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Sources of Energy: Conventional and Nonconventional Sources –

Energy is one of the most important component of economic infrastructure.

It is the basic input required to sustain economic growth. There is direct relation between the level of economic development and per capita energy consumption.

Simply speaking more developed a country, higher is the per capita consumption of energy and vice-versa. India’s per capita consumption of energy is only one eighth of global average. This indicates that our country has low rate of per capita consumption of energy as compared to developed countries.

Two Main Sources of Energy:

The sources of energy are of following types:

 

 

 

 

 

 (A) Conventional Energy Sources:

The energy sources which cannot be compensated, once these are used (after their exploitation) are termed as conventional energy sources.

Some important conventional energy sources are discussed below:

1. Coal:

Coal is a major conventional energy sources. It was formed from the remains of the trees and ferns grew in swamps around 500 millions year ago. The bacterial and chemical decomposition of such plant debris (which remained buried under water or clay) produced an intermediate product known as peat which is mainly cellulose (C₆H₁₀O₅)_n. Due to progressive decomposition by heat and pressure, the cellulose lost moisture H₂ and O_z and got converted in to coal as per the given equation

The average formula of coal is (C_3/H_4/)_n. Out of the 6000 billion tons coal stocks under earth crust, 200 tons have been exploited the present society. The coal reserves are found in the states like Jharkhand, Orissa, West Bengal, M.P. and A.P. Some important coal fields are :Talcher, Raniganj, Jharia, Bokaro, PanchKonkam, Signoulli, Chanda etc.

2. Petroleum and natural gases:

Petroleum is a complex mixture of hydrocarbons, mostly alkanes and cycloalkanes. It occurs below the earth crust entrapped under rocky strata. In its crude form, the viscous black liquid is known as petroleum and a gas in contact with petroleum layer which flows naturally from oil wells is termed as natural gases. The composition of natural gas is a mixture of mainly methane, (95.0%), small amounts of ethane, propane and butane (3.6%) and traces of CO₂ (0.48%) and N₂ (1.92%).

A liquid mixture of propane and butane can be obtained from natural gas or refinery gases at room temperature under a pressure of 3-5 atmosphere. This is stored and distributed in 40-100 litre capacity steel cylinders.

The crude petroleum after being refined and purified, are available as petrol, diesel, kerosene, lubricating oil, plastic etc. for commercial and domestic use. In India, the oil deposits, are found at Ganga-Brahmaputra Valley, Bombay high, plains of Gujarat, Thardesert of Rajasthan and area around Andaman Nicobar islands.

On the world basis, petroleum deposits are found at Saudi Arab, Iraq, Iran, Kuwait, USA, Mexico, Russia etc. As per the current survey, it is found that world petroleum deposits are diminishing at a very faster rate. If preventive steps are not taken, the existing petroleum will be available maximum up to 40 years.

3. Fuel woods:

The rural peoples require fuel wood or fire Wood for their day to day cooking which are obtained from natural forests and plantations. Due to rapid deforestation, the availability of fire wood or fuel wood becomes difficult. This problem can be avoided by massive afforestation (plantation) on degraded forest land, culturable waste land, barren land grazing land etc.

4. Hydropower:

Energy obtainable from water flow or water falling from a higher potential to lower potential, is known is hydro- power. It is a conventional and renewable form of energy which can be transmitted to long distance through cables and wires.

In India, hydroelectric power is generated by a number of multipurpose river valley projects e.g. Hydro-power project Hirakud, BhakraMangal project, Narmada valley project, NagarjunSagar project, SardarSarovar project etc.

5. Nuclear energy:

A small amount of radioactive substance (U²³⁵) can produce a lot of energy through the process of nuclear fission. For example, one ton of uranium can provide energy which is much higher than three million tons of coal or 12 million barrels of oil. In order to obtain nuclear energy, nuclear reactors are required. There are around 300 nuclear reactors all over the world. India has only four nuclear power stations (reactors).

