Smart meter roll out across the country?

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Poor financial health is preventing state discoms from supplying uninterrupted power under the Govt's 24x7 power-for-all action plan. Latest information shows discom losses have jumped by 62% in the first 9 months of 2018-19!! Govt is using many means to reduce power waste and limit discom losses, such as LED lighting, solar-power irrigation pumps, new sub-stations and upgrading transformers, segregation of agricultural power feeds, and using insulated wiring to prevent theft. Smart meters are ideal as they capture real-time power usage data, identify sources of power losses and improve billing efficiency & collections.

Govt has now decided to install smart meters in every home and business!! As per the plan, 300m smart meters (~Rs 60,000cr) in over 3 years will be required and Centre will subsidize part of the cost. Smart meters are expected to cost Rs 2000 or $29/- a piece. (Though negotiations with manufacturers are under way, units should be cheaper than the earlier rate of Rs 2,500/- a piece). ITI Ltd., Genus Power Infrastructures Ltd. and state-owned Karnataka State Electronics Development Corp. have won bids to supply smart meters in previous tenders. Other companies that make smart meters include L&T, Schneider Electric SE and Siemens AG.
India considers mass roll-out of smart meters to revive utlities

Worldwide installations of smart electricity meters will reach 800 million by 2020. China is expected to have installed 435 million smart meters based on M2M technology by 2020, followed by the US (132m), Japan (58.7m), the UK (53m) and France (35m). Installed base in China, India, Japan and South Korea will grow at a CAGR of 7.9% from 613.4m (2018) to 966m (2024). In the next six years, smart meter penetration among electricity customers in the region is expected to grow from 67% in 2018 to 94% by end-2024. Following a few years of pilot projects, India is launching large-scale smart metering projects, driven by governmental targets to reach nationwide coverage of smart prepaid metering. With the re-election of PM Modi, deployments are expected to pick up pace in 2020 after a slow start in 2019. 

India's deployments were boosted by government-owned energy services company EESL. Through its demand aggregation and bulk procurement model, EESL is addressing the cost issue of smart metering investments, which is currently the main obstacle for Indian state utilities. So far, EESL has procured 10 million smart meters, which can be compared to the total installed base of less than 1.5 million meters in 2018. Since EESL has made cellular point-to-point its preferred smart meter communications technology, cellular connected meters are expected to take a central role in the coming mass-deployments. With NB-IoT-ready meters already emerging in the market, the uptake of smart meters with cellular LPWA connectivity is expected to see a sharp increase as soon as the relevant network infrastructure is in place.
China, India, Japan, South Korea to install 1 bln smart electricity meters by 2025

June 28th, 2019

Railways Initiatives

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1. Ensure track-laying plans are adhered to, eg. BG gauge conversion & DFCs are completed by 2022.
2. Take up and complete various connectivity projects on time and at cost, including expansion, doubling, suburban railways, bullet trains, new DFCs, tunnels & bridges, etc.
3. Electrify the entire BG (of remaining 28,800km) by 2022, and successfully implement all the steps to realise benefits, eg. enough new electric locos or converted diesel locomotives.
4. Ensure digitization and advanced signalling are pushed to the maximum extent.
5. Fast-track station modernisation along with commercial premises. Add where necessary, other infra such as multi-modal terminals, multiple exits to street-level, foot-over bridges & gangways, disabled access, escalators & lifts, security fencing, CCTV cameras, disabled-friendly WCs, roof-top solar panels. rainwater harvesting, real-time information displays, etc.
6. Progress mechanisation as per plan for laundries, sweeping, platform access, vending machines.
7. Ensure railway management is systematically improved and privatization is promoted where possible.
8. Strive to grow freight & passenger volumes and improve the operating ratio. Ensure freight rates are brought down, and all types of freight is facilitated so that dependency on coal is reduced.
9. Fine-tune Train-18 (160kmph Vande Bharat Express), and complete development of Train-19 (sleeper trainset) and Train-20 (180+kmph light-weight trainset).
10. Layout an aggressive path for implementing semi-HSR rail on most frequented routes and complete track and other necessary upgrades. Ensure strong roll-out of fast all-electric trainsets.
11. Ensure higher speeds on passenger and freight trains, by addressing various needs like removal of speed restrictions, high powered locos, passenger trains with automatic doors & ventilation, slots for freight trains, upgraded signalling, doubling, etc (see below).
12. Ensure track safety (by fencing, clearing encroachments, underground/ elevated tracks through built-up area, etc), fire safety in trains & depots, automated collision avoidance through technology, adequate track renewal & maintenance backed by automated rail-crack detection (optimised selection with AI), automated track laying where possible, upgraded track specifications and proper design & execution of railway projects.
13. Enhance passenger safety including fencing and securing perimeters of railway stations, GPS tracking of trains, CCTV with artificial intelligence, rapid security response, detection of firearms and explosives, emergency assistance.
14. Ensure high quality and safe trains, coaches and train-sets are deployed and old stock is removed in a progressive manner.
15. Enhance passenger travel experience in premium or reserved coaches including bio-vacuum toilets in every coach, consistently high food quality, automated doors and air cooling, broadband connectivity, real-time information, cleanliness, high quality IT platform & services, etc. Ensure good standards are provided for unreserved classes.
16. Specific proposals or 100-day action plan i) semi-HSR track for Delhi-Howrah (1525km, Rs 6,700cr) and Delhi-Mumbai (1483km, Rs 6,800cr). ii) remove all 2,568 manned LC on the Golden Quadrilateral and Diagonals over 4 years, as a special measure using 100% safety funds. iii) add wi-fi facility in remaining 4880 stations by 100 days. iv) corporatize 7 production units & workshops to bring in modern working practices & technologies. v) pilot projects for advanced signalling. vi) deploy 10MHz spectrum in 700MHz frequency (if given to IR at affordable cost) for safety (signalling, operations in fog), higher capacity, security and passenger services. vii) "complete technology revamp" with paperless IR working (e-office) complete by 2yrs , and upgrading of Passenger Reservations and Railway Information systems. viii) rightsizing the ministry and merit-based selection of board and zones. xi) redevelopment of 50 more railway stations.
http://www.irtsa.net/pdfdocs/100-Days-Action-Plan-of-Ministry-of-Railways.pdf

