Budget will need to trackle covid hurdles

The government is aware of the pain points. It will make required interventions in order to propel our economy to the next level

Global economies have been hit hard by the Covid-19 pandemic, and India is no exception. Post-pandemic economic recovery is a big challenge for all of us. Governments and central banks across the world resorted to fiscal and monetary measures to ward off the negative impact of the crisis. These measures included liquidity infusion, credit enhancement, deficit financing, direct benefit transfers, even the printing of currency and distribution of helicopter money.

These stimulus packages did help in the economic recovery, but disruptions in the global supply chain and the resultant strengthening of commodity prices, and liquidity overhang have led to inflation. Now, when the central banks have started sucking the liquidity out of the system to contain inflation and governments are reversing the stimulus in the interests of fiscal consolidation, a sustainable global economic recovery seems to be a distant goal.

The Indian government also came out with a stimulus package in the form of Atmanirbhar Bharat (self-reliant India), which had several measures but stopped short of printing currency, and did not resort to the distribution of helicopter money. So, post pandemic, the Reserve Bank of India (RBI) is comfortably placed in its fight to contain inflation. It can reverse the excess liquidity from the economy in a phased manner while continuing to extend credit support to the needy segments. The government also has ample space for fiscal consolidation.

Our economy, at present, is in a resilient mode and we are witnessing a sharp post-pandemic recovery, thanks to the farsighted approach of the Narendra Modi government and RBI. This confidence in our economy is not only visible domestically, but also seen within the global investor community. Our macro-economic parameters are strong across segments. The government and RBI. This confidence in our economy is not only visible domestically, but also seen within the global investor community. Our macro-eco-nomic parameters are strong across segments. The government is continuing with its infrastructure spending and schemes such as Production Linked Incentives (PLI) are bringing the desired results in the domestic manufacturing sector.

It is against this background that the budget for 2022-23 will be presented. The first requirement to put economic growth on a sustainable path is to identify current challenges and to come up with a roadmap to address them.

The economic repercussion of the pandemic in India has not been equitable and it has been particularly harsh on the informal sector.

Consequently, there has been a deepening of income and wealth dis- parity in society. The last few years have seen very little growth in aggregate private consumption in the economy. Any support for the informal sector will help in increasing private consumption as well.

 

Micro, small, and medium enterprises (MSMEs) are the growth engines of the economy, but were severely affected by Covid-19 related disruptions. They require working capital and other credit facilities. It is expected that the government will extend the credit guarantee scheme for MSMEs. There is also a fear that the looming liquidity crisis might transform into a solvency crisis; it would, therefore, be advisable that the Insolvency and Bankruptcy Code (IBC) provide additional relief to small firms. There is a growing consensus that this segment requires new instruments for private capital formation.

It is expected that the government will focus on fiscal consolidation from the coming financial year . However, there is considerable uncertainty regarding its pace. A fiscal consolidation road map will help in the orderly working of the financial and capital markets. However, the glide path of fiscal consolidation should not be too steep.

Another important issue is the rapid rise in com commodity prices, affecting businesses because they are not able to pass on the increased costs to consumers due to weak demand. Reducing import duties on such products will tame costs and reduce inflation, particularly the wholesale price index (WPI). This will also help manufacturing industries, which were adversely impacted due to the rising costs of base metal and raw material.

Though Goods and Services Tax (GST) collections are increasing, over the years, the average tax rate under GST has come down to around 11.6%, much below revenue-neutral GST rate of 15-15.5% as envisaged at the time of GST implementation. There is space to improve the average tax rate to bring it to around 15.5%. The government must improve the tax to Gross Domestic Product (GDP) ratio.

Corporate tax rate has also been reduced to around 25% on average. However, for the tax-paying middle and upper middle class, the highest marginal rate of taxation is above 40% right now. If the government introduces infrastructure bonds, which provide for additional investment-related deduction from taxable income, then not only will it bring down its total tax liability but also generate critical financial resources to invest in infrastructure.

Disinvestment has been one of the focus areas of the Narendra Modi government and the driving principle behind this is the government's belief that public money locked in such assets should generate higher returns. However, a section of analysts and Opposition parties have tried to portray this as an exclusively revenue generating measure. The government needs to reaffirm the principles of better utilisation of public capital, underlying the disinvestment plan in the budget. Monetisation of assets of public sector undertaking has not been taken up as envisaged earlier and will require renewed efforts.

Our government is well aware of these pain points. The public is confident that it will make required interventions in this budget to propel our economy to the next level and this positive sentiment is quite visible in the business ecosystem. The government will continue on its path of eco- nomic reforms to build on this business confidence.

