The country is agog with excitement, with everyone glued to the TV, watching politicians making speeches invoking the nation’s interest. But if there is anything that will be sold at a near 100 per cent discount today, it will be the nation’s interest. Indeed the discount rate will be the reverse
image of the price of their vote. So hectic has the horse-trading been that it is no longer possible to predict what will happen today. Once the Samajwadi Party had agreed to support the Indo-US nuclear treaty, Manmohan Singh decided to seek a vote of confidence in Parliament, sure that the UPA would survive, instead of waiting for the BJP to table a vote of no-confidence. That may also be why the government committed itself to withdrawing the draft safeguards agreement from the IAEA if it lost the confidence vote. It may live to rue both decisions.
Let us make an inventory of what the country stands to lose if the government loses today. The most obvious is nuclear power. France and Russia have had nuclear cooperation agreements with India ready for months, waiting only for the green light from the Nuclear Suppliers’ Group. General Electric and Westinghouse are reported to have $14 billion worth of agreements in the pipeline for setting up power plants. Within a year of the formalities being completed, agreements for setting up 50,000 MW of nuclear power plants should be in place. Also, the completion of the agreement and anticipation of vastly increased FDI would renew the confidence of Indian and foreign investors and raise share prices. If the government were to lower the cash reserve ratio in October, this would cut short the developing recession.
In the longer run, India has no option but to tap FDI for the power sector. India’s current power generating capacity of around 180,000 MW is short of its needs by at least 30,000 MW. If it wishes to maintain a long term growth rate of eight per cent, then even after allowing for increases in energy efficiency, it will have to double its generating capacity every ten years. By 2028, therefore, it will have to add around 630,000 MW of power generating capacity, of which all but around 50,000 MW would have to be thermal-based.
Prakash Karat and his colleagues never tire of repeating that Manmohan Singh is selling India into slavery for a measly six per cent addition to the country’s power generating capacity. Nothing could be further from the truth. If we were to rely on domestic coal, our supposedly abundant reserves would run out well before 2040. Imported coal may soon become unavailable for power plants because of the rapidly developing global consensus (implicit in the G-8’s endorsement of a 50 per cent cut in carbon dioxide emissions by 2050) to phase out the use of coal in power stations within three decades. Since India and China will by then be, by far, the biggest users of coal, they will become the targets of severe strictures over the years.
Lastly, the failure of the treaty will bar our access to cutting edge, dual-use technology. India has paid a heavy price for being shut out 40 years ago. The denial of crucial bits of proprietary technology is what lies behind the 20-year delay in indigenising the original (and now obsolete) CANDU nuclear power generation technology; the consistent failure of our defence research laboratories to develop new weapons systems; and our failure to develop an aeronautics industry, particularly the Kaveri engines for the light fighter aircraft that Hindustan Aeronautics Limited has been trying to develop since the early 80s. In the coming years it is certain to delay the development of fast-breeder reactors. Today, India has to humiliatingly account to the IAEA for every gram of titanium it needs for industrial use. This has put impediments in the way of acquiring some of the latest generation chemical plants that need large amounts of titanium.
The Indo-US nuclear treaty is a rare example of the weaker partner emerging as the gainer. The Left cannot believe it, so it has spent the best part of a year looking for the catch in it. The real catch is that the longer we are left out of the technology loop the higher will be the political price we will have to pay to get back into it.
Prem Shankar Jha is the author of Twilight of the Nation-State
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