More than two millennia ago, Megasthenes, a Greek ethnographer, explorer and ambassador of king Seleucus to the then Mauryan Empire, made possibly the greatest single observation about India that has never really been accorded due credit by our own historians for many centuries now. Megasthenes clearly and unequivocally stated that “there were no famines in India”!

That single mindboggling statement by Megasthenes is possibly the greatest testimony to our civilization. While every other civilization was and possibly still is suffering the catastrophe of a famine, while empires have fallen at the behest of a famine; the latest example being as recent as the collapse of Soviet Union; Indian administrative acumen had the ability to avoid a famine more than 2000 years ago.

That single mindboggling statement by Megasthenes is also possibly the greatest testimony to the decline of our civilization. Two millennia later we still go jittery at the prospect of a drought due to delayed monsoon! Such has been the state of affairs of a nation after “1200 years of slavery” as our prime minister correctly diagnosed recently. Best cures always emerge from the right diagnosis. History tells us that the path to governing a complex nation state like India goes through its inherent diversity. How was it possible that there were no famines in the Mauryan Empire while we struggle so hard to survive even a season of deficient monsoon despite all the apparent technological advancements?

When the Mauryan Empire first amalgamated India as a nation and created a centralized governance structure, Chanakya provided the economic vision to govern India. If the Mauryan Empire lasted for 125 years and if Asoka got the title of greatness, the reason behind that was Chanakya’s doctrine of governance through the Arthashastra. For instance, it is indeed shameful that today we have to regularly remind the governing class about the futility of its “one size fits all” attitude of creating policies from Dilli for all of India while Chanakya had prescribed the exact diversity through his tax regime more than 2000 years ago!

Mauryan governance structure had clearly demarcated villages for their taxes. The first step of this process was to divide the lands of a village into categories of high, middle and low quality so that there was no burden on small farmers with low yields. Then these villages were listed into one of the following heads; those villages that paid their taxes in the form of grain, cattle or gold – Hiranya, those that gave raw material – Kupya, those that supplied dairy produce or free labour in lieu of taxes – Visti, those villages that provided soldiers – Ayudhiya and finally those villages that were exempted from taxes – Pariharaka. At all times of peace the taxes paid by any of these villages did not exceed 1/6th of their total produce. No wonder the subjects loved their kings and there were no famines.

Today after 2000 years we have unlearnt all these lessons of governance and instead Dilli rules India as per the whims and fancies of the Lutyens brigade. No wonder governments become unpopular with such speed. Can Arun Jaitley become the new Chanakya for the Modi Empire and provide the economic vision for the new government? Can Arun Jaitley remove the lexicon of “anti-incumbency” from India’s political landscape by the sheer force economics? We will know the answer to these questions in less than 48 hours.

After traveling for the last couple of months across 5 north Indian states, which provided the core base for a stupendous BJP victory this summer, I have reached two simple conclusions;

  • The slogan “…Ab ki baar Modi Sarkar” with its various rhyming preceding lines possibly created the greatest political branding of recent times. Narendra Bhai’s pitch about having tried Congress for 60 years and wanting just a chance of 60 months to alter the destinies of people created an unprecedented hope among ordinary voters that transcended all local factors.
  • The possibility of 24/7 bijlee as a utopia from Gujarat to the rest of India is the most important tangible result of that vote for hope that people expect from Modi. From Kanpur to Ludhiana to Delhi and every small town and village in between has believed the one Modi promise of solving their power woes, so much so that they are willing to forgive all other shortcomings provided they get uninterrupted bijlee.

Arun Jaitley’s maiden budget speech will be keenly watched all over the world, for it will give an inkling into the mind of the Modi government. This is the moment of truth when we will know whether all those promises were just hollow words or whether Modi is truly the Messiah that India has been waiting for more than 1200 years. Of all the intents, policy decisions and reforms unveiled by Jaitley, the one that will really matter is his vision for India’s power woes. Will the Modi government really bring in revolutionary changes in the power sector or will it just be the usual piecemeal approach?

At the heart of India’s power woes is that ‘black stone’ known as Coal – it is the single biggest problem that India faces and is also the single biggest opportunity that India has. Yes, not just for providing 24/7 bijlee to all Indians, but also if India is to achieve its true potential as a global economic super power then it has to treat Coal as an opportunity rather than as a problem.