Gopal Krishna Agarwal is the Bharatiya Janata Party's national spokesperson on economic affairs

The views expressed are personal

National Logistics Policy must include components on Hydrogen Storage & Transportation

 Gopal Krishna Agarwal, National Spokesperson – Economic Affairs, BJP believes that for India to become a 5 trillion economy in the coming years, it must find out new areas where it can catalyze economic growth. This is where green hydrogen can be important. Not only will a green hydrogen economy establish India’s importance in international leadership, it can also propel its economic growth.

Honorable Prime Minister NarendraModi has taken it upon himself to be a global leader in climate change challenges and is committed to the cause of renewable energy. This shows that there is willpower at the top leadership level for achieving these goals. Because of this commitment, after COP21, India has taken some bold steps in meeting emission norms. Consequently, after the Paris Climate Change Summit, India’s emissions have reduced by 28% since the levels in 2005, according to a report. We are almost on the verge of achieving the target of reducing emissions by 30% by 2030.

A major noteworthy measure taken by India is to set up the International Solar Alliance, with its head office in India, along with France. Another initiative taken by India to meet its green energy commitments is to obtain 80-85% of its electricity demand through renewable sources by 2050. India is also committed to the United Nations Sustainable Development Goals, incorporating all the 17 goals into the government policies.

Recently India has achieved target of 40% power generation capacity based on non-fossil sources.

Green hydrogen economy: The baton of a zero-carbon future

However, coal’s share in India’s energy mix constitutes over 44% while oil contributes to around 25%. The share of bioenergy and CNG is 21% & 5.8% respectively while that of nuclear & solar energy is critically low. Coal being a fossil fuel is a recipe for a climate hazard while the oil prices in the country are skyrocketing and imported oil is inflating India’s import bill. As India treads farther on the road to industrialization, its per capita energy consumption will grow from 30% currently, which is lower than the world average consumption, to almost doublein 2040. This is attributed to the fact that India has now displaced US to become the second most attractive destination for setting up manufacturing industries globally.

Though there are certain concerns about large hydro projects, India has a huge potential in it. Similarly, small hydro project can be important initiatives although they are nearly non-existent at present. But at the same time, India now has the world's fifth-largest solar power and fourth-largest wind energy capacities. This energy can be used to produce green hydrogen, a zero carbon emission fuel, and it will be a big game changer for the whole energy sector.

Hydrogen is a big source of energy, and though there are several challenges at present, and India is not a big player in this field, the direction in which private investments and the government is moving can bring big rewards for the country. It will help in energy security, decarbonisation, and to meet the target for reduced carbon emissions. Moving into the sector of hydrogen energy, which can become the most important component on the renewable energy side, there is an estimation that an investment of more than US$ 500 billion will be required in the near future. Many private companies like Reliance, Adani Power, Tata Power and Mittal Power and even some of the government companies in the energies, like NTPC, have set up big targets and there is an expected investment commitment of US$ 316 billion by 2030. If the government policies are supportive, and the challenges pertaining to the implementation of hydrogen energy are met, India can become a big player in this field.

Creating a conducive ecosystem for a green hydrogen economy; setting up of National Hydrogen Mission.

At present, cost is a big challenge for hydrogen technology. There is also a big competition on the solar energy side from China. A big challenge that can be found from the private sector is high interest costs. Though the government is continuously reducing interest costs, more sources of energy and funding are needed for this to happen. If new and improved technology is brought along with innovation and research, the production challenges can be met.

Recognizing the challenges and finding solutions is also something the government is working on. It is now coming up with new industrial and logistics policies to address concerns like transportation and availability of raw material among others. There is also a focus on building manufacturing bases in India. The government has, in the AtmaNirbhar Bharat also committed 90,000 crore rupees on the upgradation of power sector and tackle the issues of grid reforms, improvement in transmission and improvement in the discoms. The private players as well as the government agree that hydrogen and silicon are novel fields that can generate a lot of wealth for the country. Around 1500 crore rupees has been committed by the government for setting up this National Hydrogen Mission. Various policies are being implemented and roadmaps are being set up. Ultimately when the objective is clear and commitment of the highest level for clean and green energy is there, India will surely be able to achieve its targets.

The Government is coming out with new National Logistics Policy; it must address issues pertaining to integrated logistics hubs, hydrogen storage, transportation, warehousing, and ports. Similarly, internalizing the environmental cost on the corporate sector’s balance sheet, will help in proper project evaluation for the government and also bring better presentation. So, the recording of these environmental initiatives in the balance sheet and internalizing cost is another important issue where more research and development can take place. Finance accounting professionals as from Institute of Chartered Accountants of India (ICAI) can take this initiative. More sources of low cost funding are must to propel a robust hydrogen economy in the country and the government is taking steps towards that.

