From: The editor, Business Today. DT.: 24-09-2014
At the time of going to press, news was coming in that Prime Minister Narendra Modi would launch his ambitious "Make in India" campaign next week. Companies from across the globe have been invited for the function, and many have indicated they would attend. At the function, the Prime Minister is likely to announce major incentives to make India an attractive destination for setting up manufacturing plants for even global companies. A number of manufacturing hubs are expected to be created because of this programme, bringing in investments, creating hundreds of thousands of jobs, and giving a boost to the economy.
One of the crucial things that can make or break this programme is the availability of power. Reliable, inexpensive and uninterrupted power is an absolute must for a manufacturing unit to function smoothly. (There are others, of course, like tax incentives, land availability for expansion and peaceful labour, but even after all those are in place, manufacturers need to be assured of good power supply.)
The problem is that currently a number of thermal power plants in the country have shut down because they have run out of coal - and there are others which are in a precarious situation because they have just one or two days of stocks left as buffer. Almost one-third of the power capacity in the country is not generating any electricity due to fuel supply problems. Thus, unless the problem of domestic coal production and supplies is fixed - and fixed very quickly - Modi's dreams of making India a global manufacturing hub cannot come true.
The irony is that India has over 300 billion tonnes of fuel as reserves, and this is enough to fulfil our needs for the next 200 years. The issue is that we have been producing less than 600 million tonnes a year of coal from domestic mines, though we need a minimum of one billion tonnes per annum immediately.
Unless the coal crisis is sorted out, the Prime Minister's Make in India campaign will come to nought. And even the economic recovery currently under way could come under strain.