IASbhai Daily Editorial Hunt |Self Reliance in India | 27th May
Don’t wish it were easier. Wish you were better.– Jim Rohn
EDITORIAL HUNT 84:“How India can become self-reliant“
SOURCES: THE HINDU EDITORIAL/EDITORIALS FOR UPSC CSE MAINS 2020
D. Raghunandan is with the Delhi Science Forum, affiliated to the All India People’s Science Network
How India can become self-reliant
There needs to be significant government reinvestment in public sector undertakings and R&D
SYLLABUS COVERED: GS 3: PSU : Economy
Self-reliance of India is a hangover from Nehruvian ‘socialism’ in today’s context of Manufacturing ecosystem. Critically Comment -(GS 3)
This a fabulous article for Mains 2020 explaining key points on how to boost manufacturing ecosystem. You will also learn :
- Why our markets are not competitive ;
- Self Reliance in India
- Experience from different countries
- Which toolkit India should own for Better Manufacturing ecosystem ?
- He said the need was brought home by the absence of domestic production of personal protective equipment (PPE) when COVID-19 struck, but India initiated and quickly ramped up PPE production.
- Mr. Modi said there needs to be improvement in quality and domestic supply chains going forward. If this is to happen though, India will have to make major course changes in development strategies.
- Much has changed since the self-reliance model of the Nehruvian era, so a perspective for Indian self-reliance in science and technology (S&T) and industry in a globalised world is long overdue.
NOT GLOBALLY COMPETITIVE
SELF RELIANCE IN INDIA : State-run heavy industries and strategic sectors in the decades following independence had placed India ahead of most developing countries.
FLAWS IN MODERNIZATION :
- CLIMBING THE LADDER : In the 1970s and 80s, however, India did not modernise these industries to climb higher up the technological ladder.
- PROTECTED MARKETS : The private sector, which had backed the state-run core sector approach in its Bombay Plan, stayed content with near-monopoly conditions in non-core sectors in a protected market.
- LIGHT INDUSTRIES : Little effort was made to modernise light industries or develop contemporary consumer products.
- LESS COMPETITIVE : India’s industrial ecosystem was thus characterised by low productivity, poor quality and low technology, and was globally uncompetitive.
- MISSING OUT THIRD AI : India completely missed out on the ‘third industrial revolution’ comprising electronic goods, micro-processors, personal computers, mobile phones and decentralised manufacturing and global value chains during the so-called lost decade(s).
AUTONOMY AND SCALING :
- DEFINING AUTONOMY : No effort was made to engender either real autonomy or a transition to new technological directions.
- SCALING R & D : PSUs with capability and scale for the task were undermined or abandoned, along with many nascent research and development (R&D) efforts.
- PRIVATE SECTOR ROLE : On the other hand, the private sector displayed little interest in these heavy industries and showed no appetite for technology upgradation.
- RELIANCE ON FOREIGN GOODS : With entry of foreign corporations, most Indian private companies retreated into technology imports or collaborations.
- RE-INVESTMENT : Given the disinclination of most of the private sector towards R&D and high-tech manufacturing, significant government reinvestment in PSUs and R&D is essential for self-reliance.
- DEPENDENCE ON FDI : The idea was that inviting foreign direct investment and manufacturing by foreign majors would bring new technologies into India’s industrial ecosystem, obviating the need for indigenous efforts towards self-reliance.
- TECHNOLOGY VS ABSORPTION : Setting up of manufacturing facilities in India is no guarantee of absorption of technologies (the ability to independently take them to higher levels).
- REAL STIGMA : The key problem of self-reliance is therefore neither external finance nor domestic off-shore manufacturing, but resolute indigenous endeavour including R&D.
EXPERIENCE AND ACHIEVEMENTS IN OTHER COUNTRIES :
- South Korea, in particular, climbed determinedly up the technology ladder and value chains in electronic goods, consumer durables, automobiles, micro-processors, personal computers and heavy machinery.
- Taiwan developed technologies and manufacturing capacities in robotics and micro-processors, while Singapore and Hong Kong adapted advanced technologies in niche areas.
THESE SELF-RELIANT CAPABILITIES NEEDS PLANNED STATE INVESTMENTS IN:
- R&D including basic research (3-5% of GDP),
- Technology and policy support to private corporations,
- Infrastructure and
- Education and skill development (4-6% of GDP).
- Countries like Thailand, Malaysia, Indonesia and Vietnam have focused on off-shore manufacturing lower down the value chain and without the thrust on self-reliance.
CHINESE GROWTH MODEL :
- China is, of course, unique in scale and in its determination to become a superpower not just geopolitically but also in self-reliant S&T and industrial capability.
- China advanced purposefully from low-end mass manufacturing to a dominant role in global supply chains.
- It has now decided on shifting to advanced manufacturing and has set itself a target of becoming a world leader by 2035 in 5G, supercomputing, Internet of Things, artificial intelligence (AI), autonomous vehicles, biotech/pharma and other technologies of the ‘fourth industrial revolution’.
THE WAY FORWARD FOR INDIA
- MISSING BUS : Unfortunately, India may well have missed the bus in many of these technologies in which the U.S., Europe and China have established perhaps insurmountable leads.
- IN REACH : Yet self-reliant capabilities in electric and fuel cell vehicles, electricity storage systems, solar cells and modules, aircraft including UAVs, AI, robotics and automation, biotech/pharma and others are well within reach.
CONCRETE STEPS FOR SELF RELIANCE IN INDIA :
- FUNDING :State-funded R&D, including in basic research, by PSUs and research institutions and universities needs to be scaled-up significantly, well above the dismal 1% of GDP currently.
- REORIENTATION : Upgraded and reoriented PSUs would also be crucial given their distinctive place in the ecosystem.
- REORDER SUPPLY CHAIN : Private sector delivery-oriented R&D could also be supported, linked to meaningful participation in manufacturing at appropriate levels of the supply chain.
- MERGING EDUCATION WITH SKILLS : India’s meagre public expenditure on education needs to be substantially ramped up (as against current trends of privatisation which would only shrink access), including in skill development.
No country has achieved self-reliance without mass quality public education.
And no country has developed without a much stronger public health system than what we have in India.