हरित अर्थव्यवस्था के लिए प्रेरक बनेगी राष्ट्रीय हाइड्रोजन पॉलिसी

 गोपाल कृष्ण अग्रवाल,

 राष्ट्रीय प्रवक्ता भारतीय जनता पार्टी

प्रधानमंत्री नरेन्द्र मोदी ने जलवायु परिवर्तन की चुनौतियों से निपटने के लिए वैश्विक अगुवाई करने का भार अपने ऊपर ले लिया है और वे अक्षय ऊर्जा के लिए प्रतिबद्ध हैं। जाहिर है कि अक्षय ऊर्जा लक्ष्यों को प्राप्त करने के लिए शीर्ष नेतृत्व स्तर पर इच्छाशक्ति है। इसी प्रतिबद्धता के कारण, संयुक्त राष्ट्र जलवायु परिवर्तन सम्मेलन (सीओपी-21) के बाद, भारत ने उत्सर्जन मानदंडों को पूरा करने के लिए कुछ साहसिक कदम उठाए हैं। नतीजतन, पेरिस जलवायु परिवर्तन शिखर सम्मेलन के बाद, भारत के उत्सर्जन में वर्ष 2005 के स्तर पर 28 फीसदी की कमी आई है।

एक रिपोर्ट के अनुसार, भारत 2030 तक उत्सर्जन को 30 फीसदी तक कम करने के लक्ष्य को हासिल करने के लगभग निकट है। भारत ने सौर ऊर्जा को वैश्विक रूप से अपनाने में तेजी लाने के लिए फ्रांस के साथ मिलकर अंतरराष्ट्रीय सौर गठबंधन बनाया है, जिसका प्रधान कार्यालय भारत में है। भारत की एक अन्य पहल में 2050 तक 80-85 प्रतिशत तक बिजली की मांग को नवीकरणीय स्रोतों के माध्यम से पूरा करना है।

भारत, संयुक्त राष्ट्र के सतत विकास लक्ष्यों के लिए भी प्रतिबद्ध है और उसके सभी 17 लक्ष्य सरकार की नीतियों में शामिल हैं। भारत ने हाल ही गैर-जीवाश्म स्रोतों से 40 फीसदी बिजली उत्पादन क्षमता का लक्ष्य हासिल किया है।

बिजली उत्पादन में हिस्सेदारी

भारत में बिजली उत्पादन में कोयले की हिस्सेदारी 44 फीसदी से अधिक है जबकि तेल का योगदान लगभग 25 फीसदी है। बायोएनर्जी और सीएनजी का हिस्सा क्रमश: 21 और 5.8 प्रतिशत है, जबकि परमाणु और सौर ऊर्जा का हिस्सा काफी कम है।

कोयला जलवायु के लिए खतरे की वजह है, जबकि तेल की कीमतें आसमान छू रही हैं। जैसे-जैसे भारत औद्योगिकीकरण की ओर बढ़ रहा है, लगता है प्रति व्यक्ति ऊर्जा खपत, वर्तमान में जो 30 फीसदी है, बढ़कर 2040 में लगभग दोगुनी हो जाएगी। इसका श्रेय इस तथ्य में निहित है कि भारत अब विश्वस्तर पर विनिर्माण उद्योग स्थापित करने के लिए दूसरा सबसे आकर्षक देश बन गया है।

हालांकि बड़ी पनबिजली परियोजनाओं को लेकर कुछ चिंताएं भी हैं, लेकिन भारत में इसकी काफी संभावनाएं हैं। छोटी जलविद्युत परियोजनाएं महत्त्वपूर्ण पहल हो सकती हैं, हालांकि ये प्रोजेक्ट्स वर्तमान में लगभग न के बराबर हैं। पर, ठीक इसी वक्त भारत अब दुनिया में सौर ऊर्जा क्षमता में पांचवां और पवन ऊर्जा क्षमता में चौथा सबसे बड़ा देश है। इस ऊर्जा का इस्तेमाल हरित हाइड्रोजन (शून्य कार्बन उत्सर्जन ईंधन) के उत्पादन के लिए किया जा सकता है जो पूरे ऊर्जा क्षेत्र में बड़ा गेमचेंजर साबित होगा।