Banking and credit Initiatives

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1. Improve bank efficiency though mergers, partnerships, rationalisation, new technology, bundling, etc 2. Resolve regulatory capital inadequacy of weak PSU banks (ie. exit from PCA) and stop possible contagion from a non-bank financial institution default. 3. Enhance PSU bank capital to support much higher lending, as there is unrequited demand for bank credit. Ensure adequate funds for infrastructure loans under private-public partnerships. 4. Expand Post Office bank branches and services by making links to Bharatnet, satellite or other modes of broadband access. Ensure all bank financial transactions are reported in real-time, suspicious transactions are flagged and adequate bank scrutiny takes place by regulatory authorities.
5. Ensure financial soundness of banks by improving credit risk assessments and by stipulating rules for reducing systematic risks in the loan portfolio.
6. Improve credit to private sector by encouraging formalisation of the economy, by providing access to official economic records (with consent of borrower), like GST records, customs records, and by improving effectiveness of external auditing and rating agencies.
7. Generate regular supply of economic data through detailed economic surveys, automated traffic flow data, e-way bills, digital hospital admissions data, etc. so that detailed market analysis can be done.
8. Further increase the collection of micro-data by automated data input (eg retail point of sale, compulsory digital tickets, common GST invoicing portal, online transactions under Govt e-market). Encourage payment by digital methods.
9. Improve understanding of industry clusters to increase credit. Take measures to enhance the viability and credit-worthiness of industry clusters (eg. relaxed labour laws, complete value chains, logistics).
10. Streamline export credit guarantee mechanisms to reduce risks, reduce transaction costs and margins, and considerably improve off-take even without subsidy. Negotiate with RBI for using part of the forex reserves for export credit.

June 26th, 2019 

States's growth and finances

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1. Lack of convergence of State per capita GDP: Growth in FY13-18 (5.8%pa growth) shows distinct groups of states: low growth, low income group and a high growth, high income group, suggesting the low per capita income states are being left behind. It has become more pronounced, from earlier FY08-13 (5%pa growth), as high income states have increased growth to above average, while high performing poorer states have cooled to average or less.

LOW INCOME  FY08-13 ->   FY13-18    HIGH INCOME    FY08-13 ->  FY13-18

1. Bihar              9.7%            5.1%         1. Telangana           7.4%             7.7%

2. MP                 7.2%            6.1%         2. Gujarat               6.9%             8.1% 

3. Rajasthan       7.2%            5.4%         3. Haryana             6.4%             6.4%

4. W. Bengal      4.8%            4.5%         4. AP                       3.6%             9.1%
5. Odisha           3.1%            5.9%         5. TN                      7.2%             5.4%
6. Chhattisg.      4.2%            4.8%         6. Maha.                 5.4%             6.3%
7. UP                  4.6%            4.4%         7. Kerala                 6.1%             5.6%