60% of India’s power is produced using coal and every year we fall short by anywhere between 80 to 100 million tonnes in coal production and are forced to import it despite possessing the 5th largest coal reserves in the world! This artificial scarcity is a mockery of India created by rulers in Dilli. We are sitting on 300 billion tonnes of coal reserves and yet import coal from outside and keep most Indians in darkness. This is a cruel socialist joke that India has inherited from 60 years of Congress rule. While China produces 3 billion tonnes of coal every year from its almost similar reserves of 330 billion tonnes, we struggle to even produce 600 million tonnes every year. It is this gap that needs to be plugged if India is to get out of its self-imposed darkness and grow into a manufacturing hub to create more jobs in order to employ those 15 million new Indians who will get added to the jobless list every year.

An estimated 400 million people in India still don’t have access to power. Yes, you read it right, after 60 years of malgovernance Congress has forced a whopping 40 Cr Indians into perpetual darkness! The remaining lot of us who still do get bijlee, face power cuts every day as India regularly suffers an average of 15% peak demand shortage in electricity supply. This is why close to 22 Cr Indians voted for Modi as the PM this summer. Lesser and lesser Indians believe the Congress party today because it has played havoc with bijlee in its recent 10 year rule. Instead of simplifying the process of getting access to India’s vast coal reserves, all UPA did was to muddle the process further by first selling coal blocks through corrupt practices and by later creating unnecessary environmental roadblocks by catering to the anti-India NGO brigade.

By 2030, India’s projected electricity demand would be 800000 MW and if the Modi government wants to undertake rapid industrialization this could go up further. How are we going to meet that whopping requirement when even today we are facing an acute shortage of coal? The situation is so precarious that our new coal minister, Piyush Goyal, warned just yesterday that half of the country’s power plants have only enough coal to last for a week!

Problems are aplenty; environmental issues that need to be addressed quickly, creating rail networks between coal production units and power plants, corrupt practices of previous regime which have created the ghost of Coalgate. But the single biggest problem is that public sector undertaking known as Coal India Limited which also happens to be the largest coal producer in the world accounting for 80% of India’s coal production. There is a reason why it is the largest in the world, because it is simply imprudent to have a single coal producing entity so large. While the whole coal producing world is busy creating nimbler coal companies to avoid union problems, socialist republic of India has been busy creating a dinosaur.

Coal India Limited (CIL) represents the other extreme of maximum government, minimum governance. Every year it falls short of targets; for instance, last year CIL had a target of 562 million tonnes but only produced 475 million tonnes (80 million tonne shortage), while this year that deficit is projected to further increase to 85 million tonnes. Furthermore, coal produced by CIL is of low quality as it is mixed with stone which creates critical power shortage at crucial times due to coal grade slippage. Last but not the least, most of CIL’s coal mines are located in West Bengal, Odisha, Jharkhand and Chhattisgarh, where three of the states have non-BJP governments and the unions have political patronage of state ruling parties.

Coal unions are dens of anti-progress activities as many are apparently funded to keep India into darkness. D.D Ramanandan, vice president of All India Coal Workers Federation, has recently given a blatant warning to Modi, “We know for sure this government will try hard to restructure Coal India, but once we come out on the streets, neither Modi nor BJP will be able to save the country from falling into darkness!” This is the level of doggedness with which these unions protect their turf and the best way to deal with them is to divide them.

coal-india-630-1The solution to the problem of this dinosaur known as Coal India Limited can actually be found in the Chanakya doctrine of division of villages. CIL is in reality an amalgamation of 7 subsidiary companies of roughly similar sizes. If CIL is split into these 7 entities, they would be far more productive and also easier to manage. It is a typical business case of sum of parts being greater than the whole. In fact there is clear evidence here in India of how a smaller coal producing company can produce far better results. Singareni Collaries LTD, a coal company owned by Telangana government has been consistently beating output targets for the last 6 years because it is a smaller nimbler outfit. After splitting CIL, if the government also deregulates coal production in India to allow private participation, it could potentially lay the foundation for India’s superpowerdom!

All eyes will be on Arun Jaitley on Thursday to see if he really gives us path-breaking reforms in the power sector and create an Indian century. 22 Cr Indians voted Modi to power and are now waiting in their homes in anticipation of power in return.

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Praveen Patil

Praveen Patil

Analyst of Indian electoral politics and associated economics with a right-of-centre perspective.