The Indian government and its companies are thinking of taking up polysilicon manufacturing for solar energy panel production. The two major power Indian PSUs NTPC and BHEL are reportedly planning to set up a Joint Venture which will set up a plant to make polysilicon for 10 GW of solar cells production which would mean a plant with a capacity to produce 30,000 to 40,000 tons of poly. Note the Indian government is trying to get out of industrial production and has recently unveiled a policy where it will privatize a majority of its companies which make a wide variety of consumer and industrial goods.

It makes sense given that these companies have low corporate governance, are highly inefficient, and also major centers of corruption under the control of bureaucrats and politicians. Many of these companies have gone bankrupt due to the extremely poor governance and problems of the rules under which they work. The employees of these companies are generally inefficient, given that they have lifelong job security, and their KPIs are not aligned as per normal practices.  This is one of the key reasons why the Indian PSU stocks have heavily underperformed the overall markets over the last 10 years and trade at low single-digit P/Es.

BHEL is about to go under as it for years failed to change its strategy of producing capital equipment for a dying sector which is thermal power plants. It produces boilers and turbines for the coal sector which now nobody uses. But the company, due to its sheer inertia, has not been able to change and is now flailing at different sunrise sectors without having a clue. NTPC which is one of the world’s largest producers of power also faces a similar situation in the future with its massive fleet of 50 GW of coal-based power plants becoming obsolete due to the rapid rise of solar and wind energy. These companies are trying to enter new areas to keep them relevant but given their institutional issues will in all probability meet the fate of the telecom companies like BSNL. The government should just create the right incentives and allow the private sector to make polysilicon rather than getting into producing on its own. The solar sector is highly dynamic and it may happen in a few years that polysilicon may no longer be used for solar panel production. The massive investment of almost a couple of billion dollars will then go to waste as these companies are not nimble enough to traverse the rapidly changing pathways of solar energy.

Softbank, the Japanese Telecom giant, made it big with its investment in Alibaba, the Chinese e-commerce group. The bank started its story in India with investments in Indian e-commerce businesses like Snapdeal,, and Ola.  Later, Softbank became the majority stakeholder in SBG Cleantech a JV along with India’s Bharti Enterprises and Taiwan’s Foxconn. It also tried to score brownie points with the Indian government’s “Make in India” as it tried entering into solar panel manufacturing.

Softbank was going big in the Indian Renewable energy sector and had announced a $100 billion investment into India’s solar industry over the next 10-15 years.  The company had already built a substantial portfolio of solar power projects in India’s rapidly growing solar energy sector, at that point in time. Softbank became popular for its audacious plans and its ever more audacious investments. However, the company is now planning an exit from the Indian energy market as it is mired in the global crisis and looks at raising cash amid global investment setback.

Softbank is already in talks with sovereign wealth and pension funds from the Far East and Gulf regions and a few Silicon Valley technology giants. However, still at an early stage and may not result in a deal. The company is open to an outright sale of its 70% stake in SBG Cleantech and also a majority stake sale. It is looking for a partner who can offer equity commitments of $1.5 billion-$2 billion to execute and complete a pipeline of 7 GW of renewable projects worldwide.

The Indian solar power sector is already facing a slowdown with lower capacity addition in the past two years – from 9.4 GW in 2017-18 to 6.5 GW in 2018-19 and just 2.9 GW in the first half of 2019-20. We hope that this development from Softbank is not bad news for the energy sector in India.

Lumos which is a Dutch company operating in the off-grid solar space in Nigeria plans to substantially scale up its presence in the Western African country. Nigeria like many of the other African states has a huge energy access issue with a large section of its population having no access to electricity as there is no grid. Even the people who have access to the power grid face issues of reliability and quality as the power generation and distribution infrastructure remains in a very bad state.

The lack of power is one of the major impediments to the growth of the economy and a better life for its people. Lumos plans to address this energy access issue by expanding its capacity tenfold using incentives to be given by the Nigerian government through World Bank funding.

