Trump's ignorance can hasten reforms of India's coal & energy sectors

Energy sector reforms have become even more necessary to ensure energy security for New Delhi

It is facile to say that US President Donald Trump is misinformed about the Indian coal sector. He is usually, on so many issues. Yet his misinformed diatribe could help push the Indian government to bring in deeper and faster reforms in the energy sector and especially in coal. 

In fact India is already on the way and it has been acknowledged by the USA’s own Energy Information Administration. Its country profile for India notes“Along with its pledge for deeper economic reforms, the (NDA) ad-ministration is supporting several energy reforms such as reducing petro-leum product subsidies, reforming natural gas pricing policy, reducing elec-tricity transmission and distribution losses and theft, alleviating regulatory burdens, and providing fiscal incentives to attract energy supply invest-ment and to reduce infrastructure constraints”.

Through these reforms  “The (India) government seeks to balance the country's growing need for electricity with environmental concerns from the use of coal to produce electricity…(though) The country has the second-largest population in the world, at nearly 1.3 billion people in 2014, growing about 1.4 per cent each year since 2004…At the same time, India's per capita energy consumption is one-third of the global average”.

In other words India is not paying lip service to move to renewable energy. It is for instance, not “contingent on receiving billions and billions and bil-lions of dollars in foreign aid from developed countries” as Trump has said. Instead the successive Indian governments have suo moto, begun to channelise the rising energy demand from fossil fuels based on their own understanding of the risks involved in securing energy security.The new challenge held out by the US government has made this quest, suddenly, very critical.

It is important to make this distinction, since the US President has posted an ingenious argument. “India will be allowed to double its coal production by 2020.  Think of it:  India can double their coal production. We’re sup-posed to get rid of ours”.

Wrong again. Data from India’s coal ministry shows the actual perform per-formance target of coal production for 2016-17 was just short of 600 million tonnes, against a target of 724.71 million tonnes.  Even with the best of in-tentions and current demand conditions, the target for 2019-20 of one bil-lion tonne of coal production, is far out. It is a target that is likely to be handsomely missed out and especially with no new mines coming up meanwhile. Instead India has aggressively pushed the packet on renewa-ble energy, committing 175 GW from renewables by by 2022, still less than 40% of our total energy mix. But it is an integral element of the two phased reforms in the energy sector; of price reforms for oil, gas and solar and that of ending the monopoly of CIL even as it is pushed into deeper mechani-sation of its mining operations. These are the elements of energy security for New Delhi. None will require those "billions of dollars" which Trump is so loathe to share.

Twitter: @subhomoyb