Workshop 2: TBLI and India, 15 Sept. 2011

INDIA’S SUSTAINABLE GROWTH – AN OVERVIEW

Rabinder N. Malik, TERI-Japan

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Thanks

Happy to join Workshop on TBLI and India On a very timely and important theme of ESG

(Environmental, Social and Governance) and Impact Investing

I speak as Representative of TERI-JAPAN and also as a retired official of United Nations having served in different countries

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Interconnected and Interdependent World in 21st Century

Whatever happens in India, with its huge population and rapidly emerging economy, has an impact on rest of the world, and vice versa

So to understand situation in India, we must bear in mind what is happening in the world

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Contemporary Global Scenario

Ongoing global financial crisis Shift in power as new engines of global

growth emerge in Africa and Asia Revolutions and rebirth of democracy in North

Africa and Middle East Climate change Rising incidence of mega disasters

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Rising demand for global energy

Global demand and competition for energy intensifying because of growing world population and rapidly emerging economies,

Oil prices fluctuating wildly and sources subject to political uncertainty

Because of these factors and global warming, future economic growth cannot follow fossil-fuel based path as in past

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Emerging economies should not repeat mistakes of past

Developing countries need energy for basic needs for their people

They need financial and technological help to access energy options and enhance capacity to adapt to climate change

World must focus on investments in renewable energy sources, eco-friendly infrastructure, energy efficiency

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Growing investment in renewables

Already positive developments showing increase of investment for Green Economy by 32%, more by developing countries

Also 120% increase in governments R&D allocations for clean energy development

Govts should provide incentives to make costs of renewables competitive

Advantages: Economic,Environmental,Social

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ABOUT INDIA

Country of contrasts Rich or poor, all Indians have mobile phones,

swank hotels, skyscrapers, latest car models These are visible signs of India Huge numbers of poor people living in rural

areas and slums under terrifying conditions Inadequate infrastructure, red tape and

corruption are other problems

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India-a developing country

– 3/4 of population has income of less than $ 2 per day;1/3 of population live in sub-human poverty

– 70% (approx) of rural household (more than 100,000 villages) do not have electricity.

– Per capita income – PPP US $ (WB, 2008 data)India 2,753 (1)

– China 5,345 (2)– Japan 33,525 (12)– USA 45,790 (16)

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Still 300 millions Indians have no access to electricity

They use firewood, kerosene etc. for fuel In absence of central grid, rural poor depend

on aid programs to receive their first light Under TERI’s “LaBL” (Light a billion lives”,

solar lanterns are charged at village charging station and rented out to villagers at nominal cost; also green jobs for those who manage village charging stations

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Need for higher focus on infrastructure development

– Envisaged investment of 1 trillion $ in – 12th Plan (2012-17), with nearly half from private

sector– Already nearly 500 million people living in urban

areas

Sectors – Power/energy, roads & ports, railways, telecom

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India’s remarkable economic progress

For over a decade in 1990s, India achieved fastest economic growth benefiting Indians

Incomes increased, poverty has fallen, and industrialization accelerated

New middle class of 300 million people Their needs met by innovative and low-cost

products – because of concept known as “frugal” or Gandhian engineering

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India – an emerging economic power

– By 2025GDP predicted to grow to $ 3-5 trillion – Population 1.4 billion– 67% (940 million) working age– 42% (590 million) below 25 years

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Serious sustainable development issues

Rapid economic development Creating pressures on India’s natural resources

and environment Rise of GHGs due to reliance on fossil fuels

and rapid industrialization Impact of Climate change on monsoons Water scarcity, waste management, etc.

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India’s National Action Plan on Climate Change (NAPCC)

NAPCC launched in 2008 to address climate change issues in a holistic manner

8 core “national” missions to promote development objectives yielding co-benefits to address climate change effectively

Solar mission to increase share of solar energy and other non-fossil fuels such as wind, biomass and nuclear energy

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NAPCC - continued

After Fukushima nuclear disaster, India continues to use nuclear energy but with enhanced safety measures

Other objectives of NAPCC – energy efficiency, water use efficiency, waste management, expanding forest coverage, sustaining Himalayan ecosystem, clean coal and clean carbon initiatives

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Involvement of Indian Business Community

Indian business community becoming increasingly aware of the power of ESG factors to influence international investments

“TERI-BCSD India”, an independent network of corporate leaders, identifying challenges and new market opportunities arising from implementation of NAPCC, with renewed responsibiliy to follow environment-related laws, standards and codes

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Indian Business Community…..contd.

TERI-BCSD India also highlight actions to be taken by Govt. to ensure effective efforts by business to address national priorities

By investing in socially responsible activities, companies develop new markets for their products, build social support for their operations, and improve their reputation – both locally and globally.

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