Lumos installs solar home lighting (SLS) systems which typically consist of solar panels, battery, fans, lights, etc. as a unit. This SLS can work as a completely independent unit to provide power to a household that has no access to the grid. The SLS can be customized for the requirement of a household depending on its paying capacity as well as its power requirements. Given that many households do not have money to pay for an SLS at one go, the company takes the money from customers using a Pay as you Go (PAYG) model which is quite popular with many off-grid solar companies in Africa. The company uses the MTN telecom company’s infrastructure for distribution as well as bill collection.

The SLS systems are sold using a market-driven model as households spend quite a significant amount on their energy needs to buy kerosene. Not only is kerosene expensive but it also affects health as well as causing global warming. The SLS system sold by Lumos can provide the same energy requirement at a much more cheaper price and is also climate-friendly to boot. Scaling up these solutions is a problem which has been smartly been solved by using the infrastructure of MTN. The funds from the Nigerian government will help boost the growth of Lumos which will target not only non-grid households but also on-grid households that face the problems of unreliable and poor quality power.

Also, read about Off-Grid Solar System in India and how the Off-grid Industry goes for a Toss, with India reaching 100% electrification.

India has a large public sector owned corporate sector which is dominated by oil companies such as IOCL, BPCL, HPCL, ONGC, etc. These are multi-billion dollar companies which are spread across the oil and gas value chain. They own a massive asset base and play a key role in the energy infrastructure of the country. However, like other government owned companies they are slow moving and bureaucratic who find it hard to play in competitive sectors. While the size of these companies makes them relatively immune from cyclical forces, they are very suspectible to structural changes.

This has already been seen in multiple other industries such as telecom where companies like BSNL, which had a huge market value are now finding it hard to pay salaries to their staff. Hobbled by government interference, a huge employee base and little in terms of innovation, they are highly vulnerable to disruptive change. BHEL which used to be a capital equipment giant is finding it hard to reinvent itself after the thermal power industry has gone into a major structural decline. With orders for its boilers and generators declining, BHEL’s stock price has continued to go down with little hope for succor. Coal India which is a virtual monopoly in the coal mining sector is another company whose future is cloudy, given that renewables are cheaper than coal power and thermal capacity is hardly increasing in India.

India’s oil companies have come out with plans to adapt to the Electric Vehicle industry but these plans are yet to be implemented. With the use of electric chargers for charging EVs, the thousands of downstream refilling stations of these companies will become redundant in the coming days. Their huge refineries will also have to change from refining crude oil to petrol and diesel, they will have to move to petrochemicals. These companies may find this very hard as the petrochemicals are highly competitive and they may find themselves driven out by private giants such as Reliance and Nayara. Their downstream investments and revenues will also see a major hit in the coming days. Their top management has their head in the sand and is not worried too much. It is pretty much the same story of what happened in telecom and capital equipment. Unless the government quickly privatizes and gets out of these companies, Indian taxpayers will see a huge hit in the coming days.

M K Surana, the chairman and managing director of Hindustan Petroleum Corporation Ltd (HPCL), said electric vehicles will not be a threat to the oil industry “at least for the next ten years” as it will snatch away only a part of the “incremental demand” and “not disrupt the existing demand”.

“The main concern now (with the push for EVs) is that, is it the end game for the oil industry; we do not believe that. Does it mean that it is business as usual; the answer is no,” Surana said at a media conference on Wednesday.

Source: Hindu Business Line

The Problem for “Make in India”

India has failed to grow its manufacturing base in multiple areas, despite huge domestic demand powered by more than a billion people. This has resulted in huge imports every year mainly from China and other western countries. From high technology products to things like toys and idols, India imports it all despite having the capacity and demand to “Make in India”.

The problem lies in how policy and regulations are formed by the top echelons of the government. Strong lobby groups of private entities and foreign companies manage to influence and shape policies which are strongly against the national interest. Given that imports are cheaper especially from China, it is in the interest of the private entities to procure cheap material and equipment from China rather than buy it from domestic suppliers. In the case of high technology items, it is not possible to source from India at all. This leads to foreign suppliers becoming even bigger and more powerful, while Indian companies become small and obsolete.

