New Delhi:

Union Minister Nitin Gadkari, in an exclusive interview with NDTV, spoke about the importance of biofuels in reducing world pollution and making India a carbon-neutral nation.

The Global Biofuels Alliance was launched by Prime Minister Narendra Modi at the 18th G20 Leaders’ Summit in New Delhi yesterday. PM Modi called on countries to join the initiative and set a global target of blending 20% ethanol with petrol.

“The Biofuels Alliance is a historic event that will help us reduce world pollution in a major way,” Mr Gadkari said. “Using ethanol in petrol is a major achievement, and it will be especially helpful for farmers, who can now sell their surplus crop to fuel stations.”

India is increasing its ability to produce biofuels, a renewable energy source derived from organic matter. The country imports more than 85% of its crude oil requirements, so it is looking to reduce its reliance on imported oil by producing biofuels from domestic sources.

The Alliance aims to secure the supply of biofuels, ensure their affordability, and promote sustainable production.

Mr Gadkari, the Union Minister for Road Transport and Highways, also spoke about the importance of green hydrogen in India’s future. 

“Green hydrogen is a futuristic vision for India,” he said. “It has the potential to make our automobile sector the number one in the world.”

In 2009, developed countries pledged to provide $100 billion per year by 2020 to help developing countries combat climate change. However, this never materialised. The Biofuel Alliance being agreed when the G20 presidency is with India, the world’s third-largest oil consumer, is therefore seen as a landmark moment for the country that is being hailed as the voice of the Global South.

“The Biofuel Alliance is a win-win situation for Atmanirbhar Bharat. It will help to reduce air pollution, create jobs, and make India a leader in the production and use of biofuels. The alliance is also aligned with India’s goal of becoming a carbon-neutral country by 2070,” Mr. Gadkari told NDTV.

The launch of the alliance coincides with India, the United States, and several major economies announcing an ambitious India-Middle East-Europe Economic Corridor. 

The initiative, seen by many as a potential alternative to China’s Belt and Road Initiative, was jointly announced by PM Modi and the leaders of the United States, Saudi Arabia, the United Arab Emirates, France, Germany, Italy, and the European Union on the sidelines of the G20 summit.

Once completed, the project can serve as a modern-day Silk Road that functioned as the central trade route facilitating economic partnerships, political alliances, and cultural integration across continents. 
 

New Delhi:

India is pushing for the inclusion of digital public infrastructure (DPI) as a major takeaway from the upcoming G20 summit in New Delhi. 

DPI is a set of essential digital services and technologies that enable countries to deliver economic opportunities and social services to all residents in a safe and efficient manner.

The G20 Global Partnership for Financial Inclusion (GPFI) document, prepared by the World Bank, has praised the transformative impact of DPI in India over the past decade under Prime Minister Narendra Modi’s government.

Praising India’s approach to DPI, the World Bank document notes that India has achieved in just six years what would have taken about five decades.

“In the last decade, India has built one of the world’s largest digital Government-To-Person (G2P) architectures leveraging DPI. This approach has supported transfers amounting to about $361 billion directly to beneficiaries from 53 central government ministries through 312 key schemes. As of March 2022, this had resulted in a total savings of $33 billion, equivalent to nearly 1.14 percent of GDP,” the document notes. 

In May 2023 alone, there were more than 9.41 billion UPI transactions, with a total value of about Rs 14.89 trillion. The total value of UPI transactions for the fiscal year 2022-23 was nearly 50 percent of India’s nominal GDP.

The G20 Leaders’ Summit will be held in New Delhi from September 9-10. The summit will be attended by over 30 heads of state and government, as well as top officials from the European Union and invited guest countries. Fourteen heads of international organizations are also expected to attend.

Rajeev Chandrasekhar, the Union Minister of State for Electronics and Information Technology, told NDTV recently that the government has been making a conscious effort to incorporate technology into governance since 2014. He also stated that the Centre will continue these efforts by connecting all public services to digital infrastructure.

With world leaders converging on the national capital for the G20 summit, India is expected to push for DPI.

“One of the amazing things about India’s presidency of the G20 has been how centre-stage the DPI conversation has become. The India case study and the use of technology under PM Narendra Modi to transform governance, democracy and the lives of Indian citizens… has really caught the attention of all of these countries, including the big, powerful G20 nations,” the minister said. 

Additionally, India is also championing the voice of the Global South at the G20 summit. The country has been pushing for greater representation of developing countries in the G20 process and has called for the inclusion of the African Union as a permanent member.

PM Modi has been a vocal advocate for the inclusion of the African Union in the G20. In June, he wrote to the leaders of the G20 countries, urging them to grant the African Union full membership at the upcoming summit in New Delhi.

The proposal to grant the African Union full membership in the G20 was formally included in the draft communique for the summit during the third G20 Sherpas meeting in Hampi, Karnataka, in July.
 

