quarries and other interior areas of the country to the industrial centres. They link up the various regions of the economy and increase the occupational mobility of people. In short, they play a crucial role in economic development.
The Indian railway system is presently the largest in Asia and second largest in the world. The total route length of railways at end 2006 was 63,465 km of which 17,744 km route was electrified. During 2006-07 it carried 6,219 million passengers and 727.75 million tones of revenue earning freight traffic. The railways operate services on three gauges- the broad gauge (1.676 metres), the metre gauge(1.00 metre), and narrow gauge(0.762 metre and 0.610 metre). The broad gauge network is the largest operating system(47,749 km) in the country and accounts for the bulk of traffic, both freight and passenger.
Railways and the Plans:
At the time of Independence the railways were under severe strain and therefore the First Plan was devoted mainly to the rehabilitation and modernization of rolling stock and of fixed assets. On account of the heavy replacement demands, the need for expansion could not be fully met in the First Plan. The Second Plan also had to make a substantial provision for rehabilitation of aged assets. The emphasis in this plan, however, shifted to the programmes required to augment line capacity on different sections of the railways and to the procurement of additional rolling stock to meet the growing demand for railway transport arising from the increased production in the agricultural and industrial sectors of the economy. The Third Plan envisaged a rapid expansion of railways due to their importance for industrial programmes (particularly, the carrying of heavy goods like coal, iron ore and other materials for the steel plants, etc.). It was also recognized that in view of the difficulties of coping with anticipated increase in traffic with stream traction in the regions where the coal-fields and the new steel plants are situated, electrification and dieselization had become an operational necessity. Provision was accordingly made for the electrification of a number of sections on the Eastern, South-Eastern, Central and Southern Railways.
The basic objective of the Fourth Plan for the railway was to provide in full for the increase in traffic expected to modernize the railway equipment and practices with the limits of the funds available, to convert 1,676 km. of metre gauge to broad gauge in areas of rapid economic development and high traffic potential.
Problems and Issues in Railway Development:
Technology up gradation:
The existing technology of both electric and diesel locomotives is almost three
decades old. There is a need for introduction of higher horse-power electric and diesel
locomotives, which are also more fuel-efficient.
Expansion of Network:
The railway services are entirely inadequate vis-à-vis the requirements of the
Economy. A large number of the areas are yet to be covered by railways. In its Report
submitted in December 1988, the Committee for Expansion of Railway Network
(CERN) recommended further development of the railway network in a selective
manner, through a combination of new lines(2,902 km) and gauge conversion (2,306
km) aimed solely at capacity generation.
Diagram:- Indian Railway Network
Financial Arrangements:
The conventional methods of increasing the net revenue, like upward revision of
tariffs, expenditure control, etc. are inadequate for generating the levels of investment
required. Therefore, it is necessary to devise some unorthodox methods for improving
the internal resource generation and for raising external resources.
Tariff Policy:
Because of social responsibilities, railways are forced to operate a number of
unremunerative lines and suffer heavy losses on suburban and other traffic. Often
essential consumer goods like food grains, fruits and vegetables etc, and essential raw
materials and intermediate goods for the industry like coal, iron ore etc. have to be
carried at a loss. Because of this ‘tariff restraint’ exercised by the railways, they
incur substantial losses on passenger and other coaching services and on low-rated
commodities. Since these losses are incurred by the railways to meet the social
obligations of the government, the latter should provide subsidies to meet them.
Passenger services and freight movements:
The available capacity on the railways is shared between its two streams of traffic-
passengers and goods. Hitherto, because of capacity constraint and in the larger
interest of the economy, preference has been given to freight traffic to avoid
bottlenecks in the development process. As a result, the expansion of passenger trains
has been much less than the growth of freight traffic. This has resulted in
overcrowding and poor passenger services.
Road Transport:
Roads are generally classified into the following categories-
National highways- These roads are the primary roads of the country and connect large cities and big industrial centre’s. Their development and maintenance is the responsibility of the central government. Initially our road system developed around four main national highways connecting Khyber with Kolkata through Delhi, Kolkata with Chennai, Chennai with Mumbai, and Mumbai with Delhi.
State highways- These roads link all the important centre’s of the industry, trade and commerce of the State and National highways.
District roads- These roads connect different parts of the district, important industrial centre’s and market centre’s and usually lead to local railway station
Rural roads- These are roads found in villages and are of two types viz., kutcha (non-metalled) & pucca (metalled)
Diagram:- Road Network in India
Importance of road transport in India:
As compared to railways, road transport has following advantages:
1. A large no. of places like far fetched villages, interior countryside & hilly areas are not connected by railways. Therefore, the only means of transport in these areas is road transport.
2. Road transport is complementary to railways. It provides feeder services as goods arriving at railway stations are dispatched to their destinations through trucks or other means of road transport.
3. It is a better means of transport as compared to railways for carrying perishable & less bulky goods. E.g. vegetables & goods reach mandis the very next day when they are dispatched by trucks.
4. The chances of damage or loss are more in railways than as compared to roadways
5. Road transport does not require heavy capital expenditure unlike railways in which case huge has to be spent on laying tracks, manufacturing wagons & technical equipment etc.
6. From the point of view of the defence of the country, roads are very important. Since railway tracks cannot reach all nooks & corners of the country. It is roads that enable the defence forces to move to the inaccessible areas in the times of need.
Road development in India:
India has one of the largest road networks in the world, aggregating to about 3.34 million kms at present. However, this network is not adequate for speedy & efficient transportation. Half of this is made up of unsurfaced roads. National Highways which are arterial roads have currently a network of 66,590 km. Although they carry almost 40% of goods & passengers, the national highway network constitutes less than 2% of the total road network.
Three important initiatives in the road sector were begun in recent year: The National Highway Development project (NHDP), Pradhan Mantri Bharat Jodo Pariyojana (PMBJP) & pradhan Mantri Gram Sadak Yojana (PMGSY). MHDP deals with building high quality highways. PMGSY addresses rural roads.
NHDP is the largest highway project ever undertaken by the country & is implemented by the National Highway Authority of India (NHAI). It consists of the following components
NHDP phase I & II envisage 4/6 laning of about 14729 km. of National Highways at a total estimated cost of RS. 65000 crore. These two pages comprises of Golden Quadrilateral, North-South & East-West corridors, port connectivity & other projects. The Golden Quadrilateral connects the four major cities of Delhi, Chennai, Mumbai & Kolkata. The North-South & East-West corridors connect Srinagar in the north to Kanyakumari in the South, including the spur from Sale to Kochi and Silchar in the east to Porbander in the west.
