Category Archives: Economics

Dharma’s wheel is on the move!

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Sitting in the front verandah watching the springtime flowers grow in the front lawn, I was transported back to my childhood. I reach for the newspapers and read the morning news, as I sip the morning tea and wish that the world had not changed from what it was. The barking of the street dog and the cry of the vegetable seller rose over the wall and we discussed the latest political shenanigans as parties and leaders changed. The people have voted decisively for cleaner government and swept the old ones from power and a new mood is in the air. Corruption is on the run and the corrupt are hard pressed to hide their ill-gotten gains, in the largest democracy in the world.

The new budget lays out the foundation for social security through Insurance and micro lending as the poor and dispossessed have voted for change. The largely agrarian economy has to be transformed into a more urban state and employment on a vast scale is needed along with education and equal opportunity. In a land divided by innumerable castes, languages, dialects, age old customs of acceptance of a status quo, no one has the wisdom to change to a homogenous society. The paths like the Hindu way of life are numerous and the goals dispersed, and yet the nation marches on as one. The miracle is not in the diversity but in the unity of purpose, that the populace has shown.

My greatest condemnation for the Congress who has ruled India for most of the  decades since Independence are best expressed in the following words:

“I believe there are more instances of the abridgment of the rights of the people by the gradual and silent encroachments of those in power than by violent and sudden usurpations.” -James Madison, fourth US president (16 Mar 1751-1836)

The socialist Nehruvian model taken to new heights by his daughter Indira by nationalizing all major sources of finance and economic development had led to the now infamous Hindu rate of growth. The soft state economy where the people were treated as the wards of the state, and licensed and permitted in almost all aspects of commerce and industry drove capital and entrepreneurship out. While the Asian tigers and China roared India whimpered creating the largest population living below the poverty line. The brightest stars of its IITs and AIIMs left in droves for more liberal economies and prospered beyond any ones imagination. The people suffered and voted for change but got none, and it was not till the late liberalization in the 90’s; that some of them returned and paved the way, for a modern India to start to emerge.

Now new doors are being opened and the budget tries to bring sanity to a repressive taxation regime. The new schemes to tame inflation and ready the economy for a growth trajectory are being laid out. It will take decades to undo the damage done, but now an Indian Finance Minister with his friend the new PM bring a uniquely Indian perspective to growth and opportunity. Their delusions of grandeur are ripe for blossoming and the world watches in disbelief as the wheel starts to move. The Ashoka Chakra at the heart of the Indian flag is suddenly starting to turn pushed by the tireless efforts of its new leaders. If you can’t lend a hand then you had better step out of the way, as a new day dawns for a billion people, after a long and lonely night!

PS:  The starting of the wheel of Dharma’s motion, will destroy the stagnation of the Indian economy is my new hope. The new leaders will bring dynamic change, and the way of truth will reign again, bring death to the inertia that governed India. Virtue and compassion should be the governing principal under this national flag and prosperity will surely follow.

Building for tomorrow

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High rise number 432 Park Avenue in NYC will have a total residential real estate value of $ 3.12 Billion. To put it in perspective that would make it more valuable than all the real estate value of major U S cities like Concord, NH, Trenton NJ, Juneau or even fuddy old Yankee Hartford Ct. We have to hand it to the braves or the fools of the current wild west view, that there are enough of the 1% around, to flip these properties. Fortune Magazine reported conservatively in its Dec issue, ‘The High-Rise Goes Nuts’ and for Fortune to talk like this, I had to sit up and listen. NYC, London, Tokyo, Hong Kong and other towers of the rich and famous came to mind, and the economic divide now splits the skyline in all its majesty.

All I wish for is that the much smarter civic action towards building the next smart cities required for human progress could get similar funding. While the billionaires are entitled to their stunning views there is a lot of other infrastructure that could be built with such large pools of money. The point being that there is enough capital to go around and I don’t mean to pick on Park Ave in particular and it is just an example. If capital can be invested into the new infrastructure required for smart cities, it will raise productivity and have its own upwards trajectory, by a corresponding increase of required and essential services.