The nuclear energy can be used in production of electrical energy, as a fuel for marine vessel and space crafts and for the generation of heat in chemical processing plants. In India, Uranium deposits are found at different parts of Rajasthan and Singhbum of Jharkhand.

Thorium is recovered from monazite sand found in the state of Kerala. Due to the higher energy releasing tendency of these radioactive substances, these can be used in nuclear reactors to release energy crisis. But the radioactive substances are exhaustible and can be used to develop nuclear weapons of mass destruction. In addition, dumping or radioactive wastes cause serious environmental hazards.

(B) Non conventional energy sources:

The conventional energy sources discussed above are exhaust­ible and in some cases, installation of plants to get energy is highly expensive. In order to meet the energy demand of increased popu­lation, the scientists developed alternate nonconventional natural Resources sources of energy which should be renewable and provide a pol­lution free environment.

Some nonconventional, renewable and inexpensive energy sources are described below:

1. Solar energy:

Solar energy, a primary energy source, is non-polluting and inexhaustible.

There are three methods to harness solar energy:

(i) Converting solar energy directly into electrical energy in solar power stations using photo cells or photovoltaic cells or silicon solar cell.

(ii) Using photosynthetic and biological process for energy trapping. In the process of photosynthesis, green plants absorb solar energy and convert it into chemical energy, stored in the form of carbohydrate.

(iii) Converting solar energy in to thermal energy by suitable devices which may be subsequently converted into mechanical, chemical or electrical energy.

Since solar energy is non-ending and its conversion to some other energy form is nonpolluting, attention should be paid for the maximum utilization of solar energy.

2. Wind energy:

Wind is air in motion. The movement of air takes place due to the convection current set out in the atmosphere which is again due to heating of earth’s surface by solar radiation, rotation of earth etc. The movement of air occurs both horizontally and vertically.

The average annual wind density is 3 kW/m²/day along costal lines of Gujarat, western ghat central parts of India which may show a seasonal variation (i.e., in winter it may go up to 10kW/m²/day).]

Since wind has a tremendous amount of energy, its energy can be converted into mechanical or electrical energy using suitable devices, now days, wind energy s converted in to electrical energy which is subsequently used for pumping water, grinding of corns etc. As per available data dearly 20,000 mW of electricity can be generated from wind. In Puri, wind farms are set up which can generate 550 kW of electricity.

3. Tidal energy:

The energy associated with the tides of the Ocean can be converted in to electrical energy. France constructed the first tidal power plant in 1966. India could take up Ocean thermal energy conversion (OTEC) and by the process it will be capable of generating 50,000 mW of electricity, to meet the power requirements of remote oceanic islands and coastal towns. The Netherlands is famous for windmills. In India, Gujarat and Tamil nadu have windmills. The largest wind farm has been set at Kanyakumari which generates 380 mW of electricity.

4. Geothermal energy:

The geothermal energy may be defined as the heat energy obtainable from hot rocks present inside the earth crust. At the deeper region of earth crust, the solid rock gets melted in to magma, due to very high temperature. The magma layer is pushed up due to some geological changes and get concentrated below the earth crust. The places of hot magma concentration at fairly less depth are known as hot spots.

These hot spots are known as sources of geothermal energy. Now a days, efforts are being made to use this energy for generating power and creating refrigeration etc. There are a quite few number of methods of harnessing geothermal energy. Different sites of geothermal energy generation are Puga (Ladakh), Tattapani (Suraguja, M.P.), Cambay Basin (Alkananda Valley, Uttaranchal).

5. Bio-mass based energy:

The organic matters originated from living organisms (plants and animals) like wood, cattle dung, sewage, agricultural wastes etc. are called as biomass. These substances can be burnt to produce heat energy which can be used in the generation of electricity. Thus, the energy produced from the biomass is known as biomass energy.

There are three forms of biomass:

(i) Biomass in traditional form:

Energy is released by direct burning of biomass (e.g. wood, agricultural residue etc.)

(ii) Biomass in nontraditional form:

The biomass may be converted in to some other form of fuel which can release energy. For example carbohydrate can be converted into methanol or ethanol which may be used as a liquid fuel.

