Tuesday, October 25, 2011

You want numbers...here they are!!

This is one of the blogs that I wrote just after completing my MBA and never published it..Another example of how so much numbers make any article un-interesting..here is the one about my favorite topic..Power sector in India. The numbers are very interesting for any one concerned about the sector!

Power sector reforms started off in 1991. But during the eighth 5 year plan the target for the power sector is scaled down from 48000 MW to 20,729 MW on the ground of resource constraints. And the actual became only 16,422 MW.

The amendments are done to the existing Acts and Rules to woo the private and foreign companies to invest in this sector. The private companies are provided a 16% assured rate of return on their equity and a 0.7 % additional return for every 1% increase in the plant load factor over the 68.5% level. Foreign equity return will be in foreign currency and will be completely protected against foreign exchange rate fluctuations. Other concessions include an enhanced rate of depreciation at 7.5% and a tax holiday.

The installed capacity of generation at the time of independence is 1370 MW and it is 97,846 MW by 31 marr 2000. The percentage shares of different sources of energy:
Hydro power - 24%, Thermal power - 72%, , Nuclear power - 3%, wind power - 1%.

The two major problems associated with Thermal power plants were:
1) Low level of capacity utilization
2) High transmission and distribution laws between 21-26%.

Though the statutory obligation says that the SEBs are required to earn a minimum eturn of not less than 3% on their fixed assets after fully meeting the fixed and operating costs, intereste and tax liabilities no governments seem to bother about it.

The center for Monitoring of Indian Economy has estimated that 12-15% T&;D losses are acceptable. The eighth five year plan targeted to bring down T&D losses by 5%. In some states the T&D losses are around 30-50%

To have an assessment of the financialloss caused by power theft, an illustrative example will be quite illuminating. For the year 1999-2000, it has been estimated that gross energy generation by the utilites was 480.7 billion units. Taking the planning commission's estimates of auziliary confumption as 10.15%, energy available for sale was 431.89 billion units, and estimated T&D losses 22 %. As has been stated, in Indian conditions T&D losses should not be more than 15%.. A reduction in the loss by 7% would have saved 30.23 billion units sold at Rs 2.076 per unit and this would have generated Rs 6,726 crore in the year which would have been enough to install about 2000 MW of additional generating capacity.

Most of the detailed mentioned here are correct. The sector right now has more problems than it every had. I can continue to write a small book on the power sector woes,and probably a few paragraphs on potential solutions. I hope you had enough of the numbers! Will probably look at different topic to speak about numbers the next time :)

Friday, October 21, 2011

Cultural Begging!!

I didn't know how to coin the term for this...you can help me with the right term after reading the blog

During my childhood when high rise apartments weren't the norm and urbanization wasn't in vogue, lot of people would come across your street, perform and ask for alms..more than alms I'd say they were seeking money for the appreciation of their art.
Some one would play a shehnai, some one would make a bull perform dance (referred to as gangireddu melam) or there would be small drama etc.. At the end of all these acts people would contribute what ever amount they can, and the performers in turn would bless whoever has turned up. 
In many cases, these performers themselves were considered divine and hence people would throng to see and give whatever they can. This helped many of these artists to survive and flourish in a few instances. They also brought the culture and folklore into limelight and ensured that traditional music thrived.
But of late, how many times have we seen people performing these arts on the streets. And how many times have you seen them being allowed to perform. Nowadays we want our privacy in our apartments, scared of security issues, these small artists are not even allowed to perform. So, they are forced to perform within the rural areas, where due to lack of demand, slowly the art itself is losing its charm.
Many arts like this have lost their shine and have almost become extinct (Tholubommalaata is an art form which is almost extinct. It is also termed as puppetry). Especially during festivals many of these arts and performances would be the limelight of the celebrations. 
Can you imagine seeing any of these guys across our streets during normal days or during festivals. You can probably find some of these artists as a separate event in some cultural festival, or by some great performer in some art theater.
None of the smaller and unknown artists have a place to showcase their art and earn income even a pettance!
No wonder most of these artists have given up on their art and are becoming labor in major metros. 
With exposure to internet and global connectivity we have access to entertainment across the world, and hence these small artists do not matter to us. And let me not get going about cultural alienation!
I have no answers about how to solve this issue..probably more shows, more melas or more whatever..just to ensure that these artists retain their skills and also earn decent income.
I do not have statistics to speak about the number of artists who have left their skills. Atleast in case of puppetry I know that there are no longer any of those shows happening in the state of Andhra Pradesh, India where earlier there used to be hundreds of artists relying on the same.
The only traditions which seem to still gather lot of attention of masses are the ones which have migrated towards soft porn or vulgarity. For example theatre in Rural Andhra pradesh or in rural Uttar Pradesh flourishes more as a show of nudity!!
All that I can say is, the next time any of these artists appear, lets atleast listen/watch their performances for few minutes and appreciate them with whatever we can. May be that will encourage to perform the arts at-least as a part time activity!!