When billions of people worldwide subsist on one dollar per day, we are a far cry from lifting people out of poverty, much less talk of smart cities. The contrast in prosperity between the top and the bottom can be erased if concrete steps are taken. We have today the means to improve the lives on one of the largest scales in human history. We are talking about the improvement in the lives of billions as compared to the few. The scale of human development in the next century should far outpace anything that we have seen in the last century.

We now have the technology and the knowledge to come up with a greener and more ecofriendly system of co-existence with our co creatures on this planet. When developing smart cities we must also at the same time make arrangements for natural reserves for other species on earth to prosper. The Oceans, Earth and our vulnerable atmosphere must be recognized as such and legislation passed to protect it. We must ensure more renewable energy and natural development while using modern means. The challenge for the leaders of the new millennium is the lack of confidence in the global economy. The US can lead but we need other economic engines to also invest in this new global infrastructure for the greatest good.

If we all rise to the need of the hour, to provide the needs of these billions; it will also ensure, an upward cycle of mobility. The beneficial effects of education, culture and the provisions of modern life for residential populations of these smart cities, will attract more and more populations; as they succeed in eradicating poverty. The internet of everything is coming whether we like it or not, and will need all its trappings. It will be a resource hungry world, and how we manage this supply and usage; will be the lessons learned, in the future. For now we just need the will, to move in the right direction; to build what is needed, for our future generations. Building for tomorrow has to start today!

Deserted Hospitals of Delhi

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India’s health system will need to add 3.6 million hospital beds, 3 million doctors and 6 million nurses over the next 20 years to meet the needs of the growing population, consultants PWC India estimate. Reuters found that officials and health experts blamed a tortuous procurement process, political wrangling and bureaucratic incompetence when they studied the under utilization of funds by most public health care organizations. Fearing corruption charges, officials work in an environment of “procurement phobia” and routine requests are held up for years. Rajiv Gandhi Super Specialty Hospitals has sat for a decade on 13 acres of prime Delhi landscaped land with 650 empty rooms, as X-Ray machines have no operators, and doctors and other equipment will not be procured for many years at the current rate, is one example. The budgets are left unspent for most government hospitals, as ‘it takes ten agencies to clear the laying of the first brick’; or the requests for doctors disappear into a quicksand of bureaucratic bungling.

India records the world’s highest number of deaths during pregnancy and high rates of child mortality from diarrhea, pneumonia and measles. It spends less than 1% of its GDP on Healthcare, putting it in the race to the bottom with Afghanistan and Sierra Leone. The result is either expensive private care, or no care at all for most of its population. It has 1 doctor for 1,400 patients which is less than even neighboring Pakistan, and there is no plan to improve on these statistics, as budgets will continue to be allocated and not spent given the past history.

ASSOCHAM estimated in 2013 that India’s private hospital sector would grow at 20 percent annually and become a $125 billion market by 2017. Today 80% of the care is provided by the private sector and it will continue to grow as the public facilities have neither the vision nor the administrative capabilities to provide efficient care facilities. Mr. Modi may want to improve this critical area for the well being of his people, but the inefficiencies and mind sets of public sector employees do not point to any near term improvements. With the rise of Kejriwal and Modi on anti corruption platforms, I only expect the procurement phobia to increase as any public employee who does his duty, will also be exposed to witch hunts for corruption.

While a lot of good work has been done in India by tackling infectious diseases and increasing longevity of its population, it is a drop in the bucket. We need to change the mindset of the administrators and let the professionals run health care. Whether it is done through public private partnerships or disinvestment of these facilities to let private sector take them over and run them is up to the government. I do not expect anything to change anytime soon in India, as the road to health for the people needing health care; is dependent on the good intentions, of its new leaders. Campaign slogans rarely turn into effective policy, as a dynamic democracy has its own unique challenges.

