Conclusions and policy recommendations R. K. Sinha


Technology Optimistic scenario



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Technology




Optimistic scenario

John Kenneth Galbraith has said that the future society is one in which science and technology will determine the direction of socio-economic changes. India in 2025 would be in a position to share the dias with the industrialised nations in relation to technological prowess. Since the capability to generate and apply technologies would be the cornerstone for advanced industrial societies, India in 2025 would have developed its technological capabilities through a quantum jump in its human skills, institutions and an overbearing national commitment for achieving the goals.


Dr. A P J Abdul Kalam along with Y S Rajan has outlined the Vision-2020 for India in a book titled India-2020 (1998, published in Viking by Penguin Books India Ltd.). What has been stated of 2020 will, in all likelihood, be equally true, under the optimistic scenario, for 2025. The optimistic scenario that has been developed and the vision outlined by Dr Kalam are, by and large, on similar lines.
The technology vision statement speaks of India competing ably and thriving in the world economy by innovating, manufacturing and trading high quality and high-tech products across international boundaries by:

  • Training the engineers and technologists to international standards,

  • Encouraging them to innovate by rewarding them and their institutions with both real and psychic income,

  • Integrating technology with cultural, social and economic development processes, and

  • maximizing employment through appropriate technologies.

It also speaks of India emerging as a major proprietor of intellectual products.
The vision statement gives the parameters of the optimistic scenario. To achieve this vision, Indian technology and industry would have to be internationally competitive so as not to require ordinarily any trade protection. India would be a net importer of talented people for sustained technological competitiveness. Technology would be deployed to promote good quality of life for the people of India. It would be used to a) minimise disparities by reducing poverty and not wealth, b) maximise employment by matching skills to the requirements of innovation and c) making India self-reliant in selective areas of technology in order to avoid import under duress.
Cognitive skills would be central to the skill profile of the modern worker, technicians and scientists. Higher order transferable skills of reasoning, conceptualisation, communication, problem-solving, inter-personal relationships would be necessary. There would also be a need for higher education and training for broad-based generic skill development. Innovate or perish would be the creed. The technical institutions and centers of excellence in science and technology would be fully geared to deliver on the stringent requirements of skill development.

Microelectronics, information technologies, biotechnologies, advanced new materials technologies and new energy technologies would be the focus of development in the coming years. These are interdisciplinary, heavily dependent on R&D, have high obsolescence, impinge on each other, are information intensive with greater demand on human capital and need greater proportion of highly skilled persons.


