2nd January – Editorials/Opinions Analyses

Contents:
1. Infrastructure Push: A Tall Plan
2. The need for a single energy ministry
3. Preparing for fires
4. Making crop insurance work

Infrastructure Push: A Tall Plan

FOCUS: General Studies 3

Why in NEWs

The unveil­­ing by Finance Minister Nirmala Sitharaman of a mega push to infrastructure investment adding up to ₹102 lakh crore over the next five years

To turn around the sentiments in a stagnating economy, the announcement by Government for big bang reform and investments help.

NIP

• Projects in energy, roads, railways and urban infrastructure under the National Infrastructure Pipeline (NIP) have been identified by a task force.
• The NIP taskforce appears to have gone project­ by­ project, assessing each for viability and relevance in consultation with the States
• About 42% of such identified projects are already under implementation, 19% are under development and 31% are at the conceptual stage.
• As the NIP is a window to the future, a constant review becomes paramount if this is not to degenerate into a mere collation and listing of projects.
• It will help in creating jobs at a large scale in different sectors of economy
• Launching is easy, implementation is the key

Hurdles

• The financing plan assumes that the Centre and the States will fund 39% each while the private sector will chip in with 22% of the outlay. This will be challenging.
• Lack of appetite for fresh investment by the private sector
• Debt will play an important role banks have r their apprehensions on infrastructure financing as a major part of their bad loans originated there. 
• Cooperation from States becomes very important in implementing infrastructure projects.
  

These should not detract from the need for a concerted effort to invest in

infrastructure. The key will be following up and reviewing the pipeline at regular intervals.

The need for a single energy ministry

BACKGROUND

Five different ministries along with  a multitude of regulators govern India’s energy  sector.

Multiple regulators

• Petroleum and natural gas, coal, renewable energy and nuclear energy have separate ministries or departments.
• Ministry of Power, along with State­ level bodies that regulate electricity distribution companies, or DISCOMS.
• Presence of different regulators for each type of fuel and energy source
• It becomes cumbersome for businesses operating in this sector.

Further, the petroleum and natural gas sector has two regulators – Directorate General of

Hydrocarbons for upstream activities and the Petroleum and Natural Gas Regulatory Board for

downstream activities.

Data constraints

• There are also issues with data collection. No single agency collects energy data in a wholesome and integrated manner.
• The Ministry of Statistics and Programme Implementation collates data available from various ministries and conducts surveys at sporadic intervals.
• The Bureau of Energy Efficiency is the sole statutory authority with the mandate to regulate energy efficiency on the consumption side.
• There is no agency or body for the same purpose on the supply side.

Other Countries:

• Developed and efficient countries such as the United States, Germany, France and the United Kingdom have their vibrant, diverse and prolific energy sectors administered by a single ministry or department.
• Energy ministry is in conjunction with other portfolios such as environment, climate

change, mines and industry.

• For example, the U.K. has the “Department for Business, Energy & Industrial Strategy”,

France has the “Ministry of the Environment, Energy and Marine Affairs”,

• The predominance of unified energy ministries is evident.

Kelkar Committee

The Kelkar Committee in its report “Roadmap for Reduction in Import Dependency in the Hydrocarbon Sector by 2030” (2013) stated that “Multiple ministries and agencies are currently involved in managing energy­ related issues, presenting challenges of

coordination and optimal resource utilization, hence undermining efforts to increase energy

security”.

Draft National Energy Policy (NEP)

• The NITI Aayog – Unified Ministry of Energy be created by merging the Ministries of Petroleum and Natural Gas (MoPNG), Coal (MoC), New and Renewable Energy (MNRE) and Power (MoP)
• The Department of Atomic Energy (DAE) has been left out since it has implications beyond the scope of energy and involves national security issues.
• THE proposed ministry would have six agencies under it to handle various aspects of the energy sector — Energy Regulatory Agency, Energy Data Agency, Energy Efficiency Agency, Energy Planning and Technical Agency, Energy Schemes Implementation Agency and Energy R&D Agency.

Enabling optimisation: Benefits of Single ministry

Integrated outlook on energy enabling us to optimize our limited resources to meet the goals of energy security, sustainability and accessibility.

Quicker policy response in the fast changing energy environment

Formulating an integrated and wholesome energy policy in the current governance structure

is a complex and challenging task not only due to lack of coordination among ministries but also due to the absence of good quality consumption data and an inadvertent promotion of their own fuels over other choices, which may not always be the best option.

Some Steps

• Single ministry for MNRE and MoP.
• The hotly debated issue of nonpayment of dues by DISCOMS to the generators might also be resolved with such synergy in administration.
• In the past having same minister for MNRE, MoP and MoC with great results in village electrification, LED bulb distribution (Unnat Jyoti by Affordable LEDs
• for All, or UJALA), power sector reforms (Ujjwal DISCOM Assurance Yojana, or UDAY), coal block e auctions and alleviation of coal shortages.
• This demonstrates the intention of the political leadership to reform the energy governance structure.

Accepting and implementing the recommendations of the NEP on reforming energy governance,

would need to be carefully traversed given their hard­ hitting implications on the existing bureaucratic structure. But nothing is more important than ensuring energy security, sustainability and accessibility.

