Bickering until everybody loses

    This Friday(31st August), India's GDP growth numbers for the quarter of April-June will come out. Analysts are forecasting tepid pace of growth following previous quarter's disappointing numbers. Meanwhile, investments are slowing down , infrastructure development is grinding to a halt .There is more pessimism about near term growth. RBI, worried about persistent inflation is unlikely to ease monetary policy drastically.The solution as ever, is to enact some of the long pending reform measures.

     Presidential elections were seen as a hurdle the government had to get over before starting a fresh reform drive. Elections have come and gone with no major signs of policy response by the government. On cue, the new parliament is in session and a familiar script is playing out. BJP , the main opposition party wants the prime minister to resign, this time over alleged irregularities in the allocation of coal blocks to private enterprises.
  
    Disruption of parliament proceedings is becoming a norm than an exception. To be sure, if BJP comes back to power in the next parliamentary elections who is to say their main opposition(Congress party) would not respond with the same scorched earth tactics. All they need to do is hold up evidence of malfeasance somehow connected to the ruling coalition and demand the ouster of the government. Lord knows there is enough graft and misgovernance to be found among all major parties' state and local governments. This cycle could become recursive. I wonder how long this has to go on before we have a government that is willing to govern and will be allowed to.

Articles of interest - 28 August 2012

Here are some interesting reads:

India's Olympics programme : India ink New York Times

Money in american politics: Bloomberg

Plundering India's PDS scheme : Bloomberg

Impact of enacting Goods and Services tax(GST): Bloomberg

The case for rooftop solar

    Indians who track infrastructure development in the country got a stark reminder of the ground yet to be covered when half the country was left with no electricity. Last week's blackouts may have been caused by problems in the grid. The sources of energy are a cause for concern too.

    Thermal power stations suffer from poor supply of coal leading to many of them remaining idle. When monsoons are deficient the hydro power capacity is hurt. Capacity addition in wind power is showing promise, but has a long way to fulfill it's potential. Solar however, is yet a vastly untapped source.

    I was in southern Germany a couple of weeks ago on vacation. Homes like these in the pictures below(taken during the trip) were all too common, a noticeably large percentage of homes with solar panels installed on their rooftops.

    North India gets about 300 clear sunny days in a year. and in the south that number is around 250 days a year. In many cities, solar powered water heaters are mandatory for new homes. Costs of the panels have been in steady decline in the last three years. Rooftop solar power should have a greater role in India's energy portfolio. India should set up a feed in tariff regime, which would allow homeowners to sell excess power back to the grid(Although the grid needs to be more robust to support feed in power).

   Sure, India cannot afford the levels of subsidy offered by an industrialized country like Germany. At the moment, solar power is still expensive . By having a more conducive regulatory regime, we may well unlock Indians' now famous ability at jugaad innovation in building cheaper systems. It is not wise for a government to drive industrial policy. Promoting solar energy, especially rooftop solar may just be a reasonable exception in India.