There would be strong and lasting linkages between the R&D laboratories, academia and the industry. Technological ideas and innovations developed in the R&D laboratories and by the academia would increasingly drive industrial activities. India would see the development and growth of new ideas, new innovations and new industrial activities. It would be a knowledge-based economy by 2025, which would be the envy of some industrialised nations as well, apart from the other developing countries. From the present level of 1.2 scientists and technicians per 1000 population, India would expand to levels comparable to at least that of some of the developed and the newly industrialised countries of the world. While there would be some increase in government contribution to R&D from the present level of 0.6 – 0.7% of GNP to a little less than 1% of GNP, the contribution of the industry would register very substantial increases.Indian industry would realise the importance of knowledge in international competition, and invest substantially in R&D There would be a quantum jump in the establishment of Science and Technology Entrepreneurship Parks (STEP). These will not only be attached to an increasing number of engineering colleges but would also be established on a stand-alone basis by enterprising entrepreneurs in the private sector. These will have facilities comparable to the best in the world. There would also be a significant proliferation of the Electronics Parks in the public as well as the private sectors.
India has vast human resources- skilled, unskilled and creative- knowledge intensive industries, extensive span of basic services, vast coastline, reservoirs of minerals, biological and bio-diversity related natural resources and ancient and traditional knowledge. Networking between these resources for value addition would be considerably strengthened. Institutions and systems would be in position to integrate and coordinate related technology development activities by the academia, R&D laboratories, government and industrial organisations.
Food security assumes over-riding priority particularly because of the burgeoning population. As stated earlier, our population is likely to grow from 1.027 billion in 2001 to 1.380 billion in 2025, roughly around 1.4 billion. There would be additional about 400 million mouths to be fed. In addition, with the expected economic development, consumption pattern would change and also register definite increases in the total quantities consumed. Biotechnology in relation to seeds, plants, soil treatment etc. would be harnessed in all its aspects. Transgenic plants tailored to meet the desired objectives would be extensively used. R&D related to biotechnology, particularly genetic engineering, for the development of designer crops such as golden rice, high quality protein maize and other cereals and crops, would be of international standards. The hybrid technology would be strengthened. Space technology and geographic information system would be put to use. Post-harvest technologies to prevent storage losses would be put to use in the modernisation of storage and processing facilities.
India will innovatively use technology to generate wealth from the vast mineral resources. From a current consumption level of about 26 kgms. per capita, as against the world average of 150 kg, the level of consumption of steel is likely to go up to a little above 65-70 kg per capita by 2025. State-of-the-art technology would be deployed to ensure considerable reduction in cost of production, improvement in the quality of steel products and manufacture of speciality steels for the upper segment of the market. India tops the list of countries, with 37% of the world’s illmenite ores, which is used to make titanium, the wonder modern metal. Titanium will see a much larger and more significant usage in the country by 2025. Development of cheaper alloys, namely titanium-aluminium-iron, will be commercially exploited. Titanium castings would be extensively produced in India for applications in aerospace, chemical, marine and mechanical engineering sectors. Its bio-compatibility would lead to increased use in the treatment of human beings. There would be increased exploitation of the high availability of rare earths through modern technology. There will be a substantially increased usage of composites in many sectors by 2025, particularly the transportation and construction sectors. Glass fiber-reinforced polymers and metal matrix composites would witness increased activities. Photonic materials like laser and fiber optics will be dominating all walks of life. Information technology, fiber optics-based telecommunication, health care, pollution control, life sciences, etc. would witness unprecedented and innovative growth trajectories. Low temperature super conductors with improved performance would be developed. Polymers are likely to see many exciting applications.
In the chemical industry, technological innovations would spur considerable growth in petroleum products, fertilizers, polymers, fibres, organic chemicals, dyestuffs and pigments, leather chemicals, surface coatings and speciality chemicals. Environmental considerations would compel use of cleaner processes with near total recycling and recovery. Technologies for high energy- efficiency, tailor made products, increased automation and use of continuous processes would be available. Biologically catalyzed processes for production of fine organic chemicals and pharmaceuticals would be possible. Technologies related to bioengineering systems, biomolecular materials and biomaterials will be put to use. From the Himalayas to the whole of the northeast, the long coastal region and the expansive Central India, the entire area is very rich in flora and fauna. Coast lines of more than 3500 kms on the main land, together with another 4000 kms of Lakshwadeep and the Andaman and Nicobar Islands gives India a very rich bioresource. India would be able to capture the wealth of these biological resources through the application of technology.
There would be considerable growth in technology applications in the manufacturing sector. There would be a preeminent role for computer-aided design and computer-aided manufacturing processes. Computer and Numerically Controlled (CNC) machines tools would improve efficiency. Software developments for processes and systems will improve the over all efficiency of the manufacturing sectors making it internationally competitive. The service sectors in the country would also witness increased applications of technology, primarily through the IT sector, for the purpose of gaining greater market access, efficient planning and improved delivery systems.
The infrastructure required for economic growth would also be in position because of technological innovations. There would be marked improvement in the quality of power supply. The use of energy would be efficient so that losses are minimised. Technologies relating to renewable sources would be considerably improved leading to cheaper availability of solar, wind and ocean energy. India is richly endowed with both solar and wind energy, and, therefore, technologies to considerably reduce the costs of solar and wind energy would take care of the shortages of power. To tap the vast ocean energy, the Ocean Thermal Electric Conversion technology would be put to commercial use. Technologies to harness the vast potential of hydel power at affordable costs would be harnessed. Fast Breeder technology would be a major source of energy. Nuclear energy, hydel power, biomass energy, the whole range of renewable sources of energy and sound conservation practices would step in to bridge the energy gaps.
Technology in regard to efficient use of water and creation of a national water grid by linking major rivers of the country would be in position. Local water harvesting and local waste recycling would have developed to fine art to ensure high quality at low costs.
Emphasis will be on conservation and wastages would be eliminated. To prevent exhaustion of resources, recycling techniques would be universally applied. Barring energy and cement, almost all resources would lend themselves to effective application of recycling and conservation techniques.
In the field of space technology, India would be a world leader, enabling it to be a significant world player in remote sensing and communications. In nuclear energy and defense technology India would see considerable improvement. India could well become a major exporter of defence materials.
Most likely scenario
While science and technology would be given the respect acknowledgement that they richly deserve, India is unlikely to achieve the full impact of the vision staement. We would be far behind in giving real and, more importantly, the psychic income as per the international standards to all our scientists and technologists. Motivation levels would still be low, though at a much higher level than the present. The educational institutions and the R&D laboratories and institutions would also be far behind the international standards. Funds would be a major constraint. There would be considerable brain drain in the early stages, but as the Indian economy grows and the Indian markets open up to international competition, there would be greater opportunities coming up the way of the enterprising Indians settled abroad. They would be coming back to India in droves, and help in India’s scientific and technological upliftment.
The linkage between the R&D laboratories, academia and the industry would be strengthened, but would still be way behind the ideal situation as is prevalent in the industrialised nations. IITs, IIMs, IIITs, IISc and a few other educational institutions, CSIR laboratories, some laboratories in the private sector, particularly those in the pharmaceutical industry, would be the front runners in building up the linkages with the industry. Bulk of our educational institutions would not have the capabilities to do so. But the quality and sophistication of research depends upon a whole lot of other attendant factors, and, hence, India would not be able to match the developed countries. At best, we would be alongside some of the better developing countries.
While Government contribution to R&D may increase only marginally from the present level of 0.6-0.7% of GNP, the contribution of the private sector would continue to severely lag behind the levels seen in the developed economies. For reasons of cost and availability of suitable manpower, some MNCs may be tempted to set up peripheral research facilities in India, but the sensitive and strategic research would still continue to be carried out in their own laboratories in the host countries. There would be considerable activities in the STEPs and the Electronics Parks, but this would also, barring some in the Electronics Parks, be way behind the best in the world.
Technological strength in microelectronics, information technologies, biotechnologies, advanced new materials technologies and new energy technologies, would be considerably enhanced. In some areas of biotechnologies and the new energy technologies, particularly those related to the renewable forms of energy, we may become a significant world player.
In agriculture, significant progress would be made in biotechnologies related to seeds, plants, soil treatment and the development of designer crops such as the golden rice and the high quality protein maize crