Wednesday, July 3, 2013: Viability Gap Funding (VGF) is an important term with regards to economic development of a country. This is where the government needs to intervene as it is not financially or logically possible for a contractor to take up road construction or other development work on his own. The current development procedures revolving around solar energy is focusing on energy harnessing and making it a profitable option in the longer run.
The government too has been providing subsidies to encourage people to switch to a more renewable form of power distribution like solar and wind. The ministry of non-conventional energy source has also recently come up with a long term draft policy that offers considerable VGF via bidding processes.
As a part of the Jawaharlal Nehru National Solar Mission, there is a plan to set up a 750 MW power plant. However, all these solar plans are missing out on something very important. Once the winning bidder gets his allocated VGF, there is no binding on the standards of the plant. Cheap solar panels which they would use mostly will offer no real benefits. On the other hand, if solar panels are to be imported from Chinese and American manufacturers, the domestic industry will never grow.
With the US already complaining about poor quality products flooding the markets, the government should now include a condition about the quality of materials used in the power plants as per the VGF policies. It’s time that the government allows the growth of telecommunication based solely from imports of infrastructure.