2. Government has approved the up gradation of 12109 km under NHDP phrase III under an estimated cost of Rs. 80626 crore
3. Government on October %, 2006 has approved six laning of 6500 kms of national highway comprising 5700 km of GQ & balance 800 km of other sections under NHDP phase V at a cost of 41210 crore.
4. Government on Nov 2, 2006 has approved the construction of 1000 km of express highways with the full access control on new alignments at a cost of Rs 16680 crore under NHDP phase VI
According to the Economic survey of 2007-08, , the implementation of NHDP has been faced with a number of constraints that include delays in land acquisition & removal of structures, shifting of utilities & law & order problem in some states & poor performance of some contractors.
To encourage private partnership in the development of highways, the Department of Road Transport & Highways has laid down policy guidelines. It has been decided that all the sub projects in NHDP Phase III to Phase VII would be taken up on the basis of public private partnership on Build Operate & Transfer mode.
The Problem of Rail-Road Coordination
Rail & road transport are complementary to each other. Takrn together, they form the principal means of connecting all parts of the country with one another. Railways have lost ground to road transport as would be evidenced from the fact that the share of road transport in freight traffic as well as the passenger traffic has increased steadily.
Water Transport
Inland Water Transport
India has got about 14500km of navigable water ways. Inland water transport includes natural modes like navigable rivers & backwaters & artificial modes such as canals. In recent times, the importance of this mode of transport has declined considerably with the expansion of road & rail transport. In addition, the diversion of river water for irrigation has also reduced the importance of inland water transport. The decline is also due to deforestation of hill ranges leading to the erosion, accumulation of silt in rivers & failure to modernize the fleet to suit local conditions. The transportation of goods in an organised form is confined to WB, Assam & Goa. Presently about 18 million tones of cargo is being moved annually by inland water transport, a fuel efficient & environmental friendly mode.
Diagram:- Inland Water Transport
Shipping:
Coastal Shipping:
India has long coastline of 7516 kms, a number of number of ports & a vast hinterland. Therefore coastal shipping holds a great promise more so because it is the most energy efficient & the cheapest mode of transport for the carriage of bulky goods like iron & steel, iron ore coal, timber etc., over long distances. The main factors affecting the growth of coastal shipping adversely have been the high transportation cost especially for movement other than those between a pair of water front locations, port delays, poor turnaround time of coastal ships on account of overages vessels, lack of mechanical handling etc. The coastal fleet is ageing fast; out of 457 vehicles, 52% of the tonnage is already overdue for replacement. Also, there is an imbalance in coastal traffic movement as traffic is not equally available in both directions. This makes it necessary for coastal ships to sail in ballast, at times, on return journey. Moreover slow handling of the cargo at port & undue port delays inflict heavy losses on shipping companies.
Overseas Shipping:
Because of the importance of the overseas shipping in international trade, considerable attention has been paid to increase the shipping tonnage in the planning period. As a result, the share of Indian shipping in transportation of the India's overseas trade has slowly & consistently increased in the planning period. Presently, almost 75% of the country's trade volume is moved by sea. The country has largest merchant & shipping fleet among developing countries and ranks 19th in the world. in shipping tonnage. As compared to 1.92 lakh Gt (Gross Tonnage), at the time o Independence, shipping tonnage increased to 9.07 million GT as on August 31, 2007. India's shipping tonnage might surpass 12 million GT By the end of the Eleventh Five Year Plan. Analysts assign this phenomenon to the buoyant freight market conditions. The shipping fleet strength as on December 31, 2005 was 237 vehicles.
Ports:
At present there are 12 major ports & 202 non-major ports along the India's coastline. Because of their importance for coastal & overseas shipping, special efforts have been made in plans for the development & modernization of existing ports & establishment of new ports.The National Labour Harbor Board was setup in 1950 to advise the central & state governments on the management & development of sports, particularly minor ports. In March 1976, the governments setup the Dredging corporation of India to undertake capital & maintenance dredging at the ports in an integrated manner. The Sixth plan made an allocation of Rs. 521 crore for the development of major ports. The emphasis of the plan was on modernization of existing port facilities & providing additional capacities to meet the expanding needs of the country.
Major ports are the direct responsibility of the central government while the non-major ports are managed & administered by the respective state governments.
Despite having adequate capacity & modern handling facilities the average turnaround time at the Indian ports is 3.6 days while it is only 10 hours at Hong Kong. This undermines the competitiveness of the Indian Ports. Moreover, as noted by the Economic Survey 2007-08, since ports are not adequately linked to the hinterland, the evacuation of the cargo is slow leading to congestion. To tackle this problem, all port trusts have setup groups with representatives from NHAI, the railways & state governments to prepare comprehensive plans aimed at improving road-rail connectivity of ports.
Diagram :- Ports of India
Air Transport:
Air transport is the most modern, quickest 7 latest addition to the modes of transport. Because of the speed with which the aero planes can fly, travel by air is becoming increasingly popular. As far as the world trade is concerned, it is still dominated by sea transport because air transport is very expensive & is also unsuitable for carrying heavy, bulky goods. However the transportation of the high value light goods & perishable goods is increasingly being done by air transport. The Air corporation Act was passed in 1953. According to the Act, two state corporations namely the Air India International & Indian Airlines were established. was intended to operate long distance international system while the Indian Airlines corporation was to operate the internal scheduled services & air services to the neighboring countries.
It was in January 1881 that the third airline was set up to connect inaccessible areas of the country which are not covered by Indian Airlines & those areas of the country which are the important centres of trade, commerce & are important from the point of view of tourism. In October 1997, the government setup Pawan Hans Ltd. to provide air transport based helicopter services to meet the requirement of petroleum sector to operate services in inaccessible areas & in hilly terrains, to operate tourist charters & to provide intra-city transport services. The civil aviation sector has recently been opened up to private sector & private airlines has captured substantial share of traffic on truck routes. The government has ended the monopoly of the Indian Airlines & Air India on scheduled operation by repealing the Air Corporation Act, 1953. There are at present 14 scheduled airlines operating on the domestic network. Apart from this, at present, 65 companies are holding non-scheduled operators permit. The civil aviation sector has witnessed dramatic expansion during the tenth plan period.. The number of domestic & international passengers has almost doubled between 2004 & 2007. Cargo traffic has increased by more than 45% between 2003-04 & 2006 & 2007. The international airports are being modernized through private sector participation. Construction work at greenfield airports of international standards has commenced at Hyderabad& banglore. These airports are likely to be operational in the middle of 2008. The Chennai & Kolkata airports are also proposed to be substantially upgraded by Airports Authority of India.
Communications:
Communications means imparting information. The difference between transport & communication is that while the former implies the conveyance, the later implies conveyance of information. The conveyance of information is very necessary for the development of industries, commerce & trade. There is a close interlink between communications & transport since all tangible communications have to be sent by transport. Improvemnts in communications halps to speed up communications. The most important means of communications is postal services, telephone services, teleprinters, radio, television, etc.