U.S. Treasury Secretary Janet Yellen addresses the media, ahead of the G-20 Summit in New Delhi, on September 8, 2023.
| Photo Credit: Reuters

U.S. Treasury Secretary Janet Yellen said on September 8 she will work at the G-20 summit in India to build support to increase lending resources for the International Monetary Fund and the World Bank to help member countries deal with multiple global challenges, including new IMF quota resources.

Ms. Yellen said in prepared remarks at a news conference in New Delhi that she will seek to build G-20 support for an “equi-proportional” increase in IMF quota funds paid-in by member countries, which would increase IMF lending resources, but not immediately change its shareholding structure.

G-20 Summit Delhi 2023 September 8 Updates 

On Thursday, Treasury Under Secretary Jay Shambaugh said in Washington that an IMF quota increase that keeps voting power unchanged would speed more resources to countries under financial stress, while IMF shareholders could take more time to work out a complicated new shareholding formula that gives greater weight to dynamic emerging market economies such as India, China and Brazil.

Ms. Yellen also said the United States has asked the U.S. Congress for permission to lend $21 billion to IMF trust funds, including one for the poorest countries, which “desperately needs more resources.”

Ms. Yellen highlighted progress on efforts over the past year by the World Bank and other multilateral development banks to vastly expand lending resources and help tackle climate change, pandemics and other global crises.

Near-term balance sheet changes under consideration could unlock an additional $200 billion over the next decade, she said. More resources could come from medium-term steps recommended by a G20 capital adequacy review, including the use of callable capital that is pledged, but not paid-in, to back lending.

“Those are crucial additional resources for reducing poverty, advancing global health security and combating climate change,” Ms. Yellen said.

Ms. Yellen said she will bring up debt relief for poorer countries, a topic she highlights at every international meeting, particularly where the world’s largest bilateral lender, China, is present.

“We continue to support efforts to provide predictable, orderly and timely debt relief to countries, including under the [G20] Common Framework for Debt Treatment, where progress has been too slow,” Ms. Yellen added.

The U.S. Treasury chief also said she will work to strengthen international support for Ukraine at the G20 gathering, saying it was “critical that we continue to provide timely economic assistance” through such measures as the IMF’s $15.5 billion Ukraine loan program and the European Union’s proposed 50 billion-euro support package through 2027.

Due to the need to counteract food insecurity prompted by Russia’s withdrawal from a Black Sea grain deal, Ms. Yellen called for support for the G20’s Global Agriculture and Food Security program and the UN’s International Fund for Agricultural Development.

U.S. President Joe Biden and India’s Prime Minister Narendra Modi. The U.S. is committed to ensuring that India hosts a successful G20 Summit, the White House has said ahead of Mr. Biden’s departure for New Delhi to attend the global summit and a bilateral meeting with Mr. Modi.
| Photo Credit: Reuters

The U.S. is committed to ensuring that India hosts a successful G20 Summit, the White House has said ahead of President Joe Biden’s departure for New Delhi to attend the global summit and a bilateral meeting with Prime Minister Narendra Modi.

India is hosting the annual G20 Summit in New Delhi on September 9 and 10. Mr. Biden, 80, will travel to New Delhi on September 7 to attend the G20 Leaders’ Summit.

On September 8, the President will participate in a bilateral meeting with Prime Minister Modi and on September 8 and September 9, he will participate in the official sessions of the G20 Summit.

“We commend Prime Minister Modi for his leadership of the G20 this year and we are committed to helping ensure that India has a successful G20 host as they host (the summit) this year,” White House Press Secretary Karine Jean-Pierre told reporters at her daily news conference on September 6.

“So, that’s going to continue to be our commitment. During Prime Minister Modi’s visit here in June, the President (Biden) and the Prime Minister shared their determination to deliver on shared priorities at the summit,” she said in response to a question.

“The President is very much looking forward to continuing that work with the Prime Minister and other leaders later this week as we head out tomorrow,” Ms. Jean-Pierre said.

On Mr. Biden’s bilateral meeting with Mr. Modi, she said, “We are going to have more to share as we get closer to tomorrow…We are committed to making this a successful summit. We’ll certainly have more information to share, certainly on the bilateral with the Prime Minister.”

Official rhetoric on India becoming a $5 trillion dollar economy has resumed, with the Prime Minister’s remarks at the BRICS conference last week. However, these claims are riddled with problems.
| Photo Credit: Reuters

Addressing the BRICS Business Forum Leaders’ Dialogue at Johannesburg last week, Prime Minister Narendra Modi said, “Soon, India will become a $5 trillion economy.” In 2018, a working group under the Ministry of Commerce and Industry set 2025 as a deadline for achieving the same. The economic slowdown induced by the COVID-19 pandemic has upended the target deadline.

With the revival of the economy now, and the general elections on the horizon, official rhetoric on this count has resumed. While addressing the nation on the 77th Independence Day from the Red Fort, Mr. Modi noted that India was the world’s 10th largest economy in 2014, but now stands at fifth spot. He has also invoked a “third term” in office saying that India would be among the world’s top three economies by then.

Even if one ignores the political hubris and sidesteps the serious debate over the methodological rigour of India’s GDP estimates, the problems with the Prime Minister’s economic claims are manifold.

