September 7, 2018

Speaking at MOVE: A Global Mobility Summit 2018; Session on Goods Transport & Logistics

I am not one used to reading out speeches, so I landed up my typical off the cuff comments, sometimes not very charitable also, as some of my colleagues experience. But in one of those comments that I made during the award ceremony, I had said that now we should move the needle from what we are doing, the typical ‘my vehicle has 3% better efficiency than yours’ and all those small ticket ideas, around which the award function was revolving, and ‘my design or aerodynamics is slightly better than somebody else’s design’ and stuff like that. ‘I will be faster into Euro-VI or BS-VI compared to the other’ and these were the typical things I heard there.

And I had almost prophetically, I think in retrospect, at that point of time ventured to suggest that India with its low base of car ownership – and I think many speakers this morning resonated almost on similar lines – has an opportunity to leapfrog where the first vehicle that an Indian buys can be an electric vehicle rather than a vehicle that is run on petrol or diesel. And almost without any plan or without any thoughts behind it, I had just ventured to suggest that we should actually be aiming that India leads the world in e-mobility and by 2030, every single vehicle sold in this country is an electric vehicle.

And maybe, if somebody goes back to my Twitter account or my Facebook, you may find that whole award function and my thoughts and comments available on the social media or the Youtube platform. And ever since then, this has been one of those subjects about which I personally have been very passionate, but more importantly, the entire government has worked as a team. And it is not one or two or three departments, it was almost every wing of the government of India was conspiring to achieve some game-changing and transformational results in this story.

So, we had meetings under the leadership of Mr Nitin Gadkari, where several Ministries would get together – Renewable Energy, Power, The Heavy Industries Ministry. Then when we saw that the issue is becoming larger and it’s having dimensions which are multi-dimensional, we got the Niti Aayog into the picture and honourable Prime Minister himself led from the front, as Chairman of Niti Aayog and as the honourable Prime Minister of India, picking out what could be the threads of a revolution in the way we provide for the future of Indian mobility.

And I am delighted that today you have been able to bring together so many stakeholders from different fields of the value chain. I am delighted that you are looking at not only automobiles, but also looking at mobility in a more holistic perspective, which is exactly how it should be. In fact, we have recently decided that we will be bringing all the logistics in the government of India under a common framework, so that we can do more integrated planning under the Ministry of Commerce, which I think Anoop you would be the Chairman of that? It’s not been announced? But have I spoken before turn? But I don’t know, is it already public or have I spoken before turn? Done? Okay!

But we have actually decided that all of us – railways, road transport and entire shipping, aviation – all of us, while we are working in our own individual areas, holistically to plan for the logistics sector and, particularly, with a view to bring down the cost of logistics to more comparable international levels of 7-8% from the 12-13-14% some industries suggest is the cost.

We have created an inter-ministerial group, which will be led by honourable Shri Suresh Prabhu ji, and on an operating level, Mr Vadhavan would be leading and working in consort with all the other Ministries, so that we can really give a thrust to the future of logistics in the country. I see she’s already got a pen and paper out and we have got a news report getting out very quickly.

But truly, I think what we heard today was very-very encouraging in the morning, and I am sure as we… I hope you have a very interactive session during the day. Unfortunately, I won’t be able to sit through the whole period, but I will try to spend as much time as I can before my next meeting. But clearly, we recognize the importance of engaging with technology, moving with the times, or rather, as the honourable Prime Minster suggested, being ahead of the times.

We want India to lead the global effort on e-mobility, somewhat akin to our leadership on the LED light bulbs programme, where thanks to the massive roll-out that India, under Prime Minister’s leadership, took upon itself. And, in fact, our original target on LED bulbs was we bring it down to double digit, which when people asked me what do you mean by double digit? Because they were.. .. how can something which costs Rs 500 or Rs 600 come down to double digits? And even I didn’t know how it would come down, but I had said I want it to be in double digits.

My expectation was ki if I push too hard, तो चलो कम तो होगा, but I didn’t know ki forget double digit, it will fall to 50 bucks a bulb – and high quality bulb supplied by probably some of the world’s best manufacturers. I remember Philips bidding Rs 38 for a 9 watt bulb – Rs 38, about 2 years ago, and it was far beyond even what we had imagined.

But I would like to share with you what in my perspective are going to be some of the principal ingredients, which many companies don’t agree with me, so I have all sorts of people coming and saying continue the same programme for some transitional period, two years, three years, we need some support. To my mind, and you all can deliberate on it during the course of your discussions, the bane of any industry and its success is subsidy. The first thing I did when I took charge of the Power Ministry and the energy efficiency programme, the LED programme, was to remove all subsidies.

I still remember, the LED bulbs used to be procured by government at Rs 310, plus taxes, plus marketing cost, plus distribution cost. It would land up costing Rs 600, they would give a Rs 100 subsidy and sell it for Rs 500. And in the process, all that they would manage to sell was half a million or 600,000 LED bulbs in a year.

The first decision we took was stop the subsidy. Because, after all, the subsidy was becoming the constraint. Suppose I give Rs 100 as a subsidy and finance, ultimately, there will always be a limitation of finance. If they give me a million dollars also, or 10 million or a 100 million dollars, I will at best in a 100 million dollars be able to do 70 million bulbs. But our target was 770 million bulbs to be replaced in India in 4 years, and I am delighted to share with you, without subsidy, with prices having fallen 87%, no compromise on quality or technical specs, increased lumination from 7 watts to 9 watts, from the earlier programme, we have already been able to sell in India between the private sector and the government company which initiated this programme 1.18 billion bulbs in three years and 4 months – 1180 million.