Solar Energy

Image Credit: Pixabay

This has already happened in multiple industries. Despite a huge telecom market in India with more than a billion subscribers, the country imports almost all the semiconductors and equipment required from Western and Chinese firms. India has virtually no 3G or 4G technology to call its own and as the world moves to 5G technology, the country will be importing billions of dollar in equipment every year enriching the foreign suppliers. While China managed to create national champions such as Huawei and ZTE using the power of its domestic market, India has nothing to show for it. Even in telecom handsets, Chinese firms such as Oppo, Vivo, Xiaomi rule the Indian market with hardly any Indian name. In the cause of cheaper costs, India has virtually destroyed the long term drivers of wealth creation.

In new technologies such as AI and machine learning, China is competing with the USA for the No.1 position with India to be seen nowhere. All the country does is provide engineers in their millions for a very cheap price to create IP for the foreign organizations, which is sold back to India. Even in renewable energy technology, India has sold itself off to the Chinese solar panel makers. In wind turbines where India had a strong industry, it is going the wrong way with strong WTG makers like Vestas and GE stealing market share from the likes of Suzlon and Inox. Unlike Japan, China, and South Korea, India does nothing to support and protect its domestic companies which are forced to fight on an uneven level playing field with strong foreign entities with much better financing and technological capabilities.

In solar energy where India is going to install 10 GW plus every year, Chinese suppliers rule the roost with more than 90% market share. Piecemeal efforts like putting a puny safeguard duty for two years has done nothing to nurture an industry which needs long-term support. Foreign controlled entities like Goldman Sachs’ Renew Power care two hoots about India’s domestic interests as they hanker for cheaper equipment from China.


The word “Aadhaar” means “basis” in English. Aadhaar is a twelve-digit identity number for Indian residents, which was implemented by the government to provide a unique digital national identity to the citizens of the country. Aadhaar creates a digital identity to supplement the physical identity. It has been globally recognized as the world’s largest digital identity programme.

The Aadhaar scheme was initiated by the UPA regime to curb the rising number of fake accounts of fictional beneficiaries in the government’s welfare schemes for the underprivileged Indians.

The data for Aadhaar is collected by Unique Identification Authority of India (UIDAI), a statutory authority established by the government of India in January 2009. The Supreme Court of India ruled that Aadhaar is voluntary and not mandatory. On 24th August 2017, the Indian Supreme Court further reaffirmed the right to privacy as a fundamental right.

Nandan Nilekani, the co-founder of Infosys, was appointed by the then UPA government to manage this massive IT project. Aadhaar was launched in 2012 by the then Prime Minister Manmohan Singh. The present-day government in India provided legislative support to the Aadhaar project in 2016.

Aadhaar’s success in India can be gauged by the fact that out of the 130 crore population in India, 119 crore citizens currently possess an Aadhaar card. The states of Delhi, Haryana, and Telangana have seen high Aadhaar adoption, while northeastern states are lagging behind.


Source: UIDAI

Why is the government pushing Aadhaar

Aadhaar aims at digitally empowering Indians, especially the rural population through the Aadhaar-enabled payment system. People in remote parts of the country can easily access their wages, pensions, provident funds etc. with an Aadhaar card. A massive amount of Indian taxpayers’ money has already been saved by detecting fake gas connections and ration cards.

Aadhaar was introduced to better manage bureaucratic services and provide improved governance. It provides for distribution of subsidies to the rightful beneficiaries plugging the leakages which are endemic to India’s social welfare schemes. In future, the Aadhaar card will be made mandatory to avail benefits of various government schemes and services. In addition, an Aadhaar letter provided by UIDAI will act as a valid proof to open a bank account. If you possess an Aadhaar card, you can get a passport in just 10 days. A few states are also making it compulsory to own an Aadhaar card before buying a new car (Andhra Pradesh) or a new SIM.

Another advantage of Aadhaar is the creation of formal documentation of an individual’s education and employment records, which would contribute to building a stronger Indian economy in the future.

Also, read The Rupee Remains Weak Following RBI Chief Resignation

Aadhaar Challenges

Aadhaar has faced several challenges as it solicits the collection of private information like fingerprints and iris scans of individuals. A number of citizens are skeptical about linking Aadhaar numbers with their respective bank accounts, mobile phone numbers, investment accounts etc. as it creates privacy issues. This information may be misused by the government.

