The Aakhya Weekly #37 | Ice, Ice, EV.
The Aakhya Weekly #37 | Ice, Ice, EV.
In Focus: EVs pave the way to zero emissions
The role of transport decarbonisation in global climate action is gaining attention, as governments around the world are implementing supportive policies to phase out Internal Combustion Engines (ICEs) and push for Zero Emission Vehicles (ZEVs). With several countries, including India, committing to achieve net zero emissions before or by 2070, transitioning the transport sector to zero-emission technologies is now inevitable as this is the fastest-growing sector in terms of energy use. More than 66 country governments have national or regional ICE phase-out targets, and more than 200 stakeholders, including India, have joined the world’s largest transport coalition – Accelerating to Zero – where they have committed to ensuring that all sales of new cars and vans are zero emission globally by 2040. India has made notable progress toward accelerating electric mobility in the country.
Having come a long way from the initial National Electric Mobility Mission Plan launched in 2013, India now intends to grow its EV sales to capture the markets of 30% of private cars, 70% of commercial vehicles, and 80% of two and three-wheelers by 2030. The country's road transport sector is responsible for around 10% of greenhouse gas emissions, making it a crucial area for reducing its carbon footprint. Focusing on introducing EVs as a key strategy, the government has introduced various initiatives, incentives, and policies for this at the central and state levels. Presently extending till March 2024, the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme is perhaps the most significant out of all and has been quite the game-changer for the EV market in India. It had led to a huge increase in the adoption of electric vehicles, with sales increasing from just 450 units in 2011 to over 7,50,000 units in 2020. Additionally, 26 Indian states have released electric vehicle policies that have a more systematic approach to increase the manufacturing of EVs and their components and improve charging infrastructure in the respective states.
Given the current rate of growth, EVs are expected to grow more and more popular in India in the coming few years. While this does sound like a huge win, it is not without its flaws. As a country heavily reliant on coal-based electricity, our electricity grid is one of the dirtiest in the world. Moreover, there are dire environmental impacts associated with the production of lithium-ion batteries that run electric vehicles. Excessive carbon emissions, pollution from lithium extraction, and ethical concerns plague its manufacturing process, taking away from the idea of EVs being the ultimate one-stop solution. There are several other hurdles that the EV sector in India is facing. One of the biggest challenges is the high uptake cost of EVs, which remains a barrier for many consumers. There is a big difference in the initial price point between EVs and traditional petrol and diesel vehicles due to an established second-hand market and rent-lease models in place for the latter. Another challenge is the lack of adequate charging infrastructure, particularly in rural areas which call for more investment in charging infrastructure to ensure that EVs are a viable option for consumers across the country.
Perhaps it is time to take a step back and look at regions that are faring better than us in this aspect. The European Union, for instance, has set strict emissions standards for automakers, which require them to reduce the average carbon emissions of their fleets. This has encouraged automakers to produce more EVs and has led to a wider range of EV models being available in the market. China, on the other hand, has introduced a quota system for EVs, which requires car manufacturers to produce a certain percentage of EVs each year.
A shift to renewables-backed electricity, comprehensive financing options for EVs, improvement in charging infrastructure, and stricter targets for adoption are just measures that demand urgent attention at the moment. There is undoubtedly a long way to go when it comes to 100% electrification of transport in India. However, it is important to remember that EVs will only get greener with time. In the meantime, we can set our eyes on the much anticipated and upcoming release of the Battery Swapping Policy by NITI Aayog. The draft policy can be accessed here.
Top Stories of the Week
Supreme Court sets procedure for appointment of Election Commissioners
In a significant judgement, a constitutional bench of the Supreme Court unanimously did away with the current system of appointment of Election Commissioners - creating, in its place, a high power committee for the purpose. The judgement came in the matter of a batch of public interest petitions that challenged the manner of appointment of the Chief Election Commissioner (CEC) and other Election Commissioners (ECs).
Article 324 of the Constitution provides that the President shall appoint the CEC and other ECs, if any, until the Parliament evolves a procedure for the same. Thus far, however, no detailed procedure has been created under which such appointments are made. A default procedure has thus been followed, where the CEC and other ECs are appointed by the executive, under the seal of the President. This, the court feared, could create a pliant election machinery that is susceptible to the influence of the executive.
In the interim, the Supreme Court has directed that the CEC and ECs shall be appointed by a committee that comprises (a) the Prime Minister, (b) the Leader of Opposition, or the leader of the largest opposition party, and (c) the Chief Justice of India. This arrangement shall stay in place until a law is made by the Parliament, defining the manner of appointment of the CEC and ECs.
India pushes for co-ordinated action on cryptos at G20 meet
Finance chiefs of the G20 Group under India’s leadership wrapped up two days of talks in Bengaluru this week. One of the key topics raised at the meet was that of cryptocurrencies or virtual digital assets (VDAs), for which India’s Finance Ministry reportedly held a seminar for the participating delegates. The title of the seminar was “Policy Perspectives: Debating the Road to Policy Consensus on Crypto Assets”. In this seminar, two crucial issues (amongst others) were raised for consideration: (a) the need for consensus on classification of VDAs; and (b) the costs and benefits associated with VDAs. The purpose of the seminar was to initiate a co-ordinated dialogue about the nature and purpose of VDAs between policymakers of the G20 nations. The Government of India has expressed the opinion that VDA regulation must be pursued through global cooperation.