Postal Services:
The modern postal services dates back to 1837 when postal services were thrown open to public. However, it was with the attainment of Independence, that the postal services came to be recognized as the essential infrastructure. Due to the expansion of the postal network in successive Five year pans, the number of post offices increased from only22116 at the time of independence to over 1.55 lakh on March 31, 2007. Now on an avg, post office serves 6600 people & covers an area of 21.13 sq. kms. The Indian postal services are the largest in the world. India has been a member of Universal Postal Union (UPU) since 1876 and Asian Pacific Postal Union (APPU) since 1964.India exchanges mail with more than 217 countries by air and surface.
Telecommunications:
With more than 272 million connections in December 2007, the Indian telecommunications network is the third largest in the world & second largest among the emerging economies of Asia. India continues to lag behind countries like Brazil & China where the tele density is more than 40. In the field of telecommunications, tremendous progress has been made by the use of satellite communications & Submarine links. The voice & non-voice telecom services which include data transmission, fascimile, mobile radio, radio paging & leased line services cater to the variety of the needs of both residential & business customers. ISDN services is also available in many cities.
The regulatory authority in the telecom sector known as Teleco Regulatory Authority of India was setup on February 20, 1997. It has been setup with a view to discharge regulatory functions thereby providing a level playing field in the telecom sector.In 1999, the government announced a New Telecom policy (NTP,1999). In terms of this policy, the government has opened the National Long Distance Service to the private operators without any restrictions on the no. of operators from August 13, 2000. With a view to supplementing the efforts of public sector service providers, i.e. BSNL & MTNL, & to ensure a better competition in providing the basic telephone services, companies registered in India are being licensed to plan, install, operate & maintain basic services.
The liberalization efforts of the government are evident in the growing share of private sector, in total telephone connections which have increased from 39.2% in 2004 to 72% in December 2007. The growth of wireless services in particular has been phenomenal with the number of wireless subscribers increasing at a compound annual growth rate of 87.7% p.a. Today, the wireless subscribers are not only more than the fixed subscribers in the country, but are also increasing at a much faster pace. It's share has increased from 24% in March 2003 to 86% in December 2007. Improved affordability of the wireless phone has made the universal access objective more feasible.
Development of infrastructure is a sine qua non of economic development. For instance, development of agriculture depends, to a considerable extent, on the adequate expansion & development of irrigation facilities. Industrial progress depends on the development of power & electricity generation, transport & communication. Obviously if proper attention is not paid to the development of infrastructure, it is likely to act as a severe constraint on the economic development process in the country.
In this report we propose to cover the following constituents of Infrastructure and their related problem and issues:
Sources of energy in India
Power and electricity
Coal
Oil and Gas
Atomic energy
Non-conventional sources of energy
The energy crises in India
The energy strategy
The transport system in India
The Railways
Road transport
Water transport
Air transport
Communications
Postal services
Telecommunications
Sources of energy in India
Energy plays a crucial role in the economic development. However, the consumption of energy is low in India. Its demand steadily increases with the growth of the economy. A number of researchers have observed a positive correlation between economic growth & demand for energy.
E.A.G. Robinson has noted that a 3% rise in industrial production in the world is accompanied by 2% increase in energy consumption.
In India, where about 35% of the population is either below the poverty line or very close to it, well over half of the population does not have the purchasing power to enter the market for commercial energy. This section of population residing mostly in rural areas survives on non-commercial sources of energy, such as firewood, dung cakes & agricultural wastes.
At present, about 23% of the energy consumed is obtained from non commercial traditional sources.
The pattern of commercial energy consumption is characterizes by a high degree of dependence on oil. The share of oil & gas measured in coal replacement terms is close to 45%.
Power or electricity
Electricity & power generation play a crucial role in economic development. As noted by the Draft Fifth Five Year Plan, “Electricity is the most versatile form of energy & provides an important infrastructure for economic development. It is vital input for industry & agriculture & is of particular importance to a developing rural sector which needs more power for its agricultural operations, for its small scale & agro industries. All sectors of the economy need electricity for their common needs of water supply, transport, communication & domestic lighting.
There is hardly any community or sector which is not affected by a power shortage today. “The future development of the country, therefore, will depend upon the growth of power generation capacity.”
Expansion of generation capacity
Total installed generating capacity in the country rose from only 2300 MW in 1950 to as high as 143800 MW as at the end of March 2006. Electricity generated rose from 55.8 billion KWH in 1970-71 to as high as 394.5 billion KWH in 1996-97 & further to 663.0 billion KWH in 2006-07. During the period from 1990-91 to 2005-06, generating capacity grew at the rate of 4.7% per annum . There was a corresponding expansion of the transmission & distribution networks also. In order to facilitate grid operation & transfer of power from surplus to deficit areas, construction of inter-State & inter-regional lines was undertaken.
The Ninth Plan had contemplated as addition of 40245 MW in the installed generating capacity. However, the actual achievement was only 19015 MW. The total capacity addition in the Tenth Plan was targeted at 41110 MW. However, the achievement was only 21080 MW.
Most of the States now find that raising of resources required for highly capital intensive projects is beyond their capacity. To meet the projected power demand by 2012, an additional capacity of 78577 MW is enviaged in the Eleventh Plan-16553 MW in hydro, 58644 MW in thermal & 3380MW in nuclear projected.
A critical evaluation
The data given above show that while there has been a marked expansion in power generation capacity; there have been substantial gaps between targets & achievements.
There has been an inordinate delay in installing & commissioning of projects; poor project management; late delivery of structural steel, cement & power equipment; labour disputes; funding constraints & technological changes as reflected in the progression of unit sizes of thermal plants.
The plant load factor which indicates the capacity of utilization of Thermal power plants and is thus important indicator of their efficiency has remained 50% for number of years of planning. There are wide Interstate variations.
SEBs face a number of other problems like poor financial and commercial performance which has crippled their capacity to finance future programmes; inability to pay their full dues to the Central Power Utilities which has adversely affected the latter’s future investment plans; heavy T&D (Theft and Distribution) loses including energy sold at low voltage, sparsely distributed loads over large rural areas, inadequate investments in the distribution system, improper billing & theft.
Revenues from selling electricity in most States fall short of buying or producing it. Many States government are providing electricity at very low rates to the agricultural sector (some States are even proving it free) with the result that the burden of subsidy is very high. In fact, gross subsidy involved on account of sale of electricity to agriculture rose from Rs. 5938 crore in 1991-92 to as high as Rs. 26606 crore in 2006-07.