हाइड्रोजन ऊर्जा का बड़ा स्रोत है। हालांकि वर्तमान में कई चुनौतियां हैं और भारत इस क्षेत्र में बड़ा योगदानकर्ता भी नहीं है। पर जिस तरह से निजी निवेश और सरकार आगे बढ़ रही है, उससे देश को बड़ा लाभ मिल सकता है। ऊर्जा सुरक्षा, डीकार्बोनाइजेशन और कम कार्बन उत्सर्जन के लक्ष्य को पूरा करने में हाइड्रोजन मदद करेगा।

एक अनुमान के अनुसार, भविष्य की चुनौतियों से निपटने के लिए इस पर 500 बिलियन डॉलर से अधिक निवेश की जरूरत होगी। कई निजी कंपनियों और एनटीपीसी जैसी कुछ सरकारी कंपनियों ने भी बड़े लक्ष्य तय किए हैं। 2030 तक 316 बिलियन डॉलर के निवेश प्रतिबद्धता की उम्मीद है। सरकार की नीतियां सहायक हैं और भारत इस क्षेत्र का बड़ा खिलाड़ी बन सकता है।

अनुकूल पारिस्थितिकी तंत्र

मौजूदा वक्त में, हाइड्रोजन टेक्नोलॉजी के लिए लागत बड़ी चुनौती है। चीन से सौर ऊर्जा क्षेत्र मामले में भी बड़ी प्रतिस्पर्धा है। एक बड़ी चुनौती जो निजी क्षेत्र की तरफ से मिल सकती है, वह है उच्च ब्याज लागत। हालांकि सरकार ब्याज लागत को लगातार कम कर रही है, पर चुनौती से निपटने के लिए ऊर्जा के अधिक स्रोतों और धन की जरूरत है। अगर नई पहल और अनुसंधान के साथ नई एवं बेहतर तकनीक अमल में लाई जाए तो उत्पादन चुनौतियों का सामना किया जा सकता है।

चुनौतियों को समझने और उसके समाधान पर भी सरकार काम कर रही है। परिवहन और कच्चे माल की उपलब्धता जैसी चिंताओं के मद्देनजर सरकार नई औद्योगिक और संचालन क्रियान्वयन नीतियों पर काम कर रही है। सरकार का मैन्युफैक्चरिंग बेस बनाने पर भी फोकस है। आत्मनिर्भर भारत की संकल्पना के तहत सरकार ने बिजली क्षेत्र के उन्नयन, ग्रिड में सुधार, ट्रांसमिशन को बेहतर बनाने और डिस्कॉम में वृद्धि आदि के लिए 90,000 करोड़ रुपए की भी प्रतिबद्धता जताई है।

निजी कंपनियां और सरकार दोनों इस तथ्य से सहमत हैं कि हाइड्रोजन और सिलिकॉन ऐसे नए क्षेत्र हैं जो देश के लिए बहुत अधिक सम्पदा उत्पन्न कर सकते हैं। सरकार ने राष्ट्रीय हाइड्रोजन मिशन की स्थापना के लिए लगभग 1500 करोड़ रुपए की प्रतिबद्धता जताई है। विभिन्न नीतियां लागू करने के साथ ही रोडमैप बनाए जा रहे हैं। अंतत: जब उद्देश्य स्पष्ट हैं, स्वच्छ और हरित ऊर्जा के लिए उच्चतम स्तर की प्रतिबद्धता है, ऐसे में भारत निश्चित रूप से अपने लक्ष्यों को हासिल करने में सक्षम होगा।

सामग्री व्यापार को बढ़ावा देने के लिए रसद समर्थन मामले में सरकार नई नेशनल लॉजिस्टिक पॉलिसी लेकर आ रही है। यह एकीकृत रसद केंद्रों, हाइड्रोजन भंडारण, परिवहन, भंडारण और बंदरगाहों से जुड़े मुद्दों का समाधान करेगी। इसी तरह, कॉरपोरेट क्षेत्र की बैलेंसशीट में पर्यावरणीय लागत के समावेशन से परियोजना मूल्यांकन में उचित मदद मिलेगी।

बैलेंसशीट में पर्यावरण के इन नवाचारों को अभिलेखबद्ध करना महत्त्वपूर्ण मुद्दा है जहां अधिक शोध और उत्थान हो सकता है। इंस्टीट्यूट ऑफ चार्टर्ड अकाउंटेंट्स ऑफ इंडिया (आइसीएआइ) के फाइनेंस अकाउंटिंग प्रोफेशनल्स यह नवाचार कर सकते हैं। हाइड्रोजन इकोनॉमी के बढ़ावे के लिए कम लागत वाली फंडिंग के ज्यादा स्रोत होने चाहिए और सरकार इस दिशा में कदम उठा रही है।