8. Jharkhand      5.4%            3.0%         8. Karnataka           4.0%             7.3%

                                                               9. Punjab               3.9%             4.4% 

2. States & narrative on fiscal deficit, growth:

HIGH INCOME - low FD is preferred
Gujarat : Very good growth and very low FD

Maharashtra : Very good growth and very low FD

Karnataka: Very good growth and low FD

Haryana : Good growth but high FD that has become acceptable

Telangana: Very good growth but high FD

Andhra Pradesh : Very good growth and high FD

Tamil Nadu : Moderate growth and acceptable FD

Kerala : Low growth and high FD

Punjab : Low growth and sky-high FD

LOW INCOME - growth more important

Madhya Pradesh : Very good growth and raised FD

Odisha: Good growth and very low FD, except for FY18

Bihar : High growth returns at expense of FD rising from acceptable to very high

West Bengal : Rising growth and enters low FD

Chhattisgarh : Low growth and low FD, though raised in FY18

Rajasthan : Moderate growth and very high FD, though falling

Uttar Pradesh : Low growth and high FD but improving

Jharkhand : Low growth but enters low FD. High growth with high FD in FY17

3. Impact of high inflation in some states

— i) Fiscal deficit as % of GSDP shrinks as relatively higher inflation increases nominal GSDP, reduces the value of carry-forward loans and brings higher govt revenues. 

— ii) Govts should shift monies to investments to rein in surplus monies & target capacity constraints

4. Fiscal deficit, growth: Most states breached FRBM's threshold of 3% FD in 2016 (3.1%) & 2017 (3.5%) as they took over discom debts under UDAY. 2018 levels remained elevated at 3.1% vs ~2.6% (in 2015). WHY?
— i)  Stimulus for growth has worked for Bihar and AP
— ii) States are collecting less tax  
— iii) States' share of public capex has risen sharply from 30-34% to 44-48%. Low growth states like Rajasthan, Jharkhand, UP, Bihar, Odisha, MP (also Punjab, Telangana, Gujarat) spent most. (NB. Low growth states with historically high FD sharply reduced FDs, eg Rajasthan, Jharkhand, UP, Punjab).
June 22nd, 2019

States's growth 2.0: Status and how each state got to where it has

Smartphone penetration and demand for 5G

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India in a different league to Asian peers as far as data consumption is concerned. India has the world's highest data usage per smartphone at 9.8 GB/ pm, and is set to grow to 18 GB/pm in 5 years!! This is a trend in other emerging countries like Latin America and Middle-east. 

Mobile broadband (610m subs) makes up over 50% of cellular connections in India. By 2024, smartphones would have reached near-full penetration with 1,100m users and 1,250m subscribers. Telcos will see a 23% pa growth in data traffic. 

"These results are not surprising, as India’s mobile data plans have long been the cheapest in the world. In fact, Reliance Jio charges just 149 rupees (~$2) for 1.5GB of mobile data daily over 28 days".

India will NOT be the fastest adopters of 5G, but half of the smartphone users express a desire to buy the next generation 5G mobile technology at premium rates. They expect their providers to avail 5G services or they will switch. Govt is sensitive to these needs. It has asked the regulator to recommend 5G spectrum reserve price (which is likely to be heavily discounted), and modalities of 5G trials and spectrum auction.

Data usage per smartphone is the highest in India – Ericsson

June 21st, 2019

Dealing with falling growth and rising unemployment
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GDP quarterly growth has fallen to a 5-year low and unemployment rate has touched a high of 6.1% (though employment data is non-comparable with earlier periods). It does not mean that raising growth (which may happen on its own) will necessarily increase employment -- as "jobless growth" was seen even in the fastest period of growth, between 2004 to 2009 where only 1 million jobs were created. Nevertheless there is a dire need to pump money into the economy but the fiscal space is not there.

For growth improvement, clearly the credit supply is clogged. It is said that 14 lakh crore bank capital is locked in stressed assets and the resolution process is still slow (despite insolvency reforms). Public sector banks, comprising 2/3rds of deposits, are facing severe capital shortages. They have become risk adverse and so credit availability is drying up. Gross capital formation has dropped from 34.3% in 2014 to 31.0%. This should be reversed for stronger growth.

Demand or consumption is weak, but this is a symptom of low investment or growth. A boost to investment is required. Govt has a packed agenda so higher public sector investment will surely happen. The govt in respect of the current budget is constrained by fiscal prudence, of not exceeding its 3.4% fiscal deficit figure. Surplus RBI capital is a probable solution. Bimal Jalan Committee will report by end-June on its use, and it could be used for bank capitalisation.

Unemployment issues have to be resolved independently and the problem is more structural. Though policy changes or reforms will be required, judicious allocation of funding can be done in the budget. It is best to look at long-term solution which is to improve labour productivity through education and skilling. Also, targeted funding in labour-intensive industries can be tried after due analysis on its potential in India.
Budget 2019: Jobs and economy are the core challenges for Sitharaman

Capital requirements for Banks
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It is estimated that budget will set aside Rs 30,000cr for bank capitalisation. But why?
1. To meet minimum regulatory capital requirements in this fiscal
Govt wants to remove the remaining 5 weak banks from RBI scrutiny (Prompt Corrective Action) this fiscal and it must pump capital into banks for them to meet Basel III norms. 6 out of 11 weak banks came out of PCA last fiscal as part of Govt's bank capitalisation programme of over Rs 100,000cr. One weak bank joined in a 3-way merger with Bank of Baroda, so Govt will infuse capital to make the new bank financially strong.

Larger banks such as SBI and BoB have been given permissions to float their equity. Banks in general are unable to tap the markets as their shares are severely marked down. The non-core assets of banks are lower than earlier estimated. Thus, banks are coming to Govt to make up the shortfall.

2. Banks need capital to increase bank lending, which has just started to pick up.
FinMin assessing capital needs of PSU banks, may provision Rs 30,000 crore
June 16th, 2019

Agriculture and water

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1. Wheat production: India is not the ideal geography for wheat, which requires cooler climate. It is unable to export surplus wheat due to high MSP. However, according to gain.fas productivity has risen in last three years from 3.2 to 3.35. Record production was seen in 2018-19 (101.2, 3rd estimate).

http://www.fao.org/faostat/en/#data/QC/visualize

"Farmers prefer wheat to other crops in irrigated areas because of ‘assured’ returns due to Govt’s effective MSP wheat procurement program. Wheat productivity is relatively stable under irrigated conditions vis-à-vis other competing crops. While wheat yields in the irrigated northern states are comparable to other high yielding producers in the world, yields in other states have also been steadily increasing with the expansion in irrigation facilities and adoption of improved varieties and production technologies, resulting in an upward yield trajectory in recent years".

https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Grain%20and%20Feed%20Annual_New%20Delhi_India_3-29-2019.pdf

2. Rice production: India has ideal geography for rice, but rainfall limits its production. India is price-competitive so it can export surpluses, making it the top global exporter. Record production was seen in 2018-19 (115.6, 3rd estimate).

"India’s rice acreage has plateaued at around 44 MHa in recent years. However, production shows steady increases on improving yields due to the new varieties, better agronomic practices, and expansion in irrigation facilities. GOI's National Food Security Mission and other crop specific programs, have enabled productivity gains in the eastern and southern states. However, India’s overall rice yields are still well below the world average and has wide variations, creating further room for increasing rice productivity.
"Various rice-growing states like Punjab, Haryana, Uttar Pradesh, Andhra Pradesh, West Bengal, Orissa and Chhattisgarh follow intensive rice-based cropping systems (rice-wheat or rice-rice). These intensive cropping systems are repeated year-after year on the same land, leading to deteriorating soil health, declining water tables, and the emergence of new resistant diseases/pests".

https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Grain%20and%20Feed%20Annual_New%20Delhi_India_3-29-2019.pdf

3. Production of food grains and other crops during Kharif and Rabi
http://agricoop.gov.in/sites/default/files/3rdADVEST201819_E.pdf

4. Area and Production of Horticulture (2nd estimate 2018/19)
http://agricoop.nic.in/sites/default/files/2018-19%20%282nd%20Adv.Est_.%29%20-%20For%20Website-1.pdf

5. Agricultural value added, time trend for India, China, Indonesia, Brazil, Pakistan, US
India lost agricultural valued added relative to other performing countries, from 1990 to 2011. In other words, it was a period of relative stagnation in Indian agriculture. Lack of agricultural reforms and lukewarm rural investment probably led to a spike in farmers' suicides and migration out of rural areas to cities (caused by rural distress, affecting not only agriculture but rural livelihoods). Recent growth in agricultural value added in India since 2011 (2015- strong year), shows it can match others provided efforts are made. Reforms and investment in agriculture and rural economy will have a good response.