(iii) Biomass for domestic use:

When organic matters like cow dung, agricultural wastes, human excreta etc. subjected to bacterial decomposition in presence of water in absence of air, a mixture of CH₄, C0₂, H₂, H₂S etc. is produced. These gases together is known as biogas. The residue left after the removal of biogas is a good source of manure and biogas is used as a good source of non-polluting fuel.

6. Biogas:

Biogas is an important source of energy to meet energy, requirements of rural area. As per given data, around 22,420-million m³ of gas can be produced from the large amount of cow dungs obtained in rural areas in a year. The gas is generated by the action of bacteria on cow dung in absence of air (oxygen). There are two types of biogas plants namely. Fixed done type and floating gas holder type .

These plants are commonly known as Gobar gas plants because the usual raw material is cow dung (Gobar). The methodology involves in the process is to prepare a slurry of cow dung with water. Sometimes form waters can also be added to the slurry.

The slurry is subjected to bacterial decomposition at 35 .C. There are about 330, 00 biogas plants in India. All India dung production is about 11.30 kg per cattle and 11.60 kg per buffalo with about 67.10 m³ of gas per ton of wet dung.

 

7. Petro plants:

In order to release the pressure on mineral oils (a nonrenewable resource), the scientists have discovered some potential plant species from which liquid hydrocarbons can be extracted. The liquid hydrocarbons present in such plants can be converted in to petroleum.

Such plants are known as petro plants which belong to families Apocynaceae, Ascalepiadaceae, Euphrobiaceae; Convolvulaceae and Spontaceae. Still research is on to increase the biomass of the petro plants and effective method of converting their hydrocarbons in petroleum.

8. Dendrothermal energy (Energy plantation):

Due to rapid deforestation and overgrazing, a number of denuded wastelands are formed. On these wastelands, fast growing trees and shrubs may be planted which will provide fuel wood, charcoal, fodder, etc. Through gasification, these plants can produce a lot of energy-

9. Baggasse-based plants:

Bagggasse is generated as a waste product in sugar mills. This can be utilised to produce electrical energy. As per available data, the sugar mills in India can generate about 2000 mW surplus electricity during crushing season.

10. Energy from urban waste:

Sewage and solid municipal wastes can also generate energy on their suitable treatments.

 

 

• Classcial Theories:

1. Halley’s Thermal concept: Indian monsoon is because of contrast between Indian Subcontinent and adjoining Indian Ocean. Halley’s theory, suggested in 1686, considers the summer monsoon to be a regional phenomenon.
2. Aerological concept: This was suggested by R. Scherhag in 1948. According to this theory, monsoon circulation develops due to changes in air temperature at all levels over the Indian Subcontinent and adjoining Indian Ocean.

 

• Modern theories:

1. Dynamic Theory: Flohn (1951) according to Flohn, the monsoon is a global phenomenon due to global shift in pressure belts. The shift in pressure belts bring the ITC much more into the northern margin is around 30 degrees north over the Indian subcontinent. This brings the SE trades over the Indian subcontinent as south westerly monsoons. Similarly, the shift in pressure belts globally when it is winter for the N. Hemisphere pushes the ITC to a little more south of the equator. This brings the sub- tropical high on to the southern slopes of Himalayas and hence the NE trades blow from northeast to southwest as northeast monsoons.

 

2. Tibet and Easterly Jet: P. Koteshwaram and Flohn concluded that heating of Tibet in summer strengthens the monsoonal circulation with an average height of 4Kms above the MSL, Tibetan surface is warmed in summer and generates ascending warm air. The air turns to its right and sinks over the Arabian sea and joins the southwesterly winds there by strengthening the monsoon. This circulation is part of the tropical easterly jet stream.

 

3. Role of Sub- Tropical westerly Jet: The sub-tropical westerly jet normally located on the south slopes of Himalayas and the northeast plains disintegrates in summer due to intense heating of the northern plains and the global shift in pressure belts to the north in summer of the northern hemisphere. This facilities the onset of the monsoon over india by facilitating the development of the monsoon trough.