Innovations come from first ideas

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InnovationLifeCycle.jpg

The figure shows the beneficial effects of innovations. With each successive emerging technology that goes from innovation to diffusion the rate of revenue and return keep increasing. A series of these cycles can lead us into the next millennium for the betterment of all creatures, if we carefully nurture the seeds of these emerging technologies.

“The all items Consumer Price index for the USA increased 0.8 percent over the last 12 months. This is notably lower than the 1.3 percent change for the 12 months ending November. The energy index has declined 10.6 percent over the span. In contrast, the 3.4 percent increase in the food index is its largest 12-month increase since February 2012.” As per the US department that tracks these arcane statistics.
All the facts coming out of the US economy on manufacturing, employment, CPI, GDP growth seem to show signs of a stable environment, in which the markets may be poised to change, into a growth trajectory. With a crumbling infrastructure to take care of the president is promising huge projects. I agree that when a nation’s most memorable engineering works become five decades old, it is time to reenergize and start work on the boldest of the bold new projects now. The Golden Gate and the GW Bridges were great but now we need the next generation of green transport in the form of electric vehicles powered by solar or wind or other non carbon renewables.
New energy, transportation and information grids have to be built just like the old Interstates were built way back when. As cities become smarter they will generate a utopian lifestyle supported by the new information age. Wireless connectivity, driverless cars, efficient lighting and digital security are all developing at a rapid pace to meet this brave new world. Yet these developments need new ideas and thinking and innovators and problem solvers. We are returning thousands of PHDs and graduates every decade due to our immigration policy. The nation’s firms have to set up research centers in these foreign countries where they are returning, taking the jobs and new ideas with them.
Where will the highly skilled labor required for the next millennium come, if we continue to turn away the best and the brightest from our shores. The sign at immigration now reads to the world “Innovators not welcome; we are doing quite well with what we have.” Twelve million workers have disappeared from our employment ranks and millions more of skilled teachers, nurses, doctors, engineers and scientists will retire with the baby boomers. We need to replace these skilled positions with new replacements or our development and way of life will come to an end. With increased productivity fewer workers can support more dependents but there is a limit.
Our public policy must meet the people’s needs even when they cannot see it for themselves. An open society that welcomes new ideas and cultures thrives while a hemmed in society loses touch with the real world. Xenophobia may sound comforting but at the end one must realize that a State has no religion or race, as that would limit its future potential. Ideas and dreams make the future brighter and we must rise to welcome a new dawn.
What our new sign at immigration should read is “Innovator’s welcome, the race has just begun!”