For example, rural roads have increased rural economic & trading activities. Bamboo in industry, crop residues and commercial crops will be linked to local processing. Future activities such as food processing, bio-CNG & biofuels from sugarcane/ others, solar energy, ancillary farming (eg. honey, aquaculture, shed rearing of goats/sheep, compost making), covered horticulture even in hostile climate/ water deficiency, repair of machinery/ irrigation facilities. Increased efficiencies from cold chain and fast reliable logistics, soil health card & organic farming, micro-irrigation & piped distribution, river-linking/ dam completion & raising ground water levels, mechanization, double cropping & short sowing cycles, pest resistant strains, agricultural credit & interest subvention, warehousing, marketing reforms and exports, Digitisation & IT incl artificial intelligence, training perhaps with Israeli know-how and technologies, etc.
6. Monsoon and predictions for Kharif crop
https://krishijagran.com/agripedia/prediction-of-upcoming-monsoon-its-impact-on-kharif-crops-in-karnataka-telangana-odisha-haryana-other-states/
7. Maharashtra has seen the highest production of foods in a drought year (2018-19, at 73% rainfall), almost matching 2012 (90% rainfall). CM Maha mentions Jal Yukt Shivar, a flagship scheme for desilting streams, building or restoring farm ponds, etc with an emphasis on replenishing ground water. Besides, Maha was helped by completion of many long-pending irrigation projects, and relief supplies by water tankers & fodder parks. Rainwater harvesting at 13,300 sites is planned for cities like Mumbai, Navi Mumbai, Thane, Pune & surrounds and Nagpur. Marathwada Water Grid, a Rs 15,000 cr drought-proofing project is planned for Marathwada region, comprising 8 districts and 6.5m hectares. An integrated piped water supply grid will be built that secures dam water from outside the region and gives drinking water to 1.87cr people and industries. It is backed by Israeli know-how & technologies.
https://citykatta.com/marathwada-water-grid-feasibility-report-and-scope-of-work/
8a. Irrigation status till 2016 in Telangana
Telegana has 4.96m Ha of agricultural land. Irrigated area has varied due to drought years, from 1.7m to 2.3m Ha between 2014 to 2016. On paper, 1/5th of land was supported by ~6 major and ~30 minor and medium irrigation projects. In practice, 75-84% of irrigation was done by borewell irrigation, and only 10% of arable land was irrigated by canal irrigation Agriculture in Telangana. Reliance on borewell has risen over the last few decades because of lack of proper irrigation projects and canals, due to incomplete projects. For example, ayacut for Nizamsagar project was supposed to be 9 lakh acres but only 5 lakh was getting water. One aim of Jalayagnam, for completing long-pending projects starting 2017, is to provide irrigation to the entire ayacut.
https://timesofindia.indiatimes.com/city/hyderabad/Only-20-lakh-acres-get-irrigation-in-Telengana/articleshow/53866223.cms
8b. Irrigation projects of Telangana and timelines
https://telanganatoday.com/changing-the-face-of-irrigation-in-telangana
Telagana govt was able to secure rights over Godavari and Krishna rivers (1,250 TMC incl 150 TMC flood water), conducted in-depth studies and formed plans to irrigate 10m acres. It redesigned project to take account of the massive withdrawals from upstream barrages being built by Maharashtra. As a result, Kaleshwaram Lift irrigation scheme was given to N. Telangana and Palumuru Lift irrigation scheme to S. Telangana. Overall, govt commenced 23 major and 13 medium projects on a mission mode.
In a major breakthrough with Maharashtra on Aug 2016, Telagana was permitted to build barrages at Medigadda and Chanaka-Korata on River Godavi, and so draw the full share of 950 TMC water. Medigadda agreement paved the way for Kaleshwaram LIS, a massive Rs 80,000cr project that started on May 2016, that would allow 235 TMC to be drawn, for adding 1.82m acres ayacut and stabilising another 1.82m acre ayacut. Sitarama project, Rs 8,000cr for irrigating 0.39m acres in Khamman & beyond, was started in Feb 2016. Bhakta Ramadasu project (Rs 300cr, completed) irrigated 60,000 acre. Also started in 2017, were projects such as Bheema, Nettempad, Kalvakurthi and Koilsagar that could irrigate 450,000 acres and gave 90TMC to ayacut. Palamuru-Rangareddy, costing Rs 35,000cr is on fast track for completion. It would irrigate 1.25m acres and provide drinking water to Hyderabad. Mission Kakatiya is a collection of minor irrigation projects, involving restoration of 46,000 tanks and lakes. So far, 20,000 lakes have been rehabilitated, adding 0.19m acres of irrigation. It has potential to irrigate 1m acres.
9. Water crisis, usefulness of inter-linking and Jal Shakti mission
https://www.healthissuesindia.com/2019/06/11/water-crisis-jan-shakti/
June 15th, 2019