 

4. The Somali Jet: The offshore areas of Somalia develop clod waters due to upwelling giving birth to the Somali current. The cold waters led to low temperature along Somali coast ( 15 degrees centigrade) whereas along Mumbai, the temperature is 30 degrees cent centigrade. This thermal gradient leads to development of the Somali jet stream blowing from western Arabian sea to the eastern Arabian sea. This adds moisture bearing winds to the southwest monsoon.

 

5. The Monsoon trough: This is the ITC which forms as a huge gash of low pressure from the desert of Arabian to Bay of Bengal. This covers the northern plains and induces the SE trades to cross the equator and give birth the south westerly winds.

 

6. El Nino: The development of El Nino conditions influence the monsoon. During El Nino, the southern oscillation (i.e., the differences in pressure between port  Darwin and Tahiti, French Polynesia). If the southern oscillation is negative, Darwin pressure is higher than Tahiti due to high pressure over Australia, western pacific and adjacent Indian ocean. The high pressure conditions also cover the Indian ocean and the landmass of peninsular India. This prevents the movement of southeast trades towards the landmass of India. If the southern oscillation is positive, Tahiti pressure is more than that of Darwin. Low pressure is over North Australia and over adjacent Indian Ocean. This induces northward movement of southeast trades and hence strengthens monsoonal circulation. The combination of El Nino current (which appears as a warm saline current along the west coast of S. America replacing the cold Humboldt current during a negative El Nino) and the southern oscillation is caused ENSO.

 

Onset of Monsoon

The summer monsoon over the Indian subcontinent first arrives over Kerala situated at the southern tip of the Indian Peninsula around 1st June with a standard deviation of about 7 days. The arrival of the monsoon over the region is noticed by wide spread persistent and heavy rainfall replacing the occasional pre-monsoon rains.

 

Retreat Of Monsoon

This  lasts between September and end of December. This is the season of retreating monsoons. The monsoon trough over the northern plains weakens and begins to shift southward. The retreating monsoon brings rain to coastal Tamil Nadu, Krishna- Godavari delta, region west of Aravallis and to northeast India. The retreat of the monsoon begins on 1^st September (i.e., in Rajasthan), 15^th September in Punjab- Haryana plains, 10^th October from Ganges plains, 1^st December from Tamil Nadu and by 15^th December, the southwest monsoon withdraws from india completely. The retreating monsoon brings rainfall to AP south of Krishna delta and Tamil Nadu. The rainfall in Tamil Nadu in October/November, is 38.25 cms which is about 39% of its annual rainfall while for coastal Tamil Nadu it is 50% of the annual.

This is the season for tropical cyclones that affect the Indian landmass. Cyclones that affect the east coast and the west coast from in the southern portions of the Bay of Bengal, particularly during the retreating monsoon season. Maximum number of that form in the Bay of Bengal form in November. More number of cyclones form in the bay of Bengal than the Arabian sea.

 

 

 

 

 

Role of Foreign Capital and Multinational companies in

Industrial development of India

 

The development of any society or country without economic development is a myth. Economic development brings prosperity which in turns is directly proportional to the amount of goods and services produced quantitatively or in broad sense we can say in money equivalent.

So the factor of production depends on the following parameters.

• Land
• Labour
• Capital

 

 

For a country like India which is the second largest populous country in the world, expected to become most populous by 2050 if population growth is continuing at the current pace, where labour is available in abundance. Similarly, land is also available where more economic prosperity can be brought than the currently pursued economic activity. So after considering all these factors, capital played a crucial role.

 

So to fulfill the aspirations of common masses and general wellbeing of the society various governments are competing against each other to attract the foreign capital.

 

 

 

This theory is particularly gained ground after the Latin American crises which resulted in the Washington consensus/Washington model. This is further ascertained by East Asian miracle. India has also experienced the taste of after economic reforms of 1991, which is better known as LPG reforms. However from the experience of various countries various model of foreign capital and model have emerged. It also requires some kind of reduction regulation and restraint.

 

Why there is a need of foreign capital?

