The India story today is, like Charles Dickens’ quote in a Tale of Two Cities, ‘a spring of hope, (and) a winter of despair’. Which is the real India story?

In the backdrop are huge changes occurring in the global landscape. First is the change in energy consumption and the phasing out of the fossil fuel industry. Together with this is the advent of the electric car and of driverless vehicles.

Fascinating canvas In a presentation at its analyst meet, RECL CMD Dr Ramesh laid out a fascinating canvas of the changing Indian scenario for energy, and the investment opportunities thus presented. India is targeting a doubling of per capita electric consumption, which is now low at 1,140 kWh. To do this an investment of about $150 billion in generation (largely from renewable sources), $50 billion in transmission and transformation and $50 billion in distribution, is required.

The UDAY scheme has sought to tackle the weak link — distribution. State governments have been brought in to both fund and take responsibility for the losses and some electricity boards, such as UP have managed to raise around $970 million from foreign investors (who are in search of yields) by innovative structures which comfort the foreign investor and enhance the rating of the boards.

Global investors are in search of high yields such as annuity assets, which give a steady stream of income over a long period (think toll roads or power grids) are attractive. As the rupee is steady, foreign investors are likely to fund India’s infrastructure growth. Both IRB Infra and Sterlite Power Grid were able to successfully monetise existing assets.

Challenges There are lots of technological challenges, but these will be resolved. The future would be electric cars (which don’t need fossil fuels) being charged on the run (no time wasted in charging batteries) and fewer cars thanks to autonomous vehicles, which impacts steel, plastic, refineries, component and other industries, as also employment.

The other story is that India is stuck with legacy issues including non-performing loans and a judicial system that seems to have differing standards for the privileged and the laity. Whilst the laity go through periodic KYC hassles, KYC did not apply to the cook of the Punjab Power & Irrigation Minister who, with ₹5,000 in the bank, won rights to sand mining for ₹26 crore.

Air India is only now being investigated for huge losses arising out of an unviable purchase of 111 aircraft financed by unaffordable debt. The investigation must haul up those who made the decision; surely it cannot be the management. Meanwhile, investors who are victims of the NSEL scam are being investigated by the SFIO (Serious Fraud Investigation Office) instead of the ones who defrauded them!

So which is the real India story? It has to be the first and the government needs to severely punish those who have looted the country and its people.

(The writer is India Head — Finance, Asia/Haymarket. The views are personal.)

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