Four years are not yet up. 1st May was the first bulb sold in 2015, so three years and four months and again 770 million, we are 1,180 million already – 118 crore bulbs, at prices which are abysmally low, zero subsidy. So I would urge all of you, we will have to look at economies of scale, we will have to look at the volume gain.

EESL came out with a 10,000 car tender. It was the world’s largest single procurement of e-vehicles. I feel sad that the companies have not yet performed, but I am told one of the companies said they were willing to perform but the charging infrastructure is not up as yet. So, what the purpose of this Mobility Conference and Summit is that we all put on the table our thoughts, bring out the best ideas, and with that prepare a holistic mission or a roadmap how we are going to go forward, what the future holds in terms of a cleaner and better way to provide for mobility in the future.

We saw some of the vehicles outside, the bus is looking pretty fancy, but we will also have to provide public buses. Costs have started coming on, the opex is almost very-very low. And I think if we engage with this business to scale with volume, battery is getting manufactured in India in a big way, the concept of swapping batteries is brilliant when it comes to the larger vehicles. Because, otherwise, we are transporting heavy batteries and actually consuming that battery charge only on transporting extremely heavy batteries. So the swapping should be considered as an  idea going forward wherever it’s feasible and it can be easily maintained.

My vision is that we should have charging stations in every petrol pump in this country, every gas station put up forthwith. In fact, the government is willing to support any such initiative that some of you may come up with and we have about 60,000 gas stations. The length and breadth of the country is covered with gas stations. Imagine if we had 60,000 gas stations with the ability to fast charge different types of vehicles..you are game, the game story is almost sorted. And then add to that parking lots, add to that the fact that most vehicles, particularly, the smaller vehicles can jolly well be just charged in your home. You don’t even need to have charging stations anywhere.

But we can set up large amount of charging infrastructure, government is willing to support that. I was also toying with the idea of if at all a subsidy is required we give low-cost energy and all the charging stations we provide power at cost maybe, we don’t cross-subsidize that power for the farmers and all of that. Let this itself be an important priority sector consumption and keep the cost of power for charging low. That could be another way forward.

To my mind, technology and particularly, the various apps that help people connect and share mobility is also a very exciting idea. For the lesser privileged, I think what was talked about this morning on cycles should be considered, may not directly resonate with your logistics agenda, but you must look at that going forward also. And I think it also has a logistics element in it, because after all the last mile delivery even now, Amazon is still struggling with or I am told, Amazon and Flipkart and all of them, are often still struggling with the last mile delivery. So you could jolly well convert that cycle to a small container at the back like we used to have those wada pavs  being sold and idli and coffee being sold on the small cycle base many-many years ago.

You can jolly well have a small cycle, electric powered small cycle with a 3 feet by 4 feet box at the back for the last mile delivery of the small items and typical groceries and food stuffs and stuffs like that. So there is huge potential, it’s for us to see how quickly we can ramp up. One last point we all saw a lot of presentations in the morning. Let’s not stop at intermediate solutions. We saw the progression from petrol cars to probably hybrids and then all of that. I am extremely sad that there is a campaign going on to promote hybrid cars in this country. And it’s a campaign which is trying to run down electric vehicles in order to promote hybrid cars, and the sad part is that that campaign is being run by companies which don’t make electric cars. To sell their hybrid cars they are willing to compromise with the best, they want us to settle for second-best, just because they don’t make electric cars.

I would urge those companies to quickly make electric cars and come to the Indian market, if you want a share of the pie or the big opportunity here. Don’t try to hawk a second-best product to India. Gone are the days that India will settle for anything second-best. We want nothing but the best. I am happy to look at the fuel cell cars, that’s something which you should study.

And I myself have two hybrid cars, so I can say it with authority they are beautiful cars, they are lovely cars, soundless and extremely good. But no saving whatsoever, it must be saving my petrol 10% or 15%, which doesn’t even show up anywhere. So, I think, to my mind, let’s look for the best, let’s look for what is the latest, let’s look at scale, move out of the psychology and the psyche of subsidies and grants and government handholding everything. Let’s try and engage with the latest of technologies, so that we can get the best … for every buck that people spend from their pocket.

And all in all, our effort should be that considering India’s cost dynamics, considering the fact that India and the people of India deserve the best at affordable prices, we must come up with workable solutions, leverage the large market opportunity that is not available anywhere else in the world. Most developed countries have to replaced existing cars or vehicles with a new electric vehicle so there is a cost of what you are going to lose out, whereas in India, we don’t have that added cost.

And let’s scale technology, domestic manufacturing, which also has cost advantages. Let these become the drivers of our programme, and I would think that the aim should continue to be that India moves to a completely 100% manufacturer of electric vehicles by 2030. We should look at engaging more and more to get the logistics cost down to 7 or 8%, which is I think the long-term objective. And we must all of us look at the most modern equipment and modern technologies, and just never settle for second-best, because the youth of India, the future of India is watching what we are doing.

And I would not like any of us ever, and at least we have many youngsters here, but at least Amitabh and Vinesh and Anil and me and Anoop, we don’t want to be blamed by all of you youngsters that we left behind anything but the best for all of you. This one is for all the youth of India.

Thank you.

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