First, Mr. Modi is using nominal Gross Domestic Product (GDP) estimates to make claims about the size of the Indian economy relative to other national economies. This is wrong. Nominal GDP gives an estimate of the national output for a year at the prices prevailing in that year. However, the actual size of the economy is reflected in real GDP, which is adjusted for price changes. In other words, India can become a $5 trillion economy in nominal terms through high inflation, even without any significant changes in the economy’s output. It is for this reason that national governments, the United Nations, and other international agencies such as the World Bank and International Monetary Fund base their economic growth estimates on real GDP (price adjusted) and not nominal GDP (estimated at current market prices).

Second, international comparisons between national GDP estimates get further complicated because of exchange rate conversions. Researchers have long held that market-based exchange rates are not the appropriate way in which national GDPs can be converted into a common currency for comparison because of the existence of a substantial share of non-tradable commodities in national outputs as well as the innate volatility in market-determined exchange rates.

Going by nominal GDP, the Indian economy, valued at $3.39 trillion in 2022, ranked fifth in the world, as Mr. Modi said. However, in terms of real GDP, India’s economy in 2022 was $3 trillion and ranked sixth in the world. PPP-based GDP estimates (in terms of purchasing power parities estimated through price surveys of a common basket of commodities across countries) show that the Indian economy’s size was over $10 trillion in 2022. India’s PPP-based GDP has consistently expanded since the 1990s. India surpassed Germany in 2005 to become the fourth largest economy in the world and Japan in 2009 to become the third largest, a rank that has remained unchanged till date. 

Table 1 | The table shows the rankings for the 10 largest economies in the world in terms of PPP-based GDP, real GDP, and nominal GDP in 2022.

Chart appears incomplete? Click to remove AMP mode.

The third problem with Mr. Modi’s narrative regarding the size of India’s economy attaining new heights under his regime relates to its socioeconomic implications. Studies in economic development start with the premise that per capita income and output are the key indicators of a country’s standard of living, not the total size of the economy. Having surpassed China as the most populous country in the world, India’s per capita income (Gross National Income or GNI) and GDP continue to remain the lowest among all the countries in G-20, as depicted in Table 2. 

Table 2 | The table shows per capita income and GDP per capita for G20 countries.

This means that India is the poorest country in the G20 by per capita income. This is not to deny the importance of economic growth in advancing economic development but to underline the fact that being the most populous country in the world today, India needs to become not just the third largest but the largest economy in the world before it can claim to have attained a dignified living standard for the majority of its people. With almost equal populations in 2021, China’s per capita income (at 2017 prices) was PPP $17,504 while India’s was PPP $6,590; Brazil’s per capita GNI was PPP $14,370 and South Africa’s PPP $12,948.

Chart 3 | The chart shows the pre-tax national income by income groups in BRICS in 2021.

India’s low per capita income is further compounded by the skewed distribution of that income: 21.7% of its pre-tax national income went to the top 1% of the population in 2021 while only 13% went to the bottom 50% of the population (Chart 3). While in Brazil (9.1%) and South Africa (5.8%) the share of national income for the bottom 50% was even lower than India, China (13.7%) and Russia (15.7%) had higher income shares. This unfair reality of the top 1% cornering a disproportionate share of the national income in emerging economies gets concealed by official rhetoric on trillion-dollar GDPs and their growth.

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If India aspires to catch up with China or the U.S. in terms of GDP and per capita income, it needs to move beyond rhetoric and augment resource mobilisation and real investments in physical and human capital to levels much higher than what has been achieved till date.

Prasenjit Bose is an economist and activist. Samiran Sengupta and Soumyadeep Biswas are data analysts at CPERD Pvt Ltd, Kolkata

Source: World Development Indicators Databank, the Huma Development Report 2021-22, and World Inequality Database

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A man rides a bicycle past the hoarding of India’s G20 presidency, on a street in Mumbai, on December 15, 2022.
| Photo Credit: Reuters

The G-20 members stressed on the need to increase climate finance to help farmers take up adaptation measures, agriculture secretary Manoj Ahuja said on Wednesday.

Addressing media on the concluding day of the G20 first Agriculture Deputies’ Meeting here, Mr. Ahuja said: “Climate finance was one of the issues which was discussed. The members felt that there was a need for an environment for increasing the climate financing in terms of financing farmers for adaptation measures.” The member countries also suggested that farmers can be incentivised if they are adopting climate friendly farming or green agriculture. One of the ways was carbon credit, he said.

The G20 nations also shared their experience on impact of climate change in agriculture, he added.

The three-day event of the first G20 Agriculture Deputies Meeting of the Agriculture Working Group (AWG) concluded on Wednesday.

It deliberated on four key priority areas: food security and nutrition; sustainable agriculture with climate smart approach; inclusive agriculture value chain and food supply system; and digitisation of agriculture transformation.

The secretary said the next meetings of the G20 agriculture working group will be held in Chandigarh, Varanasi and Hyderabad.

He also said that 10 more countries will be invited in future meetings on agriculture.