XKDR Newsletter - Issue 22
Solarisation in agriculture • Asset monetisation • Offshore wind energy • Cybersecurity threats & firms • Survey of court users • Trade patterns in 3rd globalisation • Asset pricing • Public contracts
Solarisation in agriculture in Tamil Nadu: A first principles evaluation
The issue of highly subsidized electricity for farmers is a significant challenge in the electricity sector. However, with the decreasing costs of solar panels, there's an opportunity for governments to subsidize farmers in installing solar panels. This could possibly have several benefits including:
Reduction in fiscal burden due to lower subsidy costs.
Decrease in pricing distortions in electricity for other consumers.
Farmers can earn revenue by selling surplus electricity to the grid.
Improved management of groundwater as farmers would have an opportunity cost for using electricity, potentially reducing the "tragedy of the commons.
However, the outcomes depend on various factors such as insolation, water extraction needs, solar panel costs, and grid prices. In their recent paper, Susan Das, Renuka Sane, and Ajay Shah evaluate the potential of solarization in agriculture, with a focus on Erode district in Tamil Nadu. Their findings suggest that there could be efficiency gains for the grid if surplus energy that comes from the farmer to the discom, is sold at high prices. When augmented with lower panel costs, it could further enhance the viability of solarization.
While the study is specific to Erode, the methods used can be applied elsewhere in India, with results likely varying across regions.
Read the full paper here.
The difficulties of asset monetisation in the transmission sector
The transition to renewables requires vast transformations in transmission capacity, financed by public and private capital. A new asset monetisation model, Acquire, Operate, Maintain and Transfer (AOMT) model, was introduced by the Ministry of Power in October 2022 for monetising state-level transmission assets. This has had no takers so far. In their article on the Leap Blog, Akshay Jaitly, Charmi Mehta, Rishika Ranga and Ajay Shah explore lessons from the journey of asset monetisation across Indian Infrastructure. They evaluate the AOMT model against the Toll Operate Transfer (TOT) model in Indian Highways and the Investment Trust (InvIT) model in the transmission sector and highlight the difficulties in using the AOMT model.
Read the full article here.
Evaluating capital market responses to cybersecurity incidents in Indian listed companies
In their article on the Leap Blog, Sayan Dasgupta, Renuka Sane and Karthik Suresh explore the financial and reputational consequences of a cybersecurity breach at an Indian firm. They use the CISSM Cyber Attacks Database and Data Breach Investigations Report to collate instances of cybersecurity incidents and the CMIE Prowess data for stock prices. They find that there was a significant negative effect on stock prices after cybersecurity incidents. Their article informs the debate on the question of “material” information in light of SEBI's recent regulatory changes which require detailed reporting of cybersecurity incidents.
Read the full article here.
Offshore wind in Tamil Nadu: from potential to reality
The renewables sector primarily relies on solar and wind energy. While solar electricity faces limitations as it diminishes in the evening, wind, especially offshore wind, offers several advantages such as higher and more consistent wind speeds, lesser land requirements, no noise pollution, and potential for higher energy generation. In their article, Akshay Jaitly, Charmi Mehta, Renuka Sane and Ajay Shah, analyse the current state of offshore wind production in India, the potential gaps and challenges and offer policy pathways for the way forward.
Read the full article here.
Survey-based measurement of Indian courts
Citizen surveys are commonly used to assess the quality and impact of public services such as health and education. In the legal system, perception surveys of court users can help in measuring the performance of the entire legal system, and in assessing the impact of interventions made for reforming the system.
Pavithra Manivannan, Susan Thomas and Bhargavi Zaveri-Shah, designed and administered two surveys to capture the performance of debt recovery courts in India. They surveyed 'repeat users' (eg. lawyers, serial litigants) on their experience of five forums in Bombay - the High Court, the National Company Law Tribunal, the Debt Recovery Tribunal, Alternative Dispute Resolution & the Metropolitan Magistrate Courts. The survey required the participants to rank the courts on 5 parameters that matter to end-users: efficiency, fairness, predictability, enforceability and access.
Read the full article here. The survey questionnaire can be accessed here.
OP-ED & COMMENTARY
The first and second globalisation were largely characterized by unrestricted access to advanced economies. However, the current “third globalization” imposes conditions based on foreign policy alignment. In his article for the Business Standard, Ajay Shah writes about the shifting patterns of trade and foreign direct investments, that pose challenges for Indian foreign policy and necessitates strategic considerations for firms, particularly in understanding political dynamics and risks associated with engaging in undemocratic countries.
In his column in the Business Standard, Ajay Shah writes on the increasing correlation between Nifty and the S&P 500 in recent decades due to real sector and financial integration, and the implications for various economic actors. He argues that, foreign investors now need to look beyond the Nifty 50, and private equity and venture capital funds might be a useful point of access. Indian investors should look for firms expecting to make the jump from domestic to global asset pricing in the coming decade.
VIDEOS AND PODCASTS
New episodes of Ajay Shah’s YouTube show Everything is Everything with Amit Varma are out:
The Reformers: Ep 28
Five epic stories that must be films: Ep 29
Declutter: Ep 30
A deep dive into the Indian Military: Ep 31
EVENTS
Statistics and Computer Science
We hosted the Bombay Julia Meetup #3 on January 5th:
Viral Shah, Co-founder & CEO, JuliaHub, delivered a presentation on the latest updates in Julia language version 1.10.
Sourish Das, Associate Professor, Chennai Mathematical Institute, shared insights into his work on Jacobi priors.
Siddarth Raman discussed the advantages of leveraging Julia for legal system applications.
Siddhant Bharti presented the application of Automatic Differentiation in credit risk modelling within Julia.
Public Finance
As part of our monthly seminar series in collaboration with TrustBridge Rule of Law Foundation on contracts and contract performance, on January 30th:
Ashok Pal Singh, ex Government of India, discussed: What makes IT contracting work in the Indian government? An analysis of UIDAI's procurement choices.
Madhav Goel, Visiting Fellow, TrustBridge presented their work on varying challenges to arbitration awards across government and the private sector.
Legal System
We hosted Seminar #6 of the Indian Legal System Reform on January 31st. In this event:
Tasneem Deo, J.S.D. Yale and Visiting Faculty, National Law School of India University, Bangalore, presented her work on The Impact of Gender on Judicial Decision-Making in India: Studying the Treatment of Female Defendants in Criminal Trials before the Delhi High Court.
Pavithra Manivannan and Mugdha Mohapatra presented a time and motion analysis of 4 Indian district courts based on their experience from the field.
We welcome your comments and suggestions on our work. Please write them to pavithra.manivannan4@gmail.com. To know more about our work and to collaborate with us visit xkdr.org.