Prime Minister Narendra Modi’s plan for the third term involves some bold moves, including a radical blueprint to enable free electricity to all powered by solar panels in every household, a plan, when executed on scale, can dramatically lower India’s over-dependence on imported energy and polluting fossil fuels.
There is also an important subtext in the focus on solar energy: Increasing self-reliance on energy sources can progressively reduce the dependence on the dollar and hedge the Indian economy from the risks of leaning too heavily on the dollar, which is primarily driven by crude oil import requirements.
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The Prime Minister, in an exclusive interview to News18 Group Editor-in-Chief Rahul Joshi, News18 Kannada Editor, Hariprasad, and News18 Lokmat Anchor Vilas Bade, laid out the plans that could also trigger a rapid transformation in India’s automobile sector, accelerating the transition towards electric vehicles as collapsing electricity costs dramatically lower running costs.
“My aim is PM Surya Ghar Yojana and zero electricity bill. I want solar panels in every household,” Modi said, underpinning the emphasis on easy access and availability of affordable electricity as part of a plan to dismantle a key infrastructure barrier that holds back potential economic opportunities for millions of households.
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This marks a significant shift in focus from the previously stated goal of electricity for all, to the next phase of zero electricity bill for all, demonstrating the government’s intent to walk the talk on setting the bar high on establishing India as a global pioneer on energy-tech executed on scale.
“I just don’t want electricity bills to be zero, but I want three things. One, every household’s power bill should be zero; second, we should sell surplus electricity and earn money; and third, I want to be self-reliant in the energy sector as the era of electric vehicles will come. This is why I would like that whoever has a scooter or car should be able to charge it at home using solar energy. This means the transportation cost of Rs 1,000-Rs 2,000 per month for the person should also become zero”, he said.
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On January 22, Prime Minister Narendra Modi said his first decision after returning from Ayodhya following the consecration ceremony at the Ram temple would be to launch a new rooftop solar scheme to be implemented in 10 million houses across the country.
Soon after, Finance Minister Nirmala Sitharaman said in the interim Budget on February 1 that the new scheme could result in savings of Rs 15,000-18,000 annually for households that install rooftop solar systems.
On February 13, PM Modi renamed the new rooftop solar scheme as ‘PM Surya Ghar: Muft Bijli Yojana’. He said the initiative, with an investment of over Rs 75,000 crore, would provide up to 300 units of free electricity every month.
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The Prime Minister sees India’s rapid adoption of solar energy as not just a means to democratising access to power, but also as something that can activate strong economic multipliers, besides ensuring India’s net zero goals.
“This will benefit the citizens and the country will get the benefit of a clean environment. The billions of dollars that are being spent on importing petroleum will stop. So, it’s a scheme with multiple benefits. I want to make a start-up hub, manufacturing hub, innovation hub,” he said.
Besides, India’s over-dependence on imported crude oil to drive the domestic economy has maintained a very heavy reliance on the dollar bringing along with the attendant risks.
Rising demand for fuel and other petroleum products amid flagging domestic crude oil output has resulted in India’s reliance on imported crude increasing to a record 87.3 percent of domestic consumption in 2022-23, up from 85.5 percent in 2021-22.
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India’s oil import dependency was 84.4 percent in 2020-21, 85 percent in 2019-20, and 83.8 percent in 2018-19. India’s crude import bill expanded to $158 billion in 2022-23 from $121 billion in the previous year. In volume terms, crude imports increased to 232.4 million tonnes in 2022-23 from 212.43 million tonnes. While the volume of crude oil imports grew by 9.4 percent, India’s crude oil import bill soared nearly 31 percent.
Governments and currency administrators are increasingly realising the risks associated with over-dependence on the dollar.
For instance, the strengthening of the dollar often knocks up prices in India. India imports nearly 88 per cent of its requirements of crude oil, which is priced in dollars. A stronger dollar pushes up the landed cost of crude oil, which raises petrol and diesel prices, fanning inflation by raising commuting and transportation costs.
Widespread adoption of affordable solar energy installed at scale can well be the right path to decouple India’s growth ambitions from the dependence on imported crude and the dollar.
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