Improving Mental Health

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Let us talk about an issue in Health Care that nobody apparently wants to talk about. It is simply the topic of Mental Health, whether it is at an individual level, a community level, national level or at an international level; the basic problem is that people do not want to talk about it. There is “No Health without Mental Health,” slogan appears very right for our times; for it has been conclusively proven, that people with healthier mental attitudes do better in life. Whether it is at an individual level, where a deep sense of positive energy emerges from those who have positive mental health; resulting in their chasing opportunities, which others may easily overlook.
In 2012 over 43 million American over the age of 18 suffered from some kind of mental disorder. Most of these people remain productive citizens but at a subpar level and mental disorder is the greatest drag on human productivity in modern times. By 2030 it is predicted that 6 trillion of productivity will be lost to chronic non communicable diseases but a major portion of this is going to be caused by mental disorders. WHO estimates 800,000 people commit suicide every year, more than double the rate of murder; and mostly in middle and lower income countries.
Even in wealthy America, most states have dismantled the mental health institutions, that had been set up and now a mental health victim is 10 times more likely to be in prison; than a mental asylum or treatment hospital. The US still has 9 psychiatrists for every 100,000 people and the other countries do much worse and the continent of Africa has 1 for a million people. For people fighting debilitating diseases like HIV and Ebola, and genocidal wars, the trauma can have lasting effects on the people. The active community involvement in working with the women from such ravaged countries pays off in the greatest dividends.
As per Insel, Collins and Hyman writing in Foreign Affairs called Darkness Invisible the scale of this problem will grow with longevity and population growth that is taking place across the world. They point to grassroots studies in Congo and Pakistan where simple community worker’s positive intervention with such women led to measurable positive results. The women for example who received such treatment in Pakistan became not only healthier but were more likely to obtain crucial vaccines for their children, while recovering from posttraumatic stress disorder or prenatal and postpartum depressions.
When I started this blog it was meant for faith and hope. I believe it is a noble cause now to try and raise the millions from out of this shadowy darkness that society imparts on the mentally ill. They deserve better and change is possible. We need to draw them out of the shadows of our existence, and bring them into the light of our everyday life.
My belief is that if we all get together and address this issue, it will make a huge difference in the quality of life, of our future generations. Why should that family member be invisible or incarcerated when he/she can be a productive member of our society. We as a community of compassionate, caring people can lead the way and show each person that life is worthwhile, and worth living to the best of our individual faculties. If we pursue positive actions, we are more likely to achieve positive results. Luckily the medications for treating mental disorders, have grown steadily cheaper, and must be made more accessible. Bill Gates are you listening?
Next time you come across an autistic or dyslexic child, or that crazy adult, or harebrained uncle, pause and admire the world; that they see. Join in their reality, and you will find that there are dimensions to our existence; that we have passed by, unheeded. Just like you do not truly play with a child, till you immerse yourself in its world; and see what he/she, is seeing. To understand what a person is going through, one has to enter their world; and then show them the light of hope, and the path to self-fulfillment and happiness. Only then the imaginary world that the child believes in becomes real, and then you find that you are no longer playing with the child anymore. Instead you are helping another human being understand, this crazy game of life itself!

Cry not my Angel of Death

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http://widehdwalls.com/images/big/angel_of_death-603695.jpg

In my annual review of my financial situation, I also called on my Angel of Death loophole; as he is part of the critical framework, for my lineage to succeed or fail. Currently the tax law allows me to pass on appreciated assets to my heirs without any capital gains tax liability, for our deficit strapped nation. I found my Angel of Death crying and very upset as there may be some changes coming and the capital gains tax loophole would go away, removing his powers. He is upset that the inherent inequalities between the top 1% who love this loophole, is up against the ordinary wage earners; who support Social Security, Medicare and other social programs through direct taxes on their income. Meanwhile the wealthy just avoid this obligation and pass their accumulated and inherited wealth gains, on to their heirs at death, without paying anything in the form of taxes to the state.

So a trust fund baby, say Mr. Slim in my example is automatically enrolled by the Angel of Death loophole into the elite, while an ordinary working class baby say Mr. Fat is left to live paying taxes on every income dollar, he makes in his lifetime. Mr. Slim stands to go to the best private schools and universities and remain above the proverbial glass ceiling, while Mr. Fat is consigned to public schools and maybe a community or state college if lucky, and then work on an hourly wage basis for the rest of his life (not even realizing that there is a glass ceiling). Mr. Slim will hire and fire Mr. Fat based on his inheritance and superior circumstances of birth due to ownership of assets. He will pound the gavel of injustice saying that these working class blokes; should work and study harder, to rise out of their poverty reinforcing circumstances.

I consoled my Angel of Death and requested him not to worry and to hush up, as there is no way that the powerless 99% can overcome the powerful 1%. I said that I and my heirs will continue to pay Capital Gains and Income and other taxes, as we need to sell our assets to live, as we are more Mr. Fat than Mr. Slim. The wealthy will ensure that this Angel never dies, as all kinds of erroneous arguments will be made to protect this tax loophole.

  1. Reduction in capital gains tax improves tax collections and allows productive investment in our economy. I do not see billionaires lining up to pay their fair share and instead see tax and financial consultants, spending huge amounts of time helping the wealthy ensure; they can pass the capital gains to their heirs. No productive deployment of capital is possible in a model where huge capital gain investments are kept “locked in”, just to avoid tax, and not because it is best for our economy.
  2. Capital gains help the poor come out of poverty as they encourage innovation and entrepreneurship. In my example Mr. Slim does little or nothing to promote innovation and entrepreneurship because his grandfather left him billions in capital gains, which he will pass on to his heirs on his death, also tax free. Mr. Fat on the other hand may become hugely successful and then end up paying millions in taxes, as he and his heirs will need to continually sell and invest; in new ventures, and risk taking entrepreneurships. In fact this Angel is truly one of death, as it encourages protection of the status quo, and not the wild adventures of swashbuckling pirates needed for development of our economy.
  3. Cutting Capital gains tax will lead to an economic boom. Detailed analysis over a long period has shown that there is no clear relationship between Capital gain’s tax rates and GDP growth as increases in rates have not caused an economic collapse or a decrease in rates caused an explosive growth in GDP.

I pointed out to our Angel that half of our tax code is used to just define the difference between Capital Gains and Income and we can reduce all this complexity by just going to a single consumption tax. The current code is unfair, inefficient and overly complex. When I said that congress can do all this at one stroke, he brightened up considerably. I smiled and said that as it is so simple he need not worry as the Angel of Death, will become the Angel of Life for a new economic boom. It was then I realized that he was happy not at the easy solution but at the mention that only our Congress can change this complex tax law. He passed my financial plan for the year and I left I saw him smiling; as he knew he was secure, as the do nothing congress, will make sure he lives forever.

Music of the universe

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“You know, you come from India and you say, ‘OK, I’m representing a 3,000-year-old history,’ so you think you’re gonna teach the world about rhythms and drums and so on,” he says. “And then you arrive here. You suddenly realize that you know nothing. You’re just one little dot in the painting that is the music of the universe.” Zakir Hussein tabla maestro who played early with George Harrison, and later in the Grateful Dead’s endless jams at their barn cum studio at SF, and many leading musicians over his lifetime, said in retrospection.
With India’s PM Modi showcasing his Vibrant Gujrat model, and a Rs. 100,000 Crore (1B) investment promised by leading industrialist Mr. Mukesh Ambani, the grand show is off to a good start. Why a privileged few are anxious to showcase their interest in an economy, which has been consistent only in underperforming on expectations for the past few decades, is mystifying. Expectations that Mr. Modi and his Finance minister Mr. Jaitely will perform the magical rope trick; on which the Indian economy will climb to the stars, are to say the least high. In many Indian’s mind, the climb to becoming number one in the world is; not how but when. Make in India drumroll marches on the back of its prowling lion and all are invited.

The solution needs a many pronged approach and will be a long and hard journey. With a million people joining the workforce every year, India is poised to become the number 1 workforce supplier for a longtime to come. With a 100 million already issued, the PM’s Adhar Bank accounts, it is going to be the largest exercise of Keynesian economy, at a micro or a macro level. The new NITI body will bring together Centre and State interests and actually work for long term development; as without a strong center, the States cannot develop fully. Grass roots laws, administration and education policy framework has to change, for economic development to take place unheeded. The problems are overwhelming, but as Mr. Modi challenges, he is not looking for incremental solutions but for quantum changes that will radically improve the status quo.

To bring up a judiciary that is at best corrupt and at worst activist to an extreme, meddling in social, political and economic affairs; and make it adhere to the implementation of required justice swiftly, will be tough.
To bring up the education system which is at best misguided, and at worst absent, to a level where India provides the next Doctors, Engineers, Teachers, Nurses, Scientists, Mathematicians and other skilled professionals to the whole world, will be tough.
To bring half its population out of years of servitude to a male dominated society, and into the free world of equal participation and reward, in the form of true woman’s equality; without fear of torture, rape and travel alone in their own city streets, will be tough.