 

Foreign capital is required because of following reasons.

1. Inadequate domestic capital to fuel the economic growth.

Foreign capital is perceived as a resource of filling the gap of the capital scarce country. It helps in maintaining the foreign exchange, accelerating government revenue, planning the investment necessary to achieve development target.

For example ‘savings-investment’ gap

To achieve a planned growth rate of 7 percent per annum and the capital-output ration of 3 percent, rate of saving should be 21 percent. For domestic mobilization of 16 percent, there will be a shortfall of 5 percent. Thus the foremost contribution of foreign capital to national development is its role in filling the resource gap between targeted investment and locally mobilized savings.

 

 

 

2. Stability of Foreign exchange.

Foreign capital is needed to fill the gap between the targeted foreign exchange requirements and those derived from net export earnings plus net public foreign aid. This is generally called the foreign exchange or trade gap.

3. Reducing the Balance of Payment deficit.

An inflow of private foreign capital helps in removing deficit in the balance of payments over time if the foreign-owned enterprise can generate a net positive flow of export earnings.

4. Helps in realizing the estimated tax revenue of government

The third gap that the foreign capital and specifically, foreign investment helps to fill is that between governmental tax revenue and the locally raised taxes. By taxing the profits of the foreign enterprises the governments of developing countries are able to mobilize funds for projects (like energy, infrastructure) that are badly needed for economic development.

5. Foreign investment meets the gap in management, entrepreneurship, technology and skill.

These can be transferred to the host country through suitable training programmes and the processes. Further foreign companies bring with them

 

 

 

sophisticated technological knowledge about production processes while transferring modern machinery equipment to the capital-poor developing countries.

In fact, in this era of globalization, there is a general belief that foreign capital transforms the productive structures of the developing economics leading to high rates of growth. Besides the above, foreign capital, by creating new productive assets, contributes to the generation of employment a prime need of a country like India.

Forms and types of foreign Capital

Foreign capital flow in a country can take place either in the form of investment, concessional assistance, foreign aid.

1. Foreign Investment includes Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) / Foreign Institutional Investment (FII).

FPI includes the amounts raised by Indian corporate through Euro Equities, Global Depository Receipts (GDR’s), and American Depository Receipts (ADR’s).

2. Non-Concessional Assistance mainly includes External Commercial Borrowings (ECB’s), loans from governments of other countries/multilateral agencies on market terms and deposits obtained from Non-Resident Indians (NRIs).

 

 

 

3. Concessional Assistance includes grants and loans obtained at low rates of interest with long maturity periods. Such assistance is generally provided on a bilateral basis or through multilateral agencies like the World Bank, International Monetary Fund (IMF), and International Development Association (IDA) etc.

Grants do not carry any obligation of repayment and are mostly made available to meet some temporary crisis. Foreign Aid can also be received in terms of direct supplies of agricultural commodities or industrial raw materials to overcome temporary shortages in the economy. Foreign Aid may also be given in the form of technical assistance.

 

 

 

 

 

 

 

 

 

 

 

Role of Multinational Corporations in the Indian Economy

Prior to 1991 Multinational companies did not play much role in the Indian economy. In the pre-reform period the Indian economy was dominated by public enterprises.

Earlier Industries and firms are regulated through Industrial Policy, 1956 put some kind of restraint on private firms, as a consequence of which they didn’t able to expand beyond a limit.

While multinational companies played a significant role in the promotion of growth and trade in South-East Asian countries they did not play much role in the Indian economy where import-substitution development strategy was followed. Since 1991, with the adoption of industrial policy of liberalization, privatization

And globalization role of private foreign capital has been recognized as important for rapid growth of the Indian economy. So Multinational corporations have been allowed to operate in India subjected to some regulations.

 

Impact of Multinational countries on the country and general population.

1. Promotion Foreign Investment:

In the recent years, external assistance to developing countries has been declining. This is because the donor developed countries have not been willing to part with a

 

larger proportion of their GDP as assistance to developing countries. MNCs can bridge the gap between the requirements of foreign capital for increasing foreign investment in India.

