A Looming Electrical Crisis in India

Just twenty years ago, India would have been considered by many to be one of the most impoverished countries on the planet. The country modeled it’s protectionist economy off of colonial era England’s and soviet Russia’s. The country’s sluggish GDP growth between 1947 and 1991 rarely eclipsed 2%, and in many years saw a decrease. However, in 1991, India started its liberalization period. Due to policies that were instated starting in the late 1970s, such as the reduction of corporate taxes, the creation of small scale industries and the easing of restrictions on capacity expansion for incumbent companies, the country started to see economic growth. A lot of it. Since 1991, India has regularly seen 7% to 10% GDP growth, making it one of the four fastest growing economies in the world. It is now even a G-20 nation. However, despite India’s rapid ascension on the global stage and in geopolitical prominence, the political leaders have overlooked something during this time span that could largely hinder their growth in the future: Its electrical grid. As of right now, the Indian government is failing to modify its antiquated electric grid fast enough to keep up with its speedy economic growth. The country, which saw a GDP increase of a whopping 10% in 2010, is seeing a dynamic and immediate effect on its output of goods. Given that the country is expected to see a 7% rise this year according to many economists, this inability to maintain a modern grid could be devastating to future growth. Rolling blackouts in India are common, and can last up to twelve hours at a time. This applies to even the country’s capital, New Delhi. 44% of rural households in the country don’t have access to electricity roughly 50% of the time. Because of these rolling blackouts, car manufacturers frequently have to halt production and simply dispose of cars that were in the middle of being built because they can no longer pass the quality assurance test. And the demand for this electricity only gets higher and higher. Right now, factories are being forced to use diesel generators, which do a supply a steady stream of energy needed, but are three times as expensive. Many upstart companies in India simply cannot afford these costs, and have debated moving their business elsewhere. The Indian government has been cognizant of the need to rebuild its grid, but several unfortunate roadblocks have appeared, including a struggle to produce enough fuel and coal. These shortages have been blamed on poor government policies and stringent environmental regulations. But the failure to update the grid is not a failure of engineering, development or research according to most experts. The culprit seems to be the government’s inability to convince Indian companies to invest. “There is virtually no new investment by both the government and private sector, “ Ashok Advani, chairman of air conditioning company Blue Star, said. “We have such an uncertain environment.” Whether or not the government’s failure to muster up the will to invest is indeed to blame, the problem is looming, and could prove to be catastrophic. With the increase in the workforce comes the increase in need for electricity. Right now, India can’t handle it. For more information about diesel generators and industrial engines, check these out.