To end the socialist state of government run organizations in all fields of human endeavor like Banking, Insurance, Railroads, Ports, Steel, Oil etc., the state will need to focus on providing good governance. The legacy that we need civil servants, to run mighty entrepreneurial enterprises, probably passed away with the Raj and Nehru. For citizens to be weaned away from the Maa Baap (State as the Mother and Father) complex, in their relationship to the state has to move more towards becoming self-reliant. To become independent in their behavior and thinking for India’s citizens, will be tough.

Each one of us is only one dot in the painting of our universe, as Zakir points out, India will need to stand out with its vibrant languages and contributions to world culture from an enthusiastic young population. They will find their own path to become the number 1 economy in the world. If history repeats India was #1 in GDP from 1 AD to 1,000 AD and may its lotus blossom again for another 1,000 years!

Wealth concentration

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As the slow pace of growth continues in most global economies, banks have nowhere to invest their money; as they do not want to risk giving loans. Forecasts that deposit rates would rise from near zero have been proved wrong for six years running, as the global financial system remained fragile and growth fails to reach pre-crisis momentum. In fact the European Central Bank and now the Swiss Central Bank are charging major banks money, to hold large deposits. The rush of money coming out of Russia and other troubled economies is leading to these negative interest rates, as the Euro and Swiss Franc are being driven higher. This may also lead to deflation which will be the central bank’s nightmare, given the anemic growth rates.

At a time of falling commodity prices like oil at below $ 60 a drop of 50% from recent prices and iron ore at new lows, there is a time for economies like India and China to rejoice; but they are suffering their own growth pains. The Chinese are struggling for a soft landing and the Indians are looking for a hard take off and neither can carry the world economy forward. The beacon on the hill remains the US which despite its dysfunctional government, continues to plow ahead in economic growth. Its old rust belt is suddenly starting to gain in manufacturing activities, and new productivity gains continue to rise; due to innovation and technology breakthroughs. Fracking has finally driven oil prices to levels where we will all have a little extra spending money, in our pockets.

This is all happening while the rich continue to get richer; and the poor are increasing in number and have decreasing opportunities available for education and employment. The digital divide and the disparity in wealth continue to grow. Average wealth of the upper middle class doubled from $ 300,000 to approx. $ 600,000 from 1983 to now. The lower middle class and the poor have increased their desperation in the meantime; and are barely able to make a living wage, much less accumulate wealth. Their world has turned upside down as upward mobility has stalled and the American dream is turning into a daily nightmare. Broken families are struggling just to survive and remain human.

There are no easy fixes, as we are facing a world of uncertainty. While the American consumer continues to be fearless and is ready to start the race to spend even more, the rest of the world is still oiling its economic engine. The race may have been lost even before it began, as the animal spirits that are supposed to encourage economic growth; is strangely missing, in most of the world. The conservatives husband their wealth and the liberals are largely discredited and have been cast into the political wilderness. Obama stands alone while the congress dithers. Senator Warren warns that nobody is looking after the needy and senators across the aisle tell her, welcome to Washington. Jeb Bush will be the next President and then we will have the makings of a truly great nation, as he declares war on Russia, Pakistan and any other nation that the military industrial complex, chose next. Oh and my only wish is that my guardian angel will give me so much wealth, that my grandchildren will happily pay their bankers; to just keep it safe, for their trust fund babies!

Opportunities in Renewable energy

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http://beahrselp.berkeley.edu/wp-content/uploads/2011/11/renewable-energy.jpg

According to the IEA as per amorales2@bloomberg.net “Renewable use in electricity generation is on the rise and will account for almost half the global increase in generation by 2040, according to the report. It said about 7,200 gigawatts of generating capacity needs to be built in that period to keep pace with rising demand and replace aging power stations.

The share of renewables in power generation will rise to 37 percent in countries that are members of the Organization for Economic Cooperation and Development, according to the IEA.

It said that globally, wind power will take more than a third of the growth in clean power; hydropower accounts for about 30 percent, and solar 18 percent. Wind may produce 20 percent of European electricity by 2040, and solar power could take 37 percent of summer peak demand in Japan, it said.”