Aadhaar-linked data is available with the state governments and numerous people involved in the ecosystem. This creates a valid concern about the government’s ability to protect their personal details. Despite the government assurances about the foolproof nature of the system, there have been numerous cases of hacking of databases both in the public and private domains that makes one doubtful whether the government can protect the Aadhar database.

A recent verdict by the Supreme Court has imposed restrictions on the usage of Aadhaar by private companies, citing privacy concerns. Aadhaar will continue to be used for welfare schemes for the underprivileged and is mandated to be linked with one’s PAN (permanent account number). Further, the court has also ruled the need of a proper redressal mechanism for anyone who suffers from identity theft, due to lapses on the part of UIDAI.

In the wake of the above decision private companies, especially banks and telecom companies will not be able to freely use Aadhaar numbers of their customers for e-KYC.

If a citizen has already linked his/ her Aadhaar with various services, he/ she can connect with the service providers to delink their Aadhaar.

What the common man has to say

There are opposing views regarding Aadhaar from different walks of life.

Citizens of modern India like those working in MNCs think Aadhaar to be annoying because they receive recurring reminders from banks, telecom companies, and mutual fund houses to link their accounts with their Aadhaar number. “I am concerned about the safety of my identity and accounts to be given to the world so freely” – says a friend of mine Rahul Agarwal, who is working with PwC in Gurgaon. If the linkage is not done, then there is a threat that the bank account, mobile network etc. would stop working.

A Modi believer said “I did it because of the government push and I have full trust in the Modi government. I hope it will help to strengthen the Indian economy in the future.”

People like the house help have been really thankful to the government for Aadhaar. Sheila a cook working in Gurgaon says that Aadhaar has eased her life as it is now convenient to open a bank account and send money home. She was also able to get her entry passes, to different residential societies made easily, because she possessed an Aadhaar card. She says it is was very easy to get subsidy funds for a bicycle (for her eldest daughter who goes to a government school) from the relevant authorities.

For people like Sheila who have left the comforts of their own homes and are working in cities to provide a decent living for their families back home, Aadhaar has come as a boon.

Aadhaar as compared with other social identity programs

Despite people loosely comparing Aadhaar with Social Security Number (SSN) of the US, there are huge differences between the two. The most important one being that SSN details of an individual are shared with the federal agencies and entities that store the data at an organizational level. The law prohibits its use for any commercial or promotional purposes, unlike Aadhaar which was being freely used by private and public companies in India, until the most recent verdict was passed by the apex court on September 26th, 2018. Unlike Aadhaar, which stores personal information like the biometrics, SSN does not solicit any such information and even restricts its usage. Moreover, the Social Security Number is not an identity number.

The chief economist of the World Bank has opined that India’s Aadhaar is one of the most sophisticated systems and proposes a worldwide adoption of the same. Many other emerging economies in the world are trying to implement similar identification programs. For example, Brazil and Indonesia are implementing national identification programs with biometric features,  while the Ghana card was developed to deliver public services.

Malaysia’s national identification program (MyKad card) is considered one of the most advanced programs in the world and was launched in 2001. It is proof of residency and can be used as a driving license, passport (within Malaysia) or an ATM card. The basic difference with the Indian Aadhaar card is that the Malaysian government grants freedom of choice to its citizens where to use it. According to the Indian apex court ’s recent ruling, people will have the option to opt out of the system in a few instances.


Aadhaar has been a big step forward towards achieving the vision of a “Digital India”. It aims to become the most important identity proof for Indian citizens. Digital identity is gaining traction worldwide and is being used more commonly now. One common application is the operation of smartphones with fingerprints or eyes. One of the biggest criticisms of the Aadhaar scheme is that a large amount of personal details is collected by UIDAI. However, the details collected during the creation of Aadhaar accounts like core biometrics are being secured through strong encryption. The Aadhaar ecosystem is also subject to audits from time to time. Aadhaar is one of the biggest structural reforms undertaken by the Indian government aiming at the formalization of the Indian economy.