ias-toppers-electrification-in-india
Editorial Notes

Editorial Notes 4th November 2016

Electrification: National Trend; Sustainable Development Goals; What is behavioural science? What is the need of behavioural science in policy making? What is nudging?
By IT's Editorial Notes Team
November 04, 2016
GS (M) Paper-3: “Science and Technology- developments and their applications and effects in everyday life”
GS (M) Paper-2: “Important aspects of governance, transparency and accountability”

 

Going beyond technological fixes

ias-toppers-behavioural-science-unit

Introduction:

The NITI Aayog has decided to come up with a behavioural science unit as part of planning strategy.

What is behavioural science?

  • The term behavioural science involves the systematic analysis and investigation of human and other animal behaviour through controlled and naturalistic observation, and disciplined scientific experimentation.
  • Examples of behavioural sciences include psychology, psychobiology, and cognitive science.
  • Developed countries such as the US, UK, Australia and Singapore have full-fledged behavioural sciences teams closely working with the government.
  • They aim to make policies cost effective, easy to understand and help people make better choices for themselves.

What is the need of behavioural science in policy making?

  • The assumption of rationality that the standard economic theories propose is only partially true.
  • Humans not always reveal their preferences consistently or take decision that maximises their satisfaction and in their best interest.
  • For example, many economic-models assume human to be a rational economic man one who acts rationally and with complete knowledge, but entirely out of self-interest and the quest to maximize personal utility but this not always a case because many of our decisions are often based on emotions rather than rationalization.
  • There are number of factors that affect how we decide among choice, and this has been a theme of intense research in the past four decades leading to the birth of behavioural economics.
  • We nearly always choose short term over long term, have bounded rationality and go terribly wrong in assessing risks in high stakes situations.
  • In the hundreds of situations that we encounter every day, our short term approach leads to inherent biases, prejudices and miscalculations. Often, we are unable to think about what is in our best interest.
  • These behavioural fallacies have severe costs in public policy implementation especially in social policies aimed at welfare.
  • Sometimes, even the well intentioned policies of the government remains ineffective due to a number of unforeseen circumstances especially that of public perception, collective social norms and behaviour.
  • Savings plan remain unused, toilets appear less appealing with wide practice of open defecation, immunisation initiatives even when offered free has no takers.
  • In this scenario, a more scientifically approached policy design can be an inexpensive and creative tool in the hands of government.
  • To help us make better choices and to solve the above problems behavioural economists have discovered a tool called ‘nudging’.

What is nudging?

  • Nudging is effectively prompting us to take a desirable choice out of the many options we face by altering the design of choice.
  • For instance, in a pension plan that makes saving the ‘default’ option, more people are likely to stick with default plan over and above all other choices, making them wealthier in the long term.Here ‘default option’ is the nudge.
  • Similarly, an example from Rajasthan village shows, in an immunisation programme, incentivising mothers with lentils as free gift nudged more children from benefiting from the programme.
  • These are examples where we are encouraged to choose based on mild incentives rather than more punitive policy options such as penalties or taxation. These nudges are sensitive to how our behaviour is flawed against rational, sensible choices.

Challenges in India:

In addition to the failure of the citizen to make informed choices, there are three main challenges in the Indian context.

  • Inadequate economic growth and development with serious inadequacy in infrastructure. Both educated public and effective infrastructure serve as the backbone of a successful nudge plan.
  • Diversity – In a vastly diverse country like India, the contexts and social norms are so locally specific that a broad generic nudge from the centre is likely to be ineffective. The behavioural team will have to come up with creative thinking on reaching the larger audience through a universal approach that is flexible to cater to the local specificities.
  • Against Liberalism – Creating choice architectures that nudges us to choose one option over another is ‘paternalistic’ in that choices are being made for us.This could run against the liberalism that gives us the freedom to choose rather than treat us like infants.
  • However, wider education on the policy approaches taken and deliberation about its desirability within the democratic set up will help us take a genuine departure towards an inclusive participatory policy making.
  • Nudging has potential to be the policy that is inexpensive, easy to understand and in the best interests of the largest number of people in our society.
[Ref: Business Line]

