Industrial Automation Magazine India

Need to shift power generation to non-conventional sources

Published on : Thursday 02-04-2020

Deepanjan Dhar, Techno-Commercial Manager, Oasis Elevators/Consultant, Dayal Construction Pvt Ltd.
How do you assess the current state of Indian industry in terms of modernisation?

When we talk about the modernisation of Indian industries, we don’t only talk about the in- house status of machinery nor the facilities inside the factory or plant, but also about the whole infrastructure that is peripheral to the manufacturing-supplying-consuming cycle. In this regard, it can be said that a lot depends on the logistics support, proper roads, proper waterways, apt skillset by workers and technicians, adequate power and water supply, rigid governance, properly regulated market and properly formulated industrial rules.

What could be the reasons for the slow pace of modernisation of industry in general despite the availability of technology?
The main reasons for the slow pace of modernisation of industry despite having technology at disposal are:
a. Lack of knowledge.
b. Lack of proper skilled workers to implement and operate.
c. Lack of proper infrastructure like logistics support, power supply, and government and trade policies.
d. Lack of rigid governance.
e. More dependence on Imports.
f. Less scope and room for introducing new technology in existing system due to real-time complications.

The automotive industry is a good example but the success is not replicated in, say textiles, where exports are not in line with the potential?
The following points, according to the Northern India Textile Mills Association, may have the answer to this:

• The exports are not in line compared to the input for textile industry due to State and Central level export taxes and high rate of interests. Adding salt to the wound is, the cost of raw materials which are quite costlier compared to the other global competitors.

• Absence of synthetic apparels due to weak weaving and processing units which are small, informal units lacking expertise, scale and technology and suffers from power outages and reduced capacity that doubles the cost.

• Also, cheaper imports from Bangladesh and Srilanka play an important factor in this regard. From April to June in the year 2018 the export was $1063 million and in the same time in 2019 it was $696 million.

• The Indian exporters fails to meet the demand of the fast fashion industry in terms of fashion and Standard Allowed Minute (SAM).

At the moment the renewable energy segment in India is growing, but so is the demand. What should be the ideal energy mix?
Given the limited availability of coal and the extensive carbon emissions from thermal power plants, India will need to shift its power generation capacity towards non-conventional sources. The ideal mix of energy should be solar, bio-mass, bio-pellet, geo-thermal energy in warm regions and for cold regions it should be hydro-power and biomass and bio-pellets. For coastal areas Wind energy, OTEC, Tidal energy, Ocean energy and Wave energy can be used.

What more can the government do to boost manufacturing in India with the vision for a USD 5 trillion economy by 2025?
Apart from framing policies, defining the parameters and setting up of infrastructure the government can boost the implementation procedure of ease of doing business and starting a business on real-time basis rather than frame working on basis of an ideal situation.
The government can do the following things:

• Value added Manufacturing – Focus more on low to high tech industries because they are in bulk and would contribute hugely in attaining the target.

• Developing capabilities essential for high tech industries.

• Invest more in R&D (1.2% of GDP) and take a sophisticated approach towards manufacturing.

• Having a thorough plan and seasonal arrangements for manufacturing based on a coherent strategy.

• Encourage private participation in power generation, transmission and distribution.

• Strengthen macro-economic framework.

• India needs to sufficiently invest to absorb the labour productively and also ensure that the labour force is suitably skilled and educated to be employable. The complete benefit of this demographic dividend would be realised only if the young population is healthy, educated and employed.

• Controlling inflation.

• Indian agriculture is yet to become completely insulated from large fluctuations in rainfall. The impact of deficient monsoon on crops production would become more severe in the absence of proactive policy measures. Mitigating the potential adverse impact of monsoons shocks on food availability and prices. Irrigation is the key to the removal of Indian agriculture’s dependence on the monsoons. The actual net irrigated area in the country is 66.10 million hectares, which is only 47% of the net sown area.

• Better management of fiscal policies, improved governance, revival in investment and industrial growth and generating confidence among investors - both domestic and international.

• Environmental pollution, degradation of natural resources and inadequate environmental services, such as improved water supply and sanitation, impose costs to society in the form of ill health, lost income, and increased poverty and vulnerability. India is already feeling the heat of global warming and the effects of emissions and environmental abuse is already quite apparent across India. As per a World Bank study, the annual cost of environmental degradation in India amounts to about $80 billion equivalent to 5.7% of GDP. Failure to devise strategies to reduce environmental degradation could seriously constrain long-term productivity and undermine the very foundations of growth.

• Escalation of geopolitical tensions, impact of supply side constraints and tightening of financial conditions in the emerging markets could continue to place restraints to the recovery in growth, which can be neutralised by intra-country manufacturing-supplying-consuming cycle.

Is sustainable development a difficult goal to achieve for a growing economy like India?
Yes, sustainable growth is difficult in a country like India where illiteracy, superstition and ill practices run rampant. The basic sense of sustainability comes from the basic working knowledge of the environment and its peripherals. If one is ignorant and unaware about it then how would the sustainability thought conjure in one’s mind!!

Also, people are self-centric and use unscrupulous methods for their mere profit. So, to really settle the idea of Sustainability and impart it amongst the masses a lot of hard work has to be done. Given the environmental-sustainability challenges affecting so many parts of the world today, a development approach that relies heavily on extraction and use of natural resources may be untenable. India must therefore embrace nonlinear growth solutions – those that leverage technological or business-model revolutions. Happily, some Indian companies have already pioneered this approach.

(The views expressed in interviews are personal, not necessarily of the organisations represented)
Deepanjan Dhar is Techno-commercial Manager at Oasis Elevators/Consultant at Dayal Construction Pvt Ltd. Dhar would like to dedicate his responses to Mr Deepak Ranjan Dhar, Professor Smarajit Mitra, Doctor Hiranmoy Mondal and Mr Sammoujwaal Dasgupta.

Annexure
Pool of Skilled Workers
Factors like skilled workers are very much promising driver for India as the country has 749 million working age population, which constitutes for 62.66% of the current Indian population, which indicates that given the proper skill training Indian industries can have a very strong base of operations along with support services and ancillary services. It is being estimated that by 2022, 402 million Indian youth will be in the workforce, according to Indian Labour Report.

The skill training would be imparted by the Skill India campaign. The Government has launched four landmark initiatives that aims to train over 40 crore people in India in different skills by 2022. The initiatives include National Skill Development Mission, National Policy for Skill Development and Entrepreneurship 2015, Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme and the Skill Loan scheme. The technical skill gap analysis of the Indian
Skilled workforce in respective verticals are stated below:
a) Infrastructure - 103.2 Million.
b) Auto and Auto Components - 35.0 Million.
c) Building and Construction - 33.0 Million.
d) Textiles and Clothing - 26.2 Million.
e) Transportation and logistics - 17.7 Million
f) Organised Retail - 17.3 Million.
g) Real Estate Services - 14.0 Million.
h) Health Care - 12.7 Million.

Investment and Infrastructure

• The relationship between Infrastructure and Investment is the major external factor that is affecting the modernisation initiative taken by any industry.

• The investment inflow is negatively affected by poor project management practices, financing and regulation.

• Sustained investment in infrastructure is very important in modernisation of industries as it ensures proper flow of investment.

• The execution of planned infrastructure in a timely and high-quality manner ensures proper modernisation which is at par with the global level.

• The Government strategy to increase investment in infrastructure through a combination of public investment and public private partnership indicates an increased thrust on the sector.

• The Government has also emphasized the need for stepping up the scale and scope of private investment in infrastructure by allowing 100% FDI in some areas of railway infrastructure and by easing of FDI rules in construction.

• Development of smart cities and the AMRUT scheme is likely to bridge the gap in infrastructure development in the country.

• Given the renewed emphasis on infrastructure sector by boosting infrastructure financing coupled with initiatives to enhance physical infrastructure such as roads, railways, urban infrastructure, the investment in physical infrastructure is expected to increase sharply.

• According to surveyed estimates, physical infrastructure investment is expected to surge to 10.4% of GDP by FY25 from around 7.5% (E) of GDP in FY15.

• Resolution of policy bottlenecks such as land acquisition and improvement in demand conditions would also stoke private infrastructure investment.

Technical Issues and Current Scenario
One of the major technical issues in the way of modernisation of Indian Industries is that either there is no viable and feasible scope of introducing advanced technology or people are not aware of it.

Organised Agriculture

• India is an agrarian country.

• Stepping up mechanisation in farming has significantly improved crop yields.

• IT-led solutions like Reuter’s Market Light and TCS’s mKrishi are examples.

• These education and advisory services, available through mobile apps, help farmers make informed decisions and have been implemented in more than 17 states across India. Also Block Chain Technology and IOT integrated with automation and instrumentation have paved its way in to Organised Agriculture.

• India’s agricultural sector has shifted towards data-driven precision farming—which uses sensors, imagery, and other technologies to generate information for farmers about weather, soil content, fertiliser, and pesticide levels.

• Farmers use the information to fine-tune their techniques as well as optimise resources and improve the quality and quantity of crops.

• Yet only 2.5m of India’s 120m farmers practise precision farming, largely in the form of drip irrigation.

• Enabling more farmers to use such practices could help India reach its agricultural productivity targets. Similarly, partnerships between complementary input players—such asfertiliser, pesticide, and seed companies—will strengthen the agricultural supply chain. That could reduce costs of inputs for farmers and give them easier access to inputs, all of which translates into better performance on agricultural yield

• Strengthened research in fields such as biotechnology, especially genetically modified (GM) seeds, has improved crop yield and resistance to pests and drought. India thus needs to invest in research on the use of GM seeds in food crops to make them as successful as Bt cotton has become in India. The sector has developed an integrated digital platform comprising pre- and post-harvest modules. This has created a marketplace in which players across the value chain can interact with one another.

It provides input players with opportunities to scale and to increase their market access while enhancing the transparency of transactions, which lets farmers buy and sell at the best possible prices. The agricultural sector offers a rich array of opportunities for private sector companies to help India achieve its agricultural yield targets. Such companies come from sectors ranging from IT, retail, and biotechnology to fertilisers and farm-equipment manufacturing.

Metal and Mining

• Current Survey states mining GVA to grow annually at an average 7.1% during FY16-FY20 and accelerate to 10.0% in the following five years (FY21-FY25). India’s mining sector contribution to GDP is low compared to major mining countries such as China, US, Australia, Brazil and Chile. Further, in recent years India’s mining sector has grown at a much slower rate as compared to other mining economies.

• Low level of investments in R&D remains another area of concern for the steel sector. Even in large steel companies, investments in R&D vary in the range of 0.15-0.30% of their turnover, as against 1-2% in leading overseas steel companies.

• The Government of India has recently enacted amendments to Mines and Minerals Act, 1957 and notified rules that would help in overcoming many challenges associated with the minerals and mining sector, such as low-level mineral exploration and exploitation, low technology deployment, fragmented and small concession areas, etc.

• This sector will reap the benefits of increased demand from various user industries, including infrastructure, construction, power, automobiles, industrial machinery and consumer goods, amongst others.

#April 2020 Magazine Cover Story

Transforming the Industry. Experts debate the factors that are holding back the Indian industry in quest of modernisation, and improved productivity. Digital Transformation is the buzzword for industry in the wake of the Fourth Industrial Revolution or Industry 4.0. Like much of India with various States at different stages of development, the Indian industry too is not a uniform entity in terms of modernisation and technology. The automotive industry is perhaps the most automated and leading on the digital transformation front as well, but many other segments, especially the MSME component that forms the largest chunk, are still at various stages of modernisation. To read the full cover story Please click here