Suresh Prabhu has been minister for power, environment and water resources in the National Democratic Alliance government. Water is his passion. He tells Aditi Phadnis how strategies to use natural resources can improve India's economic prospects. Edited excerpts:
During the Atal Bihari Vajpayee years, you diligently chased the idea of interlinking rivers. After that, the project seemed to go on the back-burner. What are the up and down sides of this (because there are many downsides that environmentalists have warned us about) and how feasible is this as a project ?
A supply-side intervention to augment water resources in India entailed transfer of surplus water during peak flow periods from rivers like the Brahmaputra, which are always in spate in the month of August. Thousands of crores of rupees were spent to repair the damage caused to life and property. This process, however, led to a lot of profiteering and corruption. Seventy years of misery and devastation have caused losses amounting to thousands of crores.
Interlinking of rivers was born from this idea: if implemented properly, it could create navigation facilities, generate hydropower and irrigate an additional 35 million hectares of land. However, there are many challenges in its implementation: environmental, societal, political, legal, international, technical, financial, economic and relating to transparency.
When I was a minister, I set up a group of experts and institutions to do an assessment of all aspects of this issue, in order to address these challenges.
The evaluation of risk on all these counts and costs was unprecedented since it was so comprehensive and elaborate. Probably, no one in the past had ever undertaken a task of this magnitude.
But a public interest litigation was filed in the Supreme Court and the Court was monitoring this project. I had submitted all the records and reports to the Supreme Court related to this project. But before the work was completed, the government changed in 2004 and I resigned as minister. The Supreme Court continued to hear the case and a bench led by then Chief Justice S H Kapadia gave an unprecedented order in 2012, asking the government to implement the project forthwith. The content of the order was to ensure the completion of the project in a time-bound manner.
A subsequent revision petition was rejected by the Court. Therefore, today it is a mandatory order of the Supreme Court and the executive is bound to implement it.
I personally feel that only supply-side intervention won't help. We need to look at water resource management as a comprehensive strategy. So we have to look at the demand side as well. It cannot be just top-down, it has to be bottom-up as well. I had put in place a plan to cover 650,000 villages using satellite imagery to map a watershed management plan. I am convinced that if you study this, you can improve cropping patterns and yields, improve the quality of water, and put in place an integrated water resources plan. Then, India's water problem can be solved.
The priority of any government should be to improve water resource management since this will raise the human development index, on which we are currently below Bangladesh.
Do you envisage any political issues…
I met all the political leaders, whether in government or in the Opposition. I met farmers' organisations, trade unions, agricultural experts, representatives of 5,000 small and big businesses all over the country. There were, of course, contentious state and central issues involved. And unless all stakeholders are drawn into consultation, we cannot achieve this. Water has to be treated as a community-owned resource. So, people's participation is imperative.
But it cannot be denied that managing water has to be a national priority.
Water is your main preoccupation. But India is facing a lot of economic challenges that are structural in nature. Statutory commitments on public finance makes the kitty smaller. Unless you have a dramatic infusion of funds or higher/better tax collections, it might not be possible to take up many of the Bharatiya Janata Party government's pet projects - including interlinking of rivers which, apart from everything else, is very, very expensive…
Despite boasting of having the second-largest economy in Asia, and being the fifth-largest in the world, on the basis of purchasing power parity, India continues to have the lowest tax-to-gross domestic product (GDP) ratio. It also has the worst record in the world of income tax assessees. It is ridiculous that despite having the largest middle class in the world, the number of those who pay income tax is not more five to six per cent.
This is the biggest failure of the tax administration and policymakers, and it has its effect on infrastructure development.
China has a 50 per cent savings rate and it has been steadily spending 10 per cent of its GDP on infrastructure over the last 25 years. India needs to improve its savings rate and increase tax collections. It needs to demystify tax laws and improve the attitude of tax collection authorities towards taxpayers.
A lot needs to be done in the infrastructure sector, including power. How do you address the issue of deepened power capacity but the lack of access to coal? How feasible is solar power? In India, where people are averse to paying for power, how do you reform the sector?
Energy is one sector where a lot of problems of India rest: there are issues relating to subsidy, current account deficit, energy insecurity, lack of access, and all these ultimately lead to uncompetitiveness of Indian industry. If we can create a new regime where we can have a darkness-free environment, create an India which is energy independent…
We are energy dependent now because 70 per cent of oil, 100 per cent of liquefied natural gas, almost 200 million tonnes of coal is imported to support the economy, especially exports. This is a huge drain on public finance and economy. Given the insecure energy environment in the country, we have to consider a long-term strategy that addresses energy, economy, environment and social challenges simultaneously. Solar energy provides unimaginable opportunities. Narendra Modi had suggested to the former prime minister, the formation of a club of countries that get more than 300 days of sunshine, so that they can jointly harness solar power. It could be a connected grid and also photovoltaic cells. Such a club would reduce the cost of technology and in the process, India could become a hub for manufacture of solar panel equipment.
However, in the interim, India needs to explore domestic resources for energy. We need better technology for purifying coal, which has 40 per cent ash content. So, coal mining companies must put up coal washeries at their own cost.
My view is that coal blocks need not be sold. There is the possibility of using coal contractors who have their own equipment to exploit coal mines on a leasehold basis. There is no need for transfer of ownership.