The commercial losses of SEBs have risen considerably over the years. From a level of Rs. 4117 crore in 1991-92, the commercial losses of SEBs rose to the staggering level of Rs. 21110 crore in 2005-06 & are expected to rise further to Rs. 26150 crore in 2006-07. The rate of return of SEBs in 2006-07 was negative at -27.4%.
Sources of power
There are five major sources of power viz. water, coal, oil, gas & radio active elements like uranium, thorium & plutonium. Electricity generated from water is known as hydro-electricity. Coal, oil and gas are sources of thermal power. Atomic energy is generated from uranium, thorium & plutonium.
Hydro-electricity
In 2006-07 hydel power accounted for 17.1% of the total electricity generated in India by the public utilities. The share of hydel generation in the total energy generated in the country was 43.8% in 1980-81. Since then it has steadily declined & was 11.9% in 2004-05. Its share rose to 17.1% in 2006-07.
According to recent estimate India’s hydel power potential is around 600 Bkwh (Billion Kilowatt hour) at 60 percent load factor
The hydel power resources are unevenly distributed in India. Punjab, Himachal Pradesh, Jammu & Kashmir, Kerala, Karnataka & States of the North-East have substantial hydel power potential. Bihar, Rajasthan, Madhya Pradesh & West Bengal have very little hydel power potential. Andhra Pradesh, Uttar Pradesh, Assam, Maharashtra & Tamil Nadu may not have large hydel power potential but if the available hydel power resources of those States are fully harnessed, they can meet a substantial portion of their demand for electricity.
Thermal power
The development of thermal power plants which use coal, oil or natural gas to generate electricity is common where these fuels are available. In the industrialized countries of the West, thermal power accounts for more than 60% of the total power generated. The fuels used to generate thermal power are exhaustible. In the case of thermal plants the initial cost is generally low but their maintenance cost & power generation costs are heavy.
In India Thermal power has been developed on an extensive scale. In 2006-07, share of thermal plants in gross power generated by the public utilities was 79.6%. The main source of thermal power is coal which is the most polluting fuel having disruptive effect on environment. India accounts for 5.7% of the proved resources of coal in the world. These coal reserves are non-renewable & are exhaustible.
Coal
Coal has been considered as the major source of energy in India. It now accounts for 67% of the country’s commercial energy requirement. At present, it is the principal source of electricity in India, accounting for about 78% of its output. Coal mines were nationalized in the early 1970s. This radical move paved the way for the introduction of newer technologies, standardization of equipment & creation of infrastructural facilities.
At present the most important coal fields are Raniganj in West Bengal & Jharia & East Bokaro in Bihar. Other States in which relatively smaller coal deposits exist are Orissa, Madhya Pradesh, Maharashtra, Andhra Pradesh & Assam
Oil & Gas
At present about 44.9% of the demand for commercial energy is met from this source. Some increase in consumption of petroleum was inevitable with the industrialization & development of transport system & had to be met partly by raising the domestic output & partly by the import of crude oil.
The government felt the need for oil exploration on an extensive scale to establish adequate indigenous resources. The Oil & Natural Gas Corporation Ltd. (ONGC) & the Oil India Limited (OIL) were established in 1955 & 1959 respectively to undertake this task. Total removable crude oil resources were estimated in 2006-07 at 756 million tonnes. At current rates of production, existing oil reserves will last about 25-26 years.
Presently the petroleum industry in India meets only less than 30% of the demand, it has made considerable headway since independence. Starting from a modest production level of around 0.25 million tonnes in 1950-51, the production of crude oil rose to 34.0 million tonnes in 2006-07.
Share of domestic production declined to 56% in 1990-91 & further to 23.2%in 2006-07 & thus the pressure of the imports of crude oil on balance of payments increased.
The gap between the demand for oil & its domestic production widened & as a result the import dependence of oil went up to 77% in 2006-07 as against about 51% in 1996-97. This extent of reliance on imports of oil & petroleum products makes India vulnerable to changes in international oil prices.
The other segment of the oil industry, that is refining, has also been developed considerably during the past five & a half decades. The total refining capacity at the beginning of the First Plan was only 0.25 million tonnes per annum.
The effective refining capacity at the end of 1980-81 was 31.8 million tonns in terms of crude throughput. It rose to 69.1 million tonns in March 1999 & further to 136.0 million tonns in 2006-07.
The production of gas was 7.23 billion cubic metres in 1984-85. It rose to 31.75 billion cubic meters in 2006-07. Increasing the production of natural gas, there has to be stress on substitution of natural gas for oil products. In fertilizer production, natural gas can replace naphtha or furnace oil. The advantages of a gas based power stations are it is much less capital intensive, it can be erected in a much shorter period & it is environmentally friendly.
Atomic energy
India is now one of the few countries which have made considerable progress in the field of atomic energy.
India’s thorium deposits have been estimated at 363000 tonnes which are the largest in the world. Monazite is the source of thorium. It is found in Kerala, Karnataka & Bihar. Self-reliance continues to be the thrust area in nuclear power development. The Civilian Nuclear Deal will give a new Flip to this sector.
Non-conventional energy sources
The government has accorded a high priority to promotion & utilization of renewable resources of energy to supplement conventional sources energy. These new non-conventional sources of energy among which biogas, solar energy & wind power are important. India has taken lead in this regard by setting up a Commission for Additional Sources of Energy on March 12, 1981 & Department of Non-conventional Energy Sources on September 6, 1982. While the Commission formulates the policies & programmes, the latter is responsible for their implementation. By the end of March 2006 significant progress has been made in this country towards harnessing our renewable energy sources. Over 183000 MW of non-conventional energy source potential has been created.
Solar energy
In a tropical country like India, solar energy is important renewable source of energy. A major problem in harnessing solar energy is that it is not available in a concentrated form. It is highly variable. Solar energy can be effectively utilized for such low heat applications in which large variations in energy output are not critical. Solar energy for high heat applications at a steady rate can be produced only at a high cost.
In future it is expected that solar energy can be utilized for community lighting, minor irrigation, pumping of drinking water, educational radio & TV sets & communication equipment. Under the Ninth Five Year Plan there was emphasis on expanded use of low grade solar thermal devices, such as domestic/ industrial solar water heaters, solar cookers, solar driers, solar timber kilns & solar desalination. Solar Thermal Energy Programme and Solar Photovoltaic Programme launch by Government of India
Wind power
With an easy accessibility of electricity, the importance of wind power declined. Wind power production was taken up as a thrust area during the Ninth Five Year Plan. A target of at least 2000 MW was envisaged by utilizing indigenous machines. As on 31 March, 2006, wind power generation was as much as 531040 MW as against the potential of 45000 MW.
