The institute lecture series organised at IMNU on 6th August,2013 was delivered by Dr. Kirit Parikh. Dr. Kirit Parikh has served at various positions in the government bodies such as Planning Commission, United Nations Development Program and has also been on the panel of Economic Advisory Council of Former Prime Ministers such as Rajiv Gandhi, V P Singh, Chandra Shekhar, P V Narsimha Rao and Atal Bihari Vajpayee. He currently serves as the chairman of Integrated Research for Action and Development (IRADe).
The lecture focused on the issue of Energy Security and covered areas such as what is energy security, the problems faced by the country and how to mitigate these problems. He defined energy security as the availability of enough energy for everyone irrespective of their ability to pay. It also states that the country should be able to meet the effective demand for safe and convenient energy at competitive prices at all times with a prescribed confidence level.
The problems pertaining to the energy security were then discussed by Dr. Parikh in great detail. The most important issue is that India is extremely import dependent when it comes to sourcing of oil. Products like diesel, LPG and kerosene are highly subsidized and thus add to the financial burden of the nation. Subsidy of the above mentioned products come at a cost which is borne by various bodies. This cost is referred to as under recovery and to some extent is compensated by the government. Oil marketing companies (OMC’s) such as Indian Oil incur substantial losses while selling fuel at subsidized rates. The under recovery for the year 2013 is estimated to reach a staggering 200,000 Crore. A part of it is paid by government, a part by OMC’s and the rest by upstream oil manufacturing companies such as ONGC.
Towards the end, the implication of excessive import was brought about in the lecture. It is like a domino effect wherein first the fiscal deficit increase, which forces the Reserve Bank of India (RBI) to increase money supply in the market, then due to the increased money supply, inflation rises. Finally the cause of increased inflation is a fall in the GDP.
(Content Courtesy: Kashyap Rao)