Letters to the editor dated December 29, 2021

This refers to ‘Pulling the plug’ (December 29). India cannot do away with coal at least for the next 3-4 decades as it is endowed with large reserves of coal, which can last for over 200 years at the current rate of production. Compared to this, oil and natural gas reserves are meagre.

The 135 coal-fired power plants in the country meet more than half of its energy needs. Hydropower potential is about 1.5 lakh MW, of which, only 30 per cent has been exploited so far due to environmental issues. Hence, hydropower may not contribute in a major way to future capacity addition.

Solar and wind will be the main contributors to renewable energy with their combined potential of about 100 GW. Increase in nuclear power is uncertain since it depends upon environmental and safety issues and people support.

Thus, coal is inevitable in the energy mix of the country in the foreseeable future.

It is a myth that renewables can meet all the energy needs. Till new sources of energy are developed, India has no option but to depend on coal.

Bengaluru

The NITI Aayog’s plan for only a modest growth in coal-based power, by scrapping the old coal power plants, is laudable. Phasing out coal-fired power plants cannot be done quicky as much of India’s electricity is generated using coal. Augmenting power through new coal plants will help in reducing carbon emissions.

However, addition of power plants should be need based and the momentum of decommissioning old plants needs further acceleration. The resultant space available post decommissioning of plants can be used for installation of solar power plants.

Chennai

This refers to ‘India can be a winner in semiconductors’ (December 29). Both automobile and consumer electronics companies across the globe have faced semiconductor supply constraints, mainly due to the pandemic and frosty relationship between the US and China. Giants like Huawei have been blacklisted by the US.

This crisis will not go away in a hurry. Intel’s chief has said that it will be a year or two before supply returns to normal, as manufacturing cannot be ramped up on short notice.

India needs to work towards becoming an alternative source of semiconductor supply. The country must, however, focus on bridging the demand-supply gap at the domestic level first.

Noida

This refers to the report on ‘Trends and Progress of Banking in India 2020-21’, released by RBI. Prima facie , the report presents an optimistic view of the performance of the banking sector based on the improved trends observed in areas like CRAR (capital to risk weighted assets), decline in GNPA (gross non-performing assets), improved RoA (return on assets), etc.

The RBI report was released when banks were passing through a regulatory forbearance phase on account of the Covid pandemic and involved relaxation extended by the RBI.

These included easing norms for restructuring assets as per which restructured assets were not required to be classified as NPAs, assigning lower risk weightage, lower provisioning and capital requirements, etc., which should have bolstered the performance of banks.

Further, in spite of ample liquidity enjoyed by the banking sector, the credit growth was muted which too should have led to assessing banks on a positive note based on these vital parameters.

The formation of National Asset Reconstruction Company Ltd(NARCL) to clean up bank books, by taking over stressed assets, would further underplay the bad debt position of banks.

Since there is a prolonged stressed scenario which banks are working under, it is time that banks are subjected to ‘stress test’ to assess where they stand and whether there is operational resilience in the banking sector to see through this challenging period.

Chennai

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