The liberalized foreign investment pursued since 1991, allows MNCs to make investment in India subject to different ceilings fixed for different industries or projects. However, in some industries 100 per cent export-oriented units (EOUs) can be set up. It may be noted, like domestic investment, foreign investment has also a multiplier effect on income and employment in a country.

For example, the effect of Suzuki firm’s investment in Maruti Udyog manufacturing cars is not confined to income and employment for the workers and employees of Maruti Udyog but goes beyond that. Many workers are employed in dealer firms who sell Maruti cars.

Moreover, many intermediate goods are supplied by Indian suppliers to Maruti Udyog and for this many workers are employed by them to manufacture various parts and components used in Maruti cars. Thus their incomes also go up by investment by a Japanese multinational in Maruti Udyog Limited in India.

2. Non-Debt Creating Capital inflows:

In pre-reform period in India when foreign direct investment by MNCs was discouraged, we relied heavily on external commercial borrowing (ECB) which was of debt-creating capital inflows. This raised the burden of external debt and debt service payments reached an alarming figure of our current account receipts.

 

 

 

This created doubts about our ability to fulfill our debt obligations and there was a flight of capital from

India and this resulted in balance of payments crisis in 1991. As direct foreign investment by multinational corporations represents non-debt creating capital inflows we can avoid the liability of debt-servicing payments. Moreover, the advantage of investment by MNCs lies in the fact that servicing of non-debt capital begins only when the MNC firm reaches the stage of making profits to repatriate Thus, MNCs can play an important role in reducing stress strains and on India’s balance of payments (BOP).

3. Technology Transfer:

Another important role of multinational corporations is that they transfer  sophisticated technology to developing countries which are essential for raising productivity of working class and enable us to start new productive ventures requiring high technology. Whenever, multinational firms set up their subsidiary production units or joint-venture units, they not only import new equipment and machinery embodying new technology but also skills and technical know-how to use the new equipment and machinery.

As a result, the Indian workers and engineers come to know of new superior technology and the way to use it. In India, the corporate sector spends only few resources on Research and Development (R&D). It is the giant multinational

 

 

 

corporate firms (MNCs) which spend a lot on the development of new technologies can greatly benefit the developing countries by transferring the new technology developed by them. Therefore, MNCs can play an important role in the technological up-gradation of the Indian economy.

4. Promotion of Exports:

With globalization and producing products efficiently and therefore with lower costs multinationals can play a significant role in promoting exports of a country in which they invest. For example, the rapid expansion in China’s exports in recent years is due to the large investment made by multinationals in various fields of Chinese industry.

Historically in India, multinationals made large investment in plantations whose products they exported. In recent years, Vistara airlines made a large investment in airline industries with a joint collaboration with Tata Industries.

BrahMos missile is a joint venture of Govt. of India with Russia, which is being sold to Vietnam, will bring income to India.

As a matter of fact until recently, when giving permission to a multinational firm for investment in India, Government granted the permission subject to the condition that the concerned multinational company would export the product so as to earn foreign exchange for India.

 

 

 

However, in case of Pepsi, a famous cold -drink multinational company, while for getting a product license in 1961 to produce Pepsi Cola in India it agreed to export a certain proportion of its product, but later it expressed its inability to do so. Instead, it ultimately agreed to export things other than what it produced such as tea.

5. Investment in Infrastructure:

With a large command over financial resources and their superior ability to raise resources both globally and inside India it is said that multinational corporations could invest in infrastructure such as power projects, modernization of airports and posts, telecommunication.

The investment in infrastructure will give a boost to industrial growth and help in creating income and employment in the India economy. The external economies generated by investment in infrastructure by MNCs will therefore crowd in investment by the indigenous private sector and will therefore stimulate economic growth.

In view of above, Make in India initiative, skill India Initiative, current demographic scenario of India, foreign direct investment (FDI) will be encouraged and actively sought, especially in areas of (a) infrastructure, (b) high technology and (c) exports, and (d) where domestic assets and employment are created on a significant scale