In this age of energy transition, this can only happen with quick and holistic decision ­making as

well as providing a level playing field for various fuels, all of which can happen if a single ministry handles the entire sector. Such a Unified Ministry of Energy will not only enable India to keep up with the global energy transition but also to continue to be a leader in adopting cleaner energy sources.

Preparing for fires

Serious Fire tragedies in Delhi

• India saw at least three major fire accidents in 2019.
  • The first, in a four­ storey central Delhi hotel  killed 17 people.
  • The second, at a coaching center in Surat, killed 22 students.
  • The third broke out in a factory in Delhi and resulted in the death of 43 workers.

• In the second and third instances, it was found that buildings authorised to

be residential complexes were operating as commercial buildings instead.

• Despite major fires in the past, flagrant violations of building and fire safety norms continue unabated and fire accidents take place with alarming regularity.
• It is high time safety is taken seriously and violators are brought to book.

• Three major reasons:
  • Electrical short circuit and gas cylinder/stove bursts
  • human negligence,
  • Ill ­formed habits.

Adherence to National Building Code

• Adherence to the National Building Code of 2016 should be made mandatory.
• It includes a separate and comprehensive chapter on fire and life safety.
• It specifies, for instance, how many exits should be provided in a specific kind of

building and where they must be placed.

• In the case of the Delhi fire, it was not only reported that a residential space was operating

as a commercial space, but also that the fire exits in the buildings were blocked, thus

trapping people inside.

SOLUTIONS

• First stage is to construct the building with fire ­resistant/retardant materials and

install smoke detection systems and fire alarms.

• A building’s fire alarm/detection system should be connected with the city’s fire

system.

• Fire compartmentalization (area/ floor wise) should be made mandatory to

restrict the spread of fire through horizontal and vertical spaces.

• Periodically assessing and monitoring fire risks.
• Fire safety udit (FSA) is a good tool to assess fire safety standards of an occupancy and  should thus be made mandatory everywhere.
• Once electrical and fire installations are in place, they should be certified by authorised
• persons and agencies.
• No­objection certificates should be renewed only after verifying the originally intended

use of the building being certified and any change in the building’s pattern.

• In case fires break out despite all this, fire services should always be in place. This too

is lacking in India.

Building awareness

• Awareness of fire safety is nearly absent in India.
  • In schools, the curriculum should have a chapter on fire safety.
  • Regular drills should be conducted so that children are
  • prepared to handle such incidents.
  • Communities managing housing and commercial premises need to regularly organise awareness programmes with assistance from authorised persons and agencies.
  • These need to be not only on fire safety but also on other disasters such as earthquakes and floods.
• Dedicated access lanes for quick movement of emergency vehicles.
• Under the Smart Cities Mission, ‘smart control rooms’ should be able to guide emergency

vehicles through the shortest route and enable coordination among various departments such as police, traffic police, fire, ambulance, and security forces.

• A lot of ground has to be covered before India can claim to be a fire­safe country.

Making crop insurance work

BACKGROUND

PMFBY has failed to impress stakeholders

The government’s move to revisit the flagship crop insurance scheme — the Pradhan Mantri Fasal Bima Yojana (PMFBY) — is a welcome step to make this well-intentioned risk-mitigation measure beneficial for the farmers.

Concerns

• A group of ministers (GoM) headed by the defence minister and having the home minister, among others, as a member is debatable.
• Field experts, along with representatives of the stakeholders like farmers, insurance companies, and the state governments, could perhaps do a better job.

• This scheme, despite being better than all its predecessors, had failed to impress any stakeholder because of some inherent structural, financial, and logistical deficiencies.
• The all-pervasive dissatisfaction on this count is evident from the decision of three major agricultural states — Andhra Pradesh, West Bengal, and Bihar — to withdraw from it. At least three more states — Karnataka, Gujarat, and Odisha — are also intending to do so.

• This aside, four private insurance companies have also opted out of it, maintaining that it is a loss-making business.
• More companies are likely to quit this business, though the common impression is that the insurers are cornering the bulk of the subsidy given by the government.
• The farmers, too, are discontented with the scheme though they have to pay a premium of merely 1 per cent for rabi crops, 1.5 per cent for kharif crops, and 5 per cent for commercial crops.

Flaws in scheme

• Involvement of the states as equal partners with the Centre for sharing expenses (read subsidy). Defaults in the payment of their share of funds affect the insurance companies’ ability to clear settlement claims promptly.
• Empowering the states to notify the crops, the extent of the land, and the maximum sum that can be insured have also contributed to the downfall of the PMFBY.
• The states often fix the caps rather low to contain their financial burden, thereby curtailing

the scheme’s utility for the cultivators.

• Moreover, allowing banks to insure the crops of their borrowers is another problematic feature of the scheme.
• The banks usually adjust the settlement amounts against the loans, thus leaving the farmers high and dry.
• The insured cultivators often do not even get to know the details of the transactions.
• Though the scheme envisages the use of technology, notably satellite imaging, to expedite the assessment of crop losses, it has so far not happened to the desired extent.
• The methods used by the state governments to gauge the damage are mostly time-consuming and non-transparent, resulting in trust deficit.
• Unsurprisingly, therefore, inadequate or non-payment of compensation is the
• main grudge of the farmers against the scheme.