PS: If you can tell me the right name for this article, Iam more than willing to change the title.

Saturday, October 15, 2011

Badness of roadology!!

Did you know that there is a term called as roadology, which means the study of the impact of roads on the areas through which it passes!!
Anyways, the article is about "what should be the optimum amount of badness of the road to have a better impact on the society"
Did you ever wonder, what is the good thing about Indian roads. They are bad and filled with pot holes in most cases, and hence what good they can offer.
On the contrary, I'd say the roads are good because they are bad!!
While I understand how a good road helps in commercial transformation of the society, I somehow think that bad roads will do more justice to India than good roads.
I am actually referring to the interior roads and not the highways. The potential benefits to be accrued due to bad roads are:

  • A bad road would mean that the vehicles travelling on that road will get depreciated faster, making people purchase a car earlier. 
  • Because of bad road, the traffic slows leading to the potential for street vendors to do some small business ( Idea of my friend)
  • Bad roads will actually increase my health problems, thereby more business for the hospitals. You may say that the productivity of the candidate is hampered (we anyways are under utilizing our potential, so it would not create a major decrease in productivity of the person)
  • Bad roads will ask for more investment on insurance leading to more insurance companies coming in.
  • More time spent on the roads will make sure that people are listening to radio leading to more advertisement options.
  • Due to bad roads people will prefer public transport leading to increase in overall efficiency and energy optimization.
All the above factors directly contribute to the GDP growth rate.
Hence bad roads actually help GDP growth. I am not suggesting then that all the roads should be dug out and made worse. Good roads obviously will be appreciated and worse roads hated. Hence an optimum amount of badness is always good for the society.

Keeping all these in mind, I actually suggest the usage of a metric (roadofactor), which is the optimum badness that a roadness can retain in order to ensure benefit to GDP. It can be the function of the no. of potholes in an unit area of the road, depth of those pot holes and the frequency of re-occurrence of those potholes. 

From next time onwards, the roadofactor should become a metric for awarding road contracts. Anyways the contractors are making bad roads. Why not dis-incentivize them by saying that, we want bad roads and hence you will not be able to get any money out of it.

The best practices of Indian contractors in developing bad roads can be extended to the likes of China who is developing express highways in a frenzy. Lets tell me how to ensure bad roads in the fastest time!!

Saturday, October 08, 2011

I'd rather prefer Sarah Palin run my nation.

I was going through the Europe debt crisis and came across the topic that "investors are scared" so many times and then I wondered who are these investors and how many are these investors who seem to determine the fate of the world economy. Effectively these select group of people are determining the fate of 6 billion people.
If Gini index were to be made for the influence of people, then I am sure it would be almost close to zero...

But, for dumb heads like me, who are these investors whose opinion seem to fluctuate every day. One day the sensex rises on the hope that the Greece debt bail out talks are holding up, and the second day they are scared to the extent that they dump all their shares. Is it so simple that the world economy takes a U-turn every second day?

If I look back, the topic of recession appears because either the Dowzone index crashed or a group of investors think that something tragic is going to happen the very next moment. So, I was trying to identify these people who influence our major livelihood. Also how good are these investors? If their investments are prone to sentiments than fundamentals (yeah, see even I start using the financial geeky terms like fundamentals ..), then what good are these professionally qualified investors?

Why should some one change their whole perception towards something every alternate day. Why can't we continue to remain bullish or bearish for some time. Let us say , Germany has delayed the decision by a day whether to extend the loan to Greece. How would this decision change the whole paradigm about Greece in a single day. 

These few thousands people from the nukkads and gallis of the wall with an MBA and a stat degree have decided the fate of the earth as a whole. So these bunch of people who are depressed due to the constant pressure of trying to make money every second seemingly decide how should a country be run. 

Considering the might and the weakness in their ever fluctuating thought process patterns, I'd rather prefer Sarah Palin to run my nation, than these people deciding how I should behave. While they think that the Obama's and the Putin's of the world are ill qualified to do their job I believe these folks are worse than the Gaddafi's and the Assad's.