The leaders in the energy field have to be thinking about generating 1,000s of gigawatts of renewable energy from wind, hydro, solar, biogas, in the coming decades as per the report. We have to wean ourselves away from fossil fuels and reduce the greenhouse gasses effect on climate change. If temperatures continue to rise along with smog (as evident in China today) from the increased use of fossil fuels, we could be looking at a dangerous future for our coming generations. The quicker we change to renewal energy the better for our planet and our environment. A 3.5 degree rise in temperature may not sound like much, but it could cause havoc in storms; and cause instability in nature as a warming trend takes place. This will have unintended consequences of widespread floods or droughts, as weather patterns will be effected around the world.

These dire consequences need to be avoided, and it will help to create millions of jobs for people. Firstly will be the labor required to install efficient renewal forms of energy at an unprecedented scale. Secondly will be all the services, industry and entertainment that will spring up; to meet the needs of the billions of consumers. In an internet of everything world, energy is the bloodline; that unites it all. Have we finally found, the one ring to bind us all; in a world wide web of astral identities, and characters, on this stage of our digital world?

Not only will modern cities be more conscious of renewals; and their environment footprints, but will recycle and become more self-sufficient in their energy and water needs. Urban designs need to change to denser models; where basic amenities can be provided, on a grand scale, to the poorest of the poor. Energy efficiency, its production and storage will become the hallmark of any great city, and the ones naturally proficient will benefit more.

While building the infrastructure for renewals, we will in parallel have to build the distribution system; that will become the arteries of light, in a planned human development. There industries and social services will be delivered to the masses in a new digital world powered by this new source of energy. The elite of course will enjoy the benefits of this energy boost, by grabbing more power, as they have the capital to invest in this new world and technology.

All this must be done while preserving the current state of nature and the environment. Development for humans must not come at the cost of a single other species, as we cannot become the arbitrators; of evolution. We have to coexist with our environment, or will pay the heavy price; of our survival itself. Natural environments and laws can be measured, and we can use this renewal energy; to right the numerous wrongs, we have done to our environments already.

By 2040 a lot of us may be dead, if our environment continues to be neglected, and what kind of earth will we leave behind for our inheritors? I leave you with the somber fact that the:” Earth is also on target for its hottest year ever recorded, according to the National Oceanic and Atmospheric Administration, as well as reaching the highest level of atmospheric carbon dioxide in at least 800,000 years.” We need to fight this on a war footing, and not wait; to become victims of our own evolution.

Solar energy by 2050

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The IEA expects global solar power” with the highest clean-energy deployment, to reach 4,600 gigawatts of photovoltaic capacity in 2050 from about 150 gigawatts now. That would involve annual investments more than doubling to an average of US$225-billion.

For concentrating solar, which involves mirrors that heat steam to generate electricity (shown above), the agency reiterated its vision for about 1,000 gigawatts by 2050 from about 4 gigawatts now. It sees both technologies as complementary.

This explosive growth in solar installations will be driven by further price drops. The cost of electricity from photovoltaic projects will fall by an average 25 percent by 2020, 45 percent by 2030 and 65 percent by 2050, the IEA said. This implies a levelized cost of power of as little as $56 a megawatt-hour for large plants and $78 on rooftops.” (as per Bloomberg)

Hopefully India will revamp its babu’s and legal systems; as without it, progress will be very limited. To become a global solar producer, India needs an appropriate regulatory frameworks; with well-designed electricity markets, away from the current inefficient State electricity boards, to a modern National grid. Huge investments from disinvestments, in other sectors, will be critical to achieve this potential; and global scale projects, will be required to make it happen from an already strapped Finance Ministry.

Energy security should be at the top of any future India development list; along with education, healthcare and the reduction of inequality and poverty. It should be pursued aggresively; as we have the technology, and the extreme need, of an energy starved billion people. Renewal energy independence is the need of the hour; and solar is one of the pillars of this foundation, along with hydro, nuclear, wind, biogas.