Biogas
The technology for conversion of animal waste into biogas is well developed & more than 38 lakh biogas plants are already in operation. The pioneering work in this field was done by the Khadi & Village Industries Commission. Presently some other agencies are attempting to raise the efficiency of gas generation & bring down the capital cost of the biogas units. Deen Bandhu & other small size two cubic metre plants are quite popular. Janata biogas plants do not require steel for construction. They are built of bricks at a relatively low cost. Lack of proper maintenance & servicing facilities for such plants in rural areas continues to be major problem.
On March 31, 2006 estimated potential of biogas power was 19500 MW while the actual achievement was only 673.63 MW on March 31, 2005. The biogas programme reduces the pressure on fire wood. It also improves the environmental health in the rural areas & yields valuable organic manure. For popularizing the biogas plants in rural areas the government has given subsidy as well. National Biogas Programme and Biomass Gassifier Programme
Energy crisis
About 35 years ago a major energy crisis developed in India. Since then the government in this country has undertaken certain measures to tackle it, yet the problem remains & calls for serious attention. The energy crisis began with the hike of the oil prices in 1973. In this year, the OPEC (Organization of Petroleum Exporting Countries) had raised oil prices by more than four times. Unfortunately since Independence the country’s dependence on oil as a source of energy had greatly increased. This has put tremendous burden on the economy. The rising oil imports bill over the years further enhanced the trade deficit.
Oil prices & the inflationary pressure
Mineral oil is presently the major source of energy far transport, industry & agriculture. It is also used as household fuel. Therefore, the policy of the OPEC to continuously raise the prices of petroleum products pushed the economies of oil importing countries into the dark era of cost-push inflation.
Growing oil imports bill
Beginning from 1973-74 over a period of three decades India’s oil imports bill recorded a substantial increase. In 1973-74 India had imported oil & other petroleum products amounting to Rs. 1100 crore. Since then oil bill has swollen rapidly. It rose to Rs. 5622 crore in 1982-83, to Rs. 10816 crore in 1990-91 & to a record level of Rs. 258572 crore in 2006-07. Prior to the hike in the oil prices, oil imports were not a major burden as they were merely 12-13% of India’s exports. They rose to 44% of the country’s exports in 1973-74 & to 76% of the exports in 1980-81. During the past few years though the situation has not improved in absolute terms, the percentage of the oil imports bill to country’s exports has been somewhat lower. It stood at 33.2% in 1990-91 & 45.2% in 2006-07.
Demand-supply imbalance in all commercial fuels
The elasticity of consumption of commercial energy with reference to GDP is presently around 0.87. It will definitely rise with the acceleration of growth process in future. This evidently suggests that in coming years the demand for energy will continue to grow & the country will have to step up the supply of commercial fuels adequately to avert further deepening of the energy crisis.
The energy strategy
Until oil prices were raised by the OPEC, no one in the government had the realization that the policy of a high degree of oil dependence was a downright wrong policy. In a country where proven reserves of oil are limited, this policy could have disastrous effects on growth on growth efforts. The increases in oil prices, however, compelled the decision makers to do some rethinking & as a consequence, a new energy strategy has been evolved. The Planning Commission admitted the dangers of the policy of oil dependence in the Sixth Five Year Plan in these terms: “Apart from the heavy strain this will cast on the country’s balance of payments, even the physical availability of oil in the international markets will pose a problem in the recent years to come. This means that if India’s plans of economic growth are not to be hampered by inadequacies of energy supply, reduced dependence on imported oil has to be key element in our development strategy”.
Energy Resources & their exploitation
According to Economic Survey, 2007-08, “the main reasons for the slow development include difficult & inaccessible potential sites, difficulties in land acquisition, rehabilitation, environmental & forest-related issues, inter-State issue, geological surprises & long gestation period. Uranium & thorium are the two minerals used for generating nuclear energy. Assured uranium reserves in India are estimated to be about 34300 tonns of which a little less than half are economically exploitable. Thorium deposits are placed at about 363000 tonnes.
From the inventory of commercial energy resources it appears as if the country has large resources. But when we compare India’s per capita reserves with those of other countries, we observe how unsatisfactory our position is. While India has reserves of 71 tonns of coal per person, the USA has 13747 tonns, former USSR 23112 tonnes and China 1,060 tonnes. Our per capita oil reserves are also small. We have a mere 0.81 tonnes per capita of oil reserves as against 16.32 tonnes in the USA and 2.86 tonnes in China.
Over the past several years, shortage of energy has been a major constraint on industrial development. Further, the sky rocketing prices of oil have swollen the import bill creating a difficult balance of payments position. Keeping these developments in view, a faster exploitation of domestic energy resources is required in the years ahead. It is now generally recognized that coal being the only fossil fuel in which this country is relatively well endowed, it is to be treated as the main source of commercial energy. The problems standing in the way of sustained increase in its production, though formidable, should be overcome. The exploratory effort to discover new resources will have to be intensified if the road transport system is not to be allowed to collapse under the pressure of soaring oil prices. Hydro-power is to be developed with a sense of urgency. It is the only important source of renewable energy. The task is difficult indeed, as a substantial proportion of the potential exists in the sub-Himalayan regions of northern and north-eastern India which are not easily accessible. At present the contribution of nuclear power to the total energy generation is just a little more than 2 per cent. In the coming years, this source will have to be exploited with greater vigour. The urgency for nuclear power development is now felt particularly in view of the concentration of coal reserves in a few States.
Energy Strategy for the future:
Several expert bodies in the past, such as Energy Survey of India Committee (1965), the Fuel Policy Committee (1974), the Working Group on Energy Policy (1979), and the Advisory Board on Energy (1983-88) have stressed the need for long-term energy planning. However, the earlier Five Year Plans showed “more of the short term and medium term concerns than the long-term policy imperatives in energy planning. Besides this, the emphasis of the earlier Plans has all along been on supply problems of the sector rather than on economy in the end use of energy through conservation.” The approach of the Eighth Plan was different. It gave importance to long-term integrated planning with emphasis on both efficient strategy of long run energy supply and energy and use. The Planning Commission spelt out three aspects of this strategy. First, it should ensure gradual shift from non-renewable energy resources to renewable ones. Second, there has to be increasing emphasis on demand management and conservation of energy and efficient utilization of energy resources. Third, a high priority has to be accorded to meeting the basic energy needs of the rural and the urban poor in the immediate future.
The Ninth Plan divided the energy strategy for the future into short-term strategy, medium-term strategy and long-term strategy.
The Ninth Plan document mentions the following measures to meet energy challenges in the long-term:
Demand management through greater conservation of energy, optimum fuel mix, and structural changes in the economy.
Shifting to less-energy-intensive modes of transport.
Moving away from depletable to inexhaustible energy resources.
Greater emphasis on exploration of hydroelectric power, particularly for meeting peak-demand.
Grater attention to research, development, transfer and use of energy-efficient technologies and practices in the supply as well as end-use sectors.
Strategies for Achieving Energy Security:
Increasing exploration efforts through the New Exploration Licensing Policy
(NELP)
Exploring in new areas, especially in deep water and difficult frontier areas, and also exploring in the deeper layers of the producing fields.
Developing faster the newly discovered fields and stepping up the use of new technologies for seismic surveys, work over, stimulation operations, drilling of wells etc. in producing areas.
Improving the recovery factor from existing major fields by implementing Enhanced Oil Recovery (EOR), Improved Oil Recovery (IOR) schemes.
Acquiring acreages abroad.
Tapping alternative sources of energy such as Coal Bed Methane (CBM), Underground Coal Gasification (UCG) and gas hydrates.
Substituting fossil fuels in part by blending with hydrogen and bio-fuels like ethanol and bio-diesel.
Important Schemes launch by Government
Accelerated Power Development and Reform Programme (APDRP)
Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
National Biogas Programme
Integrated Rural Energy Programme (IREP)
Remote Village Electrification Programme (RVEP)
Village Energy Security Programme (VESP)
Solar Thermal Energy Programme
Solar Photovoltaic Programme
Biomass Gassifier Programme
The Alternative Way to Resolve Energy Crises:
Due to heavy consumption and utilization of conventional energy sources, the world is now reaching their exhaustion position. As such it has to cap alternative energy sources to fulfill the growing energy needs. The traditional sources of energy are pollutant and have led to global warming which has started threatening the very existence of environment conditions to human being.
Hence, alternative energy sources have became relevant in modern economies. Alternative sources of energy are the natural resources. They rarely exhaust completely. They are available everywhere and are renewable and cause less or no pollution. Thus alternative sources of energy are most viable sources of clean, unlimited energy which reduce chemical as well as thermal pollution.
India is gifted with abundant supply of natural resources like bright sunshine, long days, wind and water. Thus, countrywide efforts are being made to tap the alternative energy sources to the maximum possible extent. At the national level solar energy parks, windmills, tidal energy parks etc. have been planned and are being built at various locations. Both public and private sectors are attempting to capture maximum energy to overcome the problem of energy shortage in this country. TERI, MEDA, CSIR- the well-known science and technology organizations are taking initiatives to create consciousness about the importance of alternative energy. These science and technology organizations are also developing devices to tap these energy resources.
In alternative energy sources, solar energy is generated from the sun, wind energy from the wind, biogas is generated from the animal wastes, geo-thermal energy is generated from hot springs as well as hot dry rocks, tidal energy is generated from the tidal waves.
By the end of March 2006, over 1,83,000 MW of alternative source of energy potential had been created. In a tropical country like India, solar energy should receive particular attention. Solar energy can be used for lightning, irrigation, creating supply of drinking water, operating communication equipment; and providing education through radio and TV sets.
Wind power has been developed in India on a modest scale. In March 2006 power generation from the wind was mere 5,310.40 MW as against potential of 45,000 MW per annum.
On March 31, 2006 the potential of biogas was as much as 19,230 MW while the actual production was only 6,73.63 MW on March 31,2006.
In India power 70% of the power generation is done from coal based thermal power plants. Saving in energy consumption will lead to saving on that front. Another area where major energy savings can be affected is the transmission and distribution losses. India’s transmission and distribution losses are close to 50% . Tackling this problem can help in overcoming electricity shortage which is around 12% .
“As the global economy continues to grow, global energy need as well as emission will increase by 60% between 2004 and 2030 as per World Energy Outlook 2004 published by the International Energy Agency. Various studies suggest that India’s energy growth will be over 5% per annum which is higher than the global average.”
Transport System in India:
In modern world, transport along with energy is the basic infrastructural requirement for industrialization and, accordingly, the developing countries have accorded it an important place in their programmes of economic development. With the Indian economy expected to grow at around 8% per annum, the transport sector is expected to grow at 10.0% per annum. The income elasticity of demand for transport currently is 1.25.
Railways:
The development and expansion of railways has revolutionalised the transport system the world over. In India, the railways provide the principal mode of transportation for freight and passengers. The railways are the most convenient mode of transport for long distances and are most suitable for carrying heavy and bulky goods like iron ore, iron and steel, heavy machinery, minerals, etc. Railways carry raw materials from the mines and the quarries and other interior areas of the country to the industrial centres. They link up the various regions of the economy and increase the occupational mobility of people. In short, they play a crucial role in economic development.
The Indian railway system is presently the largest in Asia and second largest in the world. The total route length of railways at end 2006 was 63,465 km of which 17,744 km route was electrified. During 2006-07 it carried 6,219 million passengers and 727.75 million tones of revenue earning freight traffic. The railways operate services on three gauges- the broad gauge (1.676 metres), the metre gauge(1.00 metre), and narrow gauge(0.762 metre and 0.610 metre). The broad gauge network is the largest operating system(47,749 km) in the country and accounts for the bulk of traffic, both freight and passenger.
Railways and the Plans:
At the time of Independence the railways were under severe strain and therefore the First Plan was devoted mainly to the rehabilitation and modernization of rolling stock and of fixed assets. On account of the heavy replacement demands, the need for expansion could not be fully met in the First Plan. The Second Plan also had to make a substantial provision for rehabilitation of aged assets. The emphasis in this plan, however, shifted to the programmes required to augment line capacity on different sections of the railways and to the procurement of additional rolling stock to meet the growing demand for railway transport arising from the increased production in the agricultural and industrial sectors of the economy. The Third Plan envisaged a rapid expansion of railways due to their importance for industrial programmes (particularly, the carrying of heavy goods like coal, iron ore and other materials for the steel plants, etc.). It was also recognized that in view of the difficulties of coping with anticipated increase in traffic with stream traction in the regions where the coal-fields and the new steel plants are situated, electrification and dieselization had become an operational necessity. Provision was accordingly made for the electrification of a number of sections on the Eastern, South-Eastern, Central and Southern Railways.
The basic objective of the Fourth Plan for the railway was to provide in full for the increase in traffic expected to modernize the railway equipment and practices with the limits of the funds available, to convert 1,676 km. of metre gauge to broad gauge in areas of rapid economic development and high traffic potential.
Problems and Issues in Railway Development:
Technology up gradation:
The existing technology of both electric and diesel locomotives is almost three
decades old. There is a need for introduction of higher horse-power electric and diesel
locomotives, which are also more fuel-efficient.