The International Monetary Fund (IMF) also presented a discussion paper at the seminar on the structure of the VDA financial system and the impact of VDAs on the financial stability of a nation’s economy. Delegates from several countries expressed concerns about the unregulated environment in which VDAs operate. The United States has also expressed support for regulation, but clarified that it is not recommending an outright ban of VDAs. Lastly, India proposed that the IMF and the Financial Stability Board (FSB) present a joint technical paper synthesising the macroeconomic and regulatory perspectives of crypto-assets.
This Week in Policy
Economy and Taxation
The growth of India’s GDP stalled to 4.4% in the quarter of October-December 2022, slowing from 6.3% in the preceding quarter. Private consumption declined in the quarter, manufacturing shrank and government investment slowed, resulting in the decline.
India’s manufacturing PMI for the month of February was 55.3 - the lowest figure in four months, but one that still indicates an expansion in the future.
Production in the eight industries that comprise the “core sector” grew by 7.8% year on year in January, according to data released by the industry department. While this growth is partly attributable to a low base, it also rests on all-round growth in seven of the eight core industries.
Labour
India’s annual unemployment rate for the year 2021-22, as per data from the Periodic Labour Force Survey, was 4.1% - reportedly the lowest figure since the survey was started in 2018. Notably, this improvement comes despite the country’s labour pool being larger than it was before the pandemic. For the December 2022 quarter, the survey found an urban unemployment rate of 7.2% - the same as the preceding quarter. Meanwhile, as per CMIE data, India’s unemployment rate for the month of February rose to 7.45%, from 7.14% in January.
Karnataka has passed a bill amending the Factories Act, 1948, inasmuch as it applies to the state, in order to extend the daily cap on work timings to 12 hours. The weekly cap, however, remains set at 48 hours, thereby creating the possibility that industrial establishments may offer four day work weeks.
The Comptroller and Auditor General of India has been selected as the external auditor to the International Labour Organisation.
Agriculture and FMCG
Govt plans ten ‘clean plant centres’ to boost fruit crop production as part of the Atmanirbhar Clean Plant Program’ announced in the budget 2023-24 to meet recent rising demand for foreign planting materials of fruits like apple, avocado and blueberry.
Central government disburses cash worth ₹16,800 crore to nearly 80 million farmers under the PM-KISAN income-transfer scheme. Through the program, the government provides income support of ₹6,000 a year to farmers with a valid enrolment.
Healthcare
The Centre has formed a committee under the Secretary of the Pharmaceuticals department, tasked with creating a framework for healthcare regulation in India. The committee will be required to share a roadmap, in this regard, in one month.
Foreign affairs
External Affairs Minister S Jaishankar will chair two sessions of the G20 Foreign Ministries’ meeting under India’s G20 presidency at New Delhi this week.
The Ministry of External Affairs has announced that Italian Prime Minister Giorgia Meloni will be the chief guest and keynote speaker at the 8th Raisina Dialogue.
Technology, Media and Telecommunications
Amidst rising complaints about call drops and other service issues, TRAI has directed mobile and landline operators to submit quarterly reports of quality of service (QoS) data from the ongoing Jan-March quarter onwards.
MeitY, on 28 February, launched the Grievance Appellate Committee (GAC) portal under the Information Technology Rules, 2021, to allow people to escalate complaints made to social media for content takedown.
International trade and commerce
UK Trade and Industry Secretary Kemi Badenoch has said that Britain is pursuing a “great” trade deal with India to reduce tariffs to facilitate access by British businesses to India’s fast-growing economy, and to open up opportunities for India’s services sector in Britain.
After a successful launch of cross-border connectivity for digital payments in Singapore, India plans to offer the Unified Payments Interface (UPI) to Indonesia, Mauritius, and the UAE.
Banking, Finance and Insurance
Amid concerns about misuse of Beyond-30, SEBI to scrap the framework allowing mutual funds to charge up to 30 basis points over and above the total expense ratio (TER) on assets garnered from mobilising assets from smaller centres.
SEBI proposes to re-introduce “hard underwriting” to boost India’s moribund initial public offering (IPO) markets. According to the proposal, if an IPO fails to garner full subscription, the investment banker or a third-party can buy the unsubscribed shares.
Manufacturing
India's manufacturing sector expanded at the slowest pace in four months in February, dropping to 55.3 from 55.4 in January.
India requires investments worth ₹33,750 crore to achieve the government’s production-linked incentive (PLI) target of setting up 50 gigawatt hour (GWh) of lithium-ion cell and battery manufacturing plants.
Retail and e-commerce
The government’s tech piloting agency is finalising details for a mega commercial pilot project, which is looking at inviting 16 e-commerce players (individual companies or consortiums) across various locations in the country to offer drones-as-a-service in a public-private partnership (PPP) mode for a tenure of 12 months.
