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Indian blackout a metaphor for India’s political, economic and infrastructure growing pains

With some pluck, The Guardian begins an editorial on India’s world-record blackout — nearly 700 million people without power — with the following joke:

Q. What do you call a power failure in Delhi? A. Manmohan Singh.

Womp, womp.  But the joke — and the blackout as a metaphor for India’s governmental and infrastructure impotence — cuts deep.

While authoritarian China pushes onward with so much of the world’s attention, India — a chaotic democracy of 1.2 billion — and its political leadership seem stalled.

As The Times of India writes, dubbing yesterday “Terrible Tuesday,” in “powerless and clueless” India, most of north India — including 684 million Indians — was submerged into a power-less world for the second day, with accusations levied at Uttar Pradesh, Haryana and Punjab for over-drawing power.  But that does not hide the fact of India’s antiquated grid system nor the fact of a domestic coal supply that can’t keep up with domestic demand.

On the day of the biggest power failure in, well, human history, power minister Sushil Kumar Shinde was promoted to home minister.

As The Times notes:

Moving Sushilkumar Shinde out of the power ministry now is like changing the captain of the Titanic when it’s reeling after hitting a giant iceberg. The country is in the midst of an unprecedented power crisis. For two days in a row, the grid has collapsed. This doesn’t cover Shinde with any glory. Yet he’s promoted as home minister. Even if that’s ignored, what’s pertinent at this point of time is that Shinde is likely to have some clue about the power problem; a new minister – who will be holding additional charge of the portfolio – will possibly have none.

The international view is not much better. The Guardian writes:

Whatever the unadmirable qualities of contemporary British politics, imagine any cabinet minister failing to apologise for presiding over such a first-class foul-up, then being awarded a promotion. Such, sadly, is the typical high-handedness of India’s political classes, who too often lack any sense of obligation to their voters.

It’s a brooding time for India today, with its most recent quarterly growth rate of 5.3% a nine-year low, its eight straight quarterly decline — while the United States or any Western European country would be elated at 5% annual growth, it means a slowdown of alarming proportions for a country that averaged nearly 8% growth in the past decade.

Banyan, The Economist‘s Asia column, points its finger at Coal India — a bloated, state-run disaster that cannot keep pace with demand:

Not enough coal is being dug up by the state monopolist, Coal India. As a result, generating companies, which own power stations, face the prospect of buying expensive imported coal, with ruinous consequences for their finances. Many are in danger of going bust. As this week’s cuts have shown, the national transmission system that shifts power around the country needs modernisation and investment—some $110 billion according to a McKinsey study. And finally the “last mile” local distribution companies, usually state-owned and which deliver power to homes and businesses, are all but bankrupt. Their tariffs are held artificially low by politicians more keen to win votes than balance the books. They have also chronically underinvested.

Tyler Cowen has also been out way ahead in sounding the alarm on India’s economic slowdown, as evidenced in an op-ed in The New York Times just last May, where he pointed to several causes to the slowdown.   Continue reading Indian blackout a metaphor for India’s political, economic and infrastructure growing pains