Expansion of Network:
The railway services are entirely inadequate vis-à-vis the requirements of the
Economy. A large number of the areas are yet to be covered by railways. In its Report
submitted in December 1988, the Committee for Expansion of Railway Network
(CERN) recommended further development of the railway network in a selective
manner, through a combination of new lines(2,902 km) and gauge conversion (2,306
km) aimed solely at capacity generation.
Diagram:- Indian Railway Network
Financial Arrangements:
The conventional methods of increasing the net revenue, like upward revision of
tariffs, expenditure control, etc. are inadequate for generating the levels of investment
required. Therefore, it is necessary to devise some unorthodox methods for improving
the internal resource generation and for raising external resources.
Tariff Policy:
Because of social responsibilities, railways are forced to operate a number of
unremunerative lines and suffer heavy losses on suburban and other traffic. Often
essential consumer goods like food grains, fruits and vegetables etc, and essential raw
materials and intermediate goods for the industry like coal, iron ore etc. have to be
carried at a loss. Because of this ‘tariff restraint’ exercised by the railways, they
incur substantial losses on passenger and other coaching services and on low-rated
commodities. Since these losses are incurred by the railways to meet the social
obligations of the government, the latter should provide subsidies to meet them.
Passenger services and freight movements:
The available capacity on the railways is shared between its two streams of traffic-
passengers and goods. Hitherto, because of capacity constraint and in the larger
interest of the economy, preference has been given to freight traffic to avoid
bottlenecks in the development process. As a result, the expansion of passenger trains
has been much less than the growth of freight traffic. This has resulted in
overcrowding and poor passenger services.
Road Transport:
Roads are generally classified into the following categories-
National highways- These roads are the primary roads of the country and connect large cities and big industrial centre’s. Their development and maintenance is the responsibility of the central government. Initially our road system developed around four main national highways connecting Khyber with Kolkata through Delhi, Kolkata with Chennai, Chennai with Mumbai, and Mumbai with Delhi.
State highways- These roads link all the important centre’s of the industry, trade and commerce of the State and National highways.
District roads- These roads connect different parts of the district, important industrial centre’s and market centre’s and usually lead to local railway station
Rural roads- These are roads found in villages and are of two types viz., kutcha (non-metalled) & pucca (metalled)
Diagram:- Road Network in India
Importance of road transport in India:
As compared to railways, road transport has following advantages:
1. A large no. of places like far fetched villages, interior countryside & hilly areas are not connected by railways. Therefore, the only means of transport in these areas is road transport.
2. Road transport is complementary to railways. It provides feeder services as goods arriving at railway stations are dispatched to their destinations through trucks or other means of road transport.
3. It is a better means of transport as compared to railways for carrying perishable & less bulky goods. E.g. vegetables & goods reach mandis the very next day when they are dispatched by trucks.
4. The chances of damage or loss are more in railways than as compared to roadways
5. Road transport does not require heavy capital expenditure unlike railways in which case huge has to be spent on laying tracks, manufacturing wagons & technical equipment etc.
6. From the point of view of the defence of the country, roads are very important. Since railway tracks cannot reach all nooks & corners of the country. It is roads that enable the defence forces to move to the inaccessible areas in the times of need.
Road development in India:
India has one of the largest road networks in the world, aggregating to about 3.34 million kms at present. However, this network is not adequate for speedy & efficient transportation. Half of this is made up of unsurfaced roads. National Highways which are arterial roads have currently a network of 66,590 km. Although they carry almost 40% of goods & passengers, the national highway network constitutes less than 2% of the total road network.
Three important initiatives in the road sector were begun in recent year: The National Highway Development project (NHDP), Pradhan Mantri Bharat Jodo Pariyojana (PMBJP) & pradhan Mantri Gram Sadak Yojana (PMGSY). MHDP deals with building high quality highways. PMGSY addresses rural roads.
NHDP is the largest highway project ever undertaken by the country & is implemented by the National Highway Authority of India (NHAI). It consists of the following components
NHDP phase I & II envisage 4/6 laning of about 14729 km. of National Highways at a total estimated cost of RS. 65000 crore. These two pages comprises of Golden Quadrilateral, North-South & East-West corridors, port connectivity & other projects. The Golden Quadrilateral connects the four major cities of Delhi, Chennai, Mumbai & Kolkata. The North-South & East-West corridors connect Srinagar in the north to Kanyakumari in the South, including the spur from Sale to Kochi and Silchar in the east to Porbander in the west.
2. Government has approved the up gradation of 12109 km under NHDP phrase III under an estimated cost of Rs. 80626 crore
3. Government on October %, 2006 has approved six laning of 6500 kms of national highway comprising 5700 km of GQ & balance 800 km of other sections under NHDP phase V at a cost of 41210 crore.
4. Government on Nov 2, 2006 has approved the construction of 1000 km of express highways with the full access control on new alignments at a cost of Rs 16680 crore under NHDP phase VI
According to the Economic survey of 2007-08, , the implementation of NHDP has been faced with a number of constraints that include delays in land acquisition & removal of structures, shifting of utilities & law & order problem in some states & poor performance of some contractors.
To encourage private partnership in the development of highways, the Department of Road Transport & Highways has laid down policy guidelines. It has been decided that all the sub projects in NHDP Phase III to Phase VII would be taken up on the basis of public private partnership on Build Operate & Transfer mode.
The Problem of Rail-Road Coordination
Rail & road transport are complementary to each other. Takrn together, they form the principal means of connecting all parts of the country with one another. Railways have lost ground to road transport as would be evidenced from the fact that the share of road transport in freight traffic as well as the passenger traffic has increased steadily.
Water Transport
Inland Water Transport
India has got about 14500km of navigable water ways. Inland water transport includes natural modes like navigable rivers & backwaters & artificial modes such as canals. In recent times, the importance of this mode of transport has declined considerably with the expansion of road & rail transport. In addition, the diversion of river water for irrigation has also reduced the importance of inland water transport. The decline is also due to deforestation of hill ranges leading to the erosion, accumulation of silt in rivers & failure to modernize the fleet to suit local conditions. The transportation of goods in an organised form is confined to WB, Assam & Goa. Presently about 18 million tones of cargo is being moved annually by inland water transport, a fuel efficient & environmental friendly mode.
Diagram:- Inland Water Transport
Shipping:
Coastal Shipping:
India has long coastline of 7516 kms, a number of number of ports & a vast hinterland. Therefore coastal shipping holds a great promise more so because it is the most energy efficient & the cheapest mode of transport for the carriage of bulky goods like iron & steel, iron ore coal, timber etc., over long distances. The main factors affecting the growth of coastal shipping adversely have been the high transportation cost especially for movement other than those between a pair of water front locations, port delays, poor turnaround time of coastal ships on account of overages vessels, lack of mechanical handling etc. The coastal fleet is ageing fast; out of 457 vehicles, 52% of the tonnage is already overdue for replacement. Also, there is an imbalance in coastal traffic movement as traffic is not equally available in both directions. This makes it necessary for coastal ships to sail in ballast, at times, on return journey. Moreover slow handling of the cargo at port & undue port delays inflict heavy losses on shipping companies.
