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Indian Economic Policy

Notes considered and the use of coal in power generation has been excluded. But it is important to remember
that about 65 per cent of the total coal produced in India is used for thermal power generation.
Trends in the production of commercial energy since 1950-51

As energy is an essential input for economic development, the production and the consumption of
commercial energy has increased steadily after the introduction of economic planning in 1950-51.
Between 1951 and 2007, coal production had increased by nearly 14 times, crude oil production by
120 times and electricity (installed capacity) by over 106 times.

Table 4 : Growth of Commercial energy since 1950-51
1950-51 1970-71 2009-10

Coal (m. tonnes) 33 76 566
Oil crude (m. tonnes) 0.3 7 33.7
Electricity*
Installed Capacity (000MW) 2.3 16.3 188
Generation (billion kwh) 7 61 877.5

*(Utilities and non-utilities)
Source : Economic Survey, 2010-11

Rural Energy Crisis and Decentralised Energy

The conventional energy systems, based on fossil fuels such as oil crude and coal and electricity
(rural electrification) have miserably failed to solve the rural energy crisis, in India. This may at any
time, provoke “fuelwood riots” similar to the food riots of the late 1950’s and early 1960’s. The problem
of rural energy supplies calls for a radically new approach known as the “decentralised energy”
approach which seeks to supply energy from the locally available renewable sources like the cowdung
and agro-wastes. In other words, attempt has to be made to supply commercial energy based on the
traditional non-commercial energy forms.
Firewood is obviously the most important cooking fuel and will remain so for a long time. With the
rise in the price of fossil fuel (of kerosene and of LPG) and their non-availability, people in urban
areas have come to depend increasingly upon firewood. There is an acute shortage of firewood and
consequent rise in the price of fuelwood. Contrary to the common belief, there is no shortage of land
in India to produce even two to three times the fuelwood requirements. The Planning Commission
Fuelwood Study Committee estimated that some 240 million tonnes of fuelwood (as against the present
demand of 133 to 140 million tonnes) can be produced every year, through :
(a) fuelwood on farm lands : Growing trees farm lands as shelter belts, windbreaks, shade trees,
fodder trees and fruit trees, all of which will produce’ fuelwood;
(b) fuelwood on wastelands : Growing fuel-wood on nearly 80 million hectares of barren and
waste lands including land along the country’s roads, railway lines, canals etc.—even if 15 per
cent of this vast tract of land is planted with fuelwood species, estimated yield would be 95 to
100 million tonnes per year; and
(c) fuelwood degraded forests : proper protection of degraded forests and afforestation through
fuelwood trees can supply about 50 million tonnes of fuelwood per year.
Really speaking, therefore, the problem of fire-wood famine can be successfully tackled, if the Government
is prepared to mobilise sufficient financial resources—about ` 800 to ` 1,000 crores a year—and is
willing to change the present forest policy from timber production to the production of fuel and fodder.
Such an effort is worth attempting since this would not only solve the acute problem of fuelwood in
both rural and urban areas but also help promote employment in a big way, in planting, maintenance,
in felling of trees, in processing of wood, etc. Moreover, it will have a favourable ecological effect
through increase in tree cover, control of floods and of soil erosion and of promoting soil fertility.

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