 

GS (M) Paper-3: “Infrastructure: Energy”

 

Addressing energy poverty in India

ias-toppers-electrification-in-india

Sustainable Development Goals:

  • Sustainable Development Goals are a set of 17 goals that are intended to improve lives across the world by 2030.
  • A major goal is SDG7 which aims to ensure universal access to affordable, reliable and sustainable energy.
  • Mainstreaming SDG7 would vary across countries, and it is important to develop national priorities in alignment with the SDGs.
  • Access to electricity and cleaner cooking were the two important factors of SDG7.

Electrification in a slower pace

  • Government estimates suggest that there are about 58 million un-electrified households, and these households will be covered under ‘Power for All’ by 2019.
  • With the decadal population growth, the annual growth of rural households is estimated at approximately 2 per cent, while the average annual growth in the number of households being electrified is around 3 per cent.
  • However, it appears from Grameen Vidyutikaran data, that the annual growth of households since the last census in 2011 has not been taken into consideration.
  • If we consider annual growth, the number of un-electrified households is almost 23 per cent higher. This clearly indicates that the pace of household electrification is much slower than desired.

Electrification: National trend

  • Census and GARV data for States indicate that the access rate in Madhya Pradesh dropped from 62 per cent in 2001 to around 57 per cent in 2016.
  • In Assam, household electrification increased by a mere 1 per cent from 2001 to 2016 and is now at 35 per cent.
  • On the other hand, West Bengal grew from 20 per cent in 2001 to 95 per cent in 2016.

Concerns: 

  • The key challenge is to connect and sustain un-electrified households in the low progress states; the households are mostly in villages where the grid infrastructure may already be present.
  • Often, government records may not truly reflect the social structure. There are several unelectrified hamlets where only the main village has electricity and the hamlets are shown as electrified.
  • Such habitations need to be identified and covered under government schemes or through renewable energy-based mini-grids involving the private sector.
  • However, the private sector has to be adequately incentivised.

Need for Financial support:

  • The progress on village electrification has been relatively fast with slow intensification.
  • In most villages, there is a thin line between below poverty line households, who are provided free connections, and above poverty line households.
  • One way to bridge this could be to finance the wiring, metering and connection costs of households that are interested but do not have the financial means.
  • Another option could be to use the deprivation framework of the Socio-Economic and Caste Census to select households for subsidised

 Cleaner cooking fuel:

  • Another important aspect of SDG7 is to ensure access to clean cooking options.
  • The Government launched the UJWALA scheme to provide 50 million underprivileged households with LPG. But a deeper analysis, however, raises concerns in the statistics.
  • While UJWALA has made considerable progress, TERI studies indicate fuel stacking is a major issue in most villages.

Lower household income – major impediment:

  • Most families tend to use LPG for emergency cooking rather than for cooking their major meals.
  • The reason for this could be the higher expenses incurred for using commercial fuels. Considering the subsidised price of an LPG cylinder, a family of 5-6 may have to spend around ₹500 a month to cook their meals.
  • With nearly three-quarters of all rural households earning ₹5,000 or less, spending anything above 10 per cent of total income on fuel will make them energy-poor.
  • All households have to be provided with cleaner fuels to reduce household air pollution, but it is also equally important to ensure a substantial increase in rural income so that part of the added income is used to meet clean energy needs.

Suggestions & conclusion:

  • The promotion of LPG should be complemented by that of electric induction cook stoves. Both cost and fuel expenditure in the case of induction cook stoves are almost the same as for LPG.
  • Using induction cook stoves will ensure optimal use of the electricity infrastructure being created.
  • With most power plants presently running at a lower capacity than their potential, electrifying the cooking energy demand will ensure higher plant load factor, better revenue sustainability for discoms and prevent cost towards creating a supply chain for cooking fuel.
  • Energy-efficient cook stoves can also be promoted. With higher efficiency, lower electricity consumption and no emission of harmful pollutants, this will be a viable rural solution towards achieving SDG7.
[Ref: Business Line]

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