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Why rejecting the $11.6 utilities package to curb pollution is a bad idea?

By Finserv MARKETS - Dec 5,2019
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Pollution has reached dangerous levels in our country. Citizens are gasping for breath but there is a glaring lack of political will and action to mend this precarious situation. Urban pollution in India has reached a stage where people in some cities are literally living in a gas chamber. It’s not surprising then that air pollution accounts for 12.5% of deaths in the country and is responsible for killing close to 1 lakh children below the age of 5 years every year.

India has regularly featured in the top 10 list of most polluted countries in the world, especially when it comes to concentration of PM 2.5 particles in the air. PM 2.5 stands for fine particulate matter with a diameter of less than 2.5 micrometres.

Another parameter to judge the level of pollution in a city is the air quality index (AQI) and it is equally alarming in India. A recent report highlighted that 6 of the top 10 most polluted cities in the world are in India. New Delhi, due to incessant crop stubble burning in neighbouring states, was the world’s most polluted city on November 15, 2019. The city’s AQI level was at 525, which is an extremely dangerous level.

Why rejecting the $11.6 utilities package to curb pollution is a bad idea
Despite warnings and strict directions from the Supreme Court, neither the central government nor the state government of states surrounding New Delhi has taken adequate measures to stop or reduce stubble burning over the years. No subsidy or funding has been provided to small farmers so that they can use an alternative method to clear the harvest.

Civic apathy and political will is clearly visible in highly polluted cities of NCR such as Gurugram, Ghaziabad, Faridabad and Noida. The problem is worse in Tier II cities such as Kanpur, Lucknow, Patna, Varanasi, Agra, etc.

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The $11.6 billion (Rs. 85,000 crore) utility pollution reduction package

Finally, there was a glimmer of hope when the Power Ministry announced a Rs. 85,000 crore package for utility companies to install equipment that will help them curb power plant emissions. Emissions from coal-fired power plants are one of the biggest causes of pollution in some Indian cities.

Cities such as New Delhi is the worst affected due to power plant emissions that release sulphur dioxide, coal, fly ash and secondary particles in the air. The city is surrounded by close to 13 power plants in a 300-km radius. Emissions from power plants account for 41% of PM2.5 during summer and 35% in winter in New Delhi. However, more than 50% of power plants under operations are in the states of Maharashtra, Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Gujarat.

Pollution from power plant emissions are not limited to a certain region and can have an impact worldwide. There are currently 7,861 power plants in the world but according to a report published by Nature Sustainability, India’s power plants are the most harmful to human health.

Why rejecting the package by the finance commission is a bad idea?

Just a few days after the $11.6 billion package announcement, all hopes were quashed as reports surfaced that the finance commission was likely to reject the package. The reason given was that it was “unviable.”

Ironically, the central government has been announcing a slew of stimulus and rescue packages for the Indian economy worth billions of dollars without any form of protest from the finance commission. However, the first significant step to curb pollution taken by the government has been rejected citing the spending as unviable.

Presently, as many as 34 power companies in the country owe over $11 billion in dues from government-owned power distribution companies. These debt-stressed power utilities are in no position to meet the environment ministry’s 2015 sulphur dioxide emissions standards. This incentive package by the power ministry would have helped these companies to retrofit their plants and reduce emissions. The finance commission’s decision to reject this pollution reduction package at a time when Indian cities are facing a severe air pollution crisis is a bad idea.

The Indian government’s spending on public health care is just a very small fraction of the GDP; lower than even some neighbouring underdeveloped countries. The central government’s Ayushman Bharat scheme, which was introduced to provide subsidized health insurance cover to low-income groups, is yet to gather pace. While the common man already suffers for lack of affordable healthcare services and low penetration of health insurance plans, the government’s inability to take adequate action to curb pollution at this stage can put millions of lives in danger.

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