Overseas Shipping:
Because of the importance of the overseas shipping in international trade, considerable attention has been paid to increase the shipping tonnage in the planning period. As a result, the share of Indian shipping in transportation of the India's overseas trade has slowly & consistently increased in the planning period. Presently, almost 75% of the country's trade volume is moved by sea. The country has largest merchant & shipping fleet among developing countries and ranks 19th in the world. in shipping tonnage. As compared to 1.92 lakh Gt (Gross Tonnage), at the time o Independence, shipping tonnage increased to 9.07 million GT as on August 31, 2007. India's shipping tonnage might surpass 12 million GT By the end of the Eleventh Five Year Plan. Analysts assign this phenomenon to the buoyant freight market conditions. The shipping fleet strength as on December 31, 2005 was 237 vehicles.
Ports:
At present there are 12 major ports & 202 non-major ports along the India's coastline. Because of their importance for coastal & overseas shipping, special efforts have been made in plans for the development & modernization of existing ports & establishment of new ports.The National Labour Harbor Board was setup in 1950 to advise the central & state governments on the management & development of sports, particularly minor ports. In March 1976, the governments setup the Dredging corporation of India to undertake capital & maintenance dredging at the ports in an integrated manner. The Sixth plan made an allocation of Rs. 521 crore for the development of major ports. The emphasis of the plan was on modernization of existing port facilities & providing additional capacities to meet the expanding needs of the country.
Major ports are the direct responsibility of the central government while the non-major ports are managed & administered by the respective state governments.
Despite having adequate capacity & modern handling facilities the average turnaround time at the Indian ports is 3.6 days while it is only 10 hours at Hong Kong. This undermines the competitiveness of the Indian Ports. Moreover, as noted by the Economic Survey 2007-08, since ports are not adequately linked to the hinterland, the evacuation of the cargo is slow leading to congestion. To tackle this problem, all port trusts have setup groups with representatives from NHAI, the railways & state governments to prepare comprehensive plans aimed at improving road-rail connectivity of ports.
Diagram :- Ports of India
Air Transport:
Air transport is the most modern, quickest 7 latest addition to the modes of transport. Because of the speed with which the aero planes can fly, travel by air is becoming increasingly popular. As far as the world trade is concerned, it is still dominated by sea transport because air transport is very expensive & is also unsuitable for carrying heavy, bulky goods. However the transportation of the high value light goods & perishable goods is increasingly being done by air transport. The Air corporation Act was passed in 1953. According to the Act, two state corporations namely the Air India International & Indian Airlines were established. was intended to operate long distance international system while the Indian Airlines corporation was to operate the internal scheduled services & air services to the neighboring countries.
It was in January 1881 that the third airline was set up to connect inaccessible areas of the country which are not covered by Indian Airlines & those areas of the country which are the important centres of trade, commerce & are important from the point of view of tourism. In October 1997, the government setup Pawan Hans Ltd. to provide air transport based helicopter services to meet the requirement of petroleum sector to operate services in inaccessible areas & in hilly terrains, to operate tourist charters & to provide intra-city transport services. The civil aviation sector has recently been opened up to private sector & private airlines has captured substantial share of traffic on truck routes. The government has ended the monopoly of the Indian Airlines & Air India on scheduled operation by repealing the Air Corporation Act, 1953. There are at present 14 scheduled airlines operating on the domestic network. Apart from this, at present, 65 companies are holding non-scheduled operators permit. The civil aviation sector has witnessed dramatic expansion during the tenth plan period.. The number of domestic & international passengers has almost doubled between 2004 & 2007. Cargo traffic has increased by more than 45% between 2003-04 & 2006 & 2007. The international airports are being modernized through private sector participation. Construction work at greenfield airports of international standards has commenced at Hyderabad& banglore. These airports are likely to be operational in the middle of 2008. The Chennai & Kolkata airports are also proposed to be substantially upgraded by Airports Authority of India.
Communications:
Communications means imparting information. The difference between transport & communication is that while the former implies the conveyance, the later implies conveyance of information. The conveyance of information is very necessary for the development of industries, commerce & trade. There is a close interlink between communications & transport since all tangible communications have to be sent by transport. Improvemnts in communications halps to speed up communications. The most important means of communications is postal services, telephone services, teleprinters, radio, television, etc.
Postal Services:
The modern postal services dates back to 1837 when postal services were thrown open to public. However, it was with the attainment of Independence, that the postal services came to be recognized as the essential infrastructure. Due to the expansion of the postal network in successive Five year pans, the number of post offices increased from only22116 at the time of independence to over 1.55 lakh on March 31, 2007. Now on an avg, post office serves 6600 people & covers an area of 21.13 sq. kms. The Indian postal services are the largest in the world. India has been a member of Universal Postal Union (UPU) since 1876 and Asian Pacific Postal Union (APPU) since 1964.India exchanges mail with more than 217 countries by air and surface.
Telecommunications:
With more than 272 million connections in December 2007, the Indian telecommunications network is the third largest in the world & second largest among the emerging economies of Asia. India continues to lag behind countries like Brazil & China where the tele density is more than 40. In the field of telecommunications, tremendous progress has been made by the use of satellite communications & Submarine links. The voice & non-voice telecom services which include data transmission, fascimile, mobile radio, radio paging & leased line services cater to the variety of the needs of both residential & business customers. ISDN services is also available in many cities.
The regulatory authority in the telecom sector known as Teleco Regulatory Authority of India was setup on February 20, 1997. It has been setup with a view to discharge regulatory functions thereby providing a level playing field in the telecom sector.In 1999, the government announced a New Telecom policy (NTP,1999). In terms of this policy, the government has opened the National Long Distance Service to the private operators without any restrictions on the no. of operators from August 13, 2000. With a view to supplementing the efforts of public sector service providers, i.e. BSNL & MTNL, & to ensure a better competition in providing the basic telephone services, companies registered in India are being licensed to plan, install, operate & maintain basic services.
The liberalization efforts of the government are evident in the growing share of private sector, in total telephone connections which have increased from 39.2% in 2004 to 72% in December 2007. The growth of wireless services in particular has been phenomenal with the number of wireless subscribers increasing at a compound annual growth rate of 87.7% p.a. Today, the wireless subscribers are not only more than the fixed subscribers in the country, but are also increasing at a much faster pace. It's share has increased from 24% in March 2003 to 86% in December 2007. Improved affordability of the wireless phone has made the universal access objective more feasible.