The power failure that crippled India demonstrates that the country has a long way to go to become a global superpower.

The occurrence of negative events in India is so frequent that European media now devotes prime time and space to stay abreast of the calamities.

The massive power blackouts on two successive days that left more than half the country without power in India were widely reported by European media.

And, as to what followed that, I am reminded of a line from Ian Fleming’s novel, Goldfinger very appropriate in this situation: “Once is happenstance, twice is coincidence, the third time it’s enemy action.”

Europeans watched with incredulity, shall we say, the ‘enemy action’ in the form of the cabinet reshuffle enacted during the blackouts where the Power Minister was promoted to a more senior post!

Across Europe, media reported this as the most glaring sign that, “India is not ready for serious, grand-scale investments”. German newspaper Handelsblatt said “India has difficulty keeping the lights on from one end of the country to the other.”

A top investment advisor of the Asia Pacific Committee of the Federation of German Industries said to me, “this embarrassing power failure demonstrates India has a long way to go before it achieves the global superpower status it seeks to attain”.

Top European investors I spoke to expect more internal trouble to surface in India that will stunt economic growth more swiftly than most experts expect. And European credit rating agencies I interacted with this past week, anticipate India to receive multiple ratings downgrades in the next twelve months.

A well-known Europe-based international investment banker said to me: “While India is now the eighth largest military spender in the world — having tripled defence spending in the past 10 years — your country is still grappling with electricity, with pot-holed roads, without a modern rail system, without good education for the youth. Where exactly are you heading?” he asks.

Numerous blips

Europeans wonder how the Power Minister sleeps when the entire country is in a shambles — power cuts, pilferage, generator sets adding to noise pollution and smoke from the exhaust filling the air with toxins.

Europeans are shocked that Indians do not seem to mind spending about $6 billion every year to maintain power back-up equipment to secure themselves against frequent outages.

We are full of prattle but lacking in action. This is clearly evident in our performance at the Olympics.

We rank number 15 from the bottom out of 56 countries — amidst nations such as Azerbaijan, Armenia, Mongolia, and Ethiopia. Even much smaller countries, such as Cuba, Colombia, and Belarus, have performed better.

German sector

Living in Europe for over two decades, not even once have I experienced any power breakdown or voltage fluctuation. Germany, for instance, possesses a closely meshed electricity grid where congestion or breakdowns are unknown.

The German market for electricity was opened to competition in 1998, which means that industry and private customers can pick their individual provider.

There is legal and operational unbundling of generation and the networks.

There are four companies that own 90 per cent of Germany’s electricity generation capacity.

Electricity can be traded through long-term bilateral over-the-counter transactions between generators and users, and on energy markets through the European Energy Exchange.

Europeans have understood that if the lights are to be kept on at all times, the smart energy system of the future needs to provide the necessary flexibility to allow new low or zero carbon power generation sources to be added to the grid.

Erroneous planning

If we come to really think about our misfortunes and failures, it falls on erroneous priorities — not lack of planning.

Our failings have been manmade – a colossal failure of leadership and governance.

(The author is former Europe Director, CII, and lives in Cologne, Germany.

(This article was published on August 6, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.