A worker uses the torch function of a mobile phone as he unloads stacks of hay from a tractor trailer at night in a village on the outskirts of Alwar, Rajasthan, India, on Tuesday, April 17, 2018. Rural electrification is a cornerstone of the Indian Prime Minister Narendra Modi's plan to improve the lives of Indians, a plan which included connecting more than 18,000 villages by the end of this month. Anindito Mukherjee / Bloomberg
A worker uses the torch function of a mobile phone as he unloads stacks of hay from a tractor trailer at night in a village on the outskirts of Alwar, Rajasthan, India, on Tuesday, April 17, 2018. RurShow more

Modi’s electricity promise has dim returns for hundreds of thousands in India



The tiny village of Leisang, in India’s north-eastern state of Manipur, sits near a bend of the Tuitha river, surrounded by fields and woods. On Saturday, its residents – numbering just 224 according to the last Indian census in 2011 – enjoyed a brief moment of fame.

Prime Minister Narendra Modi announced on Twitter that Leisang had become the last Indian village to be connected to the country’s power grid. He included photographs of men hauling solar panels and electrical equipment through scrubland and across streams.

“We fulfilled a commitment due to which the lives of several Indians will be transformed forever!” Mr Modi tweeted. “I am delighted that every single village of India now has access to electricity”.

Mr Modi was referring to his promise, made in a speech on August 15, 2015, that every Indian village would be electrified within 1,000 days. That deadline would have elapsed on May 10.

India has 597,464 villages, according to the 2011 census, and World Bank data from 2016 say roughly 67 per cent of the country’s population of 1.3 billion lives in these villages.

As of 2014, roughly 270 million Indians were living without access to the power, according to a World Bank report released last year. Indians made up nearly a third of the world’s 1.06bn people who lived without access to electricity.

Mr Modi’s government hailed its own success in pushing the power grid out to every Indian village. Piyush Goyal, India’s Coal Minister, tweeted satellite views of India at night from 2012 and 2016, pointing to how much brighter the country’s illumination had become over those four years.

But the numbers behind Mr Modi’s electrification thrust tell a different story.

After the Bharatiya Janata Party (BJP) won the parliamentary election in May 2014, Mr Modi became prime minister. By that time, nearly 97 per cent of India’s 597,464 villages were already hooked up to the grid, according to government data. Over the last four years, the government only electrified the remaining 18,452 villages.

In the 10 years between 2004 and 2014 the previous government, led by the Congress party that now forms the opposition, had pushed the proportion of electrified Indian villages up from 79 per cent in 2004.

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Randeep Singh Surjewala, a Congress spokesman, accused the BJP on Sunday of taking “fake credit” for completing India’s electrification.

In response to the boastful tweets from Mr Modi and other BJP leaders, several Twitter users rebutted the government’s claim, arguing that their own villages still remained dark.

“My village #Panditpur [in Bihar] not electrified yet,” a user named Shephali Thakur wrote. “For me, Light Up India mission [is] not yet complete.”

One Twitter user, Jiwan Lal Rajput, pointed out that many villages near his home district in Jammu and Kashmir remained unelectrified. Another social media user, Dilip Gupta, cited Allipur, his remote village in Uttar Pradesh, saying that the grid “hasn’t arrived yet”.

Even with every Indian village apparently connected to the grid, there may still be millions of people living without electricity.

The government deems a village to be electrified if a power transformer is in place there and if 10 per cent of the houses are connected to the grid. This definition precedes Mr Modi’s accession to power.

An online dashboard, maintained by the government, shows that fewer than 8 per cent of the 18,452 villages electrified in the last four years can boast of running power lines to every home.

Access to electricity varies across the country as well. Prosperous states like Gujarat, Kerala and Tamil Nadu have been able to wire nearly every house to the grid. On the other hand, in Jharkhand, 52.4 per cent of households have no electricity supply – the highest in the country.

Last year, Mr Modi announced $2.5bn in funding to ensure that every house has a supply of power by March 2019 – just in time for the next parliamentary election. But the challenge will be steep. As of October, 36.8m houses across India needed electricity; last week, government data showed that only 13 per cent of those houses had since been wired.

The quality of power is also a concern, as power cuts and voltage fluctuations are common across the country. The government has set 2022 as its deadline to provide uninterrupted electricity but, for now, the returns on the Modi pledge appear to be dim for many across the country.

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Quick pearls of wisdom

Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”

Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.” 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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