Owing to a rise in the prices of various food items, retail inflation for industrial workers rose to 6.16 per cent in January from 5.50 per cent in December.
Logistics and Infrastructure
Indian Railways set out to spend ₹2.6 lakh crore worth of capital investment in the next financial year. Around ₹32,000 crore will be spent on new lines, a similar amount on doubling of existing lines, ₹13,000 crore worth on “customer amenities” works and over ₹4,000 crore worth on new signalling assets feature.
Ministry of Road Transport & Highways is set to move a cabinet note for the second phase of India’s ambitious Bharatamala project to build over 5,000 km of expressways and highways at the cost of almost ₹3 trillion.
Sustainability and Energy
Government approves a 2.8 GW capacity hydropower project - India’s largest - in Arunachal Pradesh. The 279-meter-tall dam, is expected to take nine years to build at the cost of Rs.1600 crore.
Ministry of Heavy Industries enlists public sector non-banking finance company IFCI Ltd. to help streamline its Rs.10,000 crore FAME-II subsidy to promote electric vehicles.
Tracking the G20
Last week, the Finance Ministers’ meet in Bengaluru ended without consensus on a joint statement - releasing a “summary statement” instead. The reason - Ukraine, the problem child in India’s projection of “one world, one family, one future”.
The G20 Foreign Ministers meet, taking place in Delhi from March 1-2, is one of the largest gatherings under India’s presidency. Forty delegations are participating in the meet, including all of the G7 as well as Russia and China. This has put India’s choice to stay non-aligned, while vehemently condemning the war, at the forefront. India is now in a unique position to drive consensus on the geopolitical issue afflicting the globe, contingent on how the war plays out over the course of this year.
Over the course of the meet, both the Russian Foreign Minister, Sergey Lavrov, and US Secretary of State, Anthony Blinken, held bilateral meetings with India’s Minister for External Affairs, S. Jaishankar, with the Russian being one of the first dignatories to arrive. Along expected lines, the EU foreign affairs chief Josep Borrell delivered a “strong message” on Russia’s “blatant violations of international law”, while Russia sought to shed light on “causes and masterminds’’ of “real problems” in global politics. It put forward an “unbiased picture” of the Nord Stream pipeline explosions - deeming them as “terrorist attacks”.
On a lighter note, away from the international political mudslinging - did you know why the person in charge of the G20 presidency is called the “sherpa”? It’s because it is a summit. Yes, now you know.
Also, check this succinct overview of the Ukraine issue in India’s G20 presidency here.
Upcoming Events
Global Industrial Relations Summit
March 17-18 | FICCI Federation House, New Delhi
The All India Organisation of Employers (AIOE) in collaboration with FICCI and International Labour Organisation, is organizing the 1st Global Industrial Relations Summit on March 17-18, 2023 at FICCI, Federation House, New Delhi. The summit will include panel discussions, plenary talks, fireside chats and presentations. An array of Indian and Global overseas speakers from government, industry - public private sector, academia, and international organisations will be participating in the summit. More Information
DX Summit
March 15-17 | ITC Maurya, New Delhi
CII is hosting the 4th edition of the DX Summit on March 15-17, 2023 at the ITC Maurya, New Delhi. The theme of this edition is “India’s leadership in a Global Hyperconnected Ecosystem”. The summit, part of a series of events organised by the B20 engagement group, coincides with the B20 task force meeting, providing an invaluable opportunity for business meetings and networking. More Information
Convergence India Expo
March 27-29 | Pragati Maidan, New Delhi
The Exhibitions India Group is organising the 30th Convergence India Expo on March 27-29, 2023 at Pragati Maidan, New Delhi. The theme of this edition is showcasing India’s leadership in a global hyperconnected ecosystem. As India’s largest technology and infrastructure event, it showcases breakthrough technologies, innovations, trends & best practices through four co-located expos - IoT India, Embedded Tech India, Mobile India, Fintech India & Digital Gaming India. More Information | Registration Link
A Few Good Reads
Parameswaran Iyer and V. Anantha Nageswaran highlight the issues with data collection, and note the role of the National Data and Analytics Platform in tackling these issues.
Why are teenagers more depressed than ever before? It might be all the smartphones, believes Eric Levitz. Noah Smith concurs.
ChinaTalk’s Jordan Schneider interviews CIA veteran Dennis Wilder on China’s ties with Russia, the personal relationship between Xi Jinping and Vladimir Putin, and the possibility that a new Cold War has already broken out.
The Economist explores how Starlink has powered Ukraine’s defiant resistance in the Russia-Ukraine war, and why it may well define the future of war.
Are the new chatbots sentient, or are they just fancy autocorrect? Can we reign in AGI? How do we keep away the apocalypse? Erik Hoel answers (or, well, attempts to answer) these questions and more.
Tweets of the Week
Vivek Kaul spells out the reality of what a GDP growth rate of 4.4% implies in this thread:
William Eden, in an incredible long thread, gives a contrarian take on why artificial intelligence is less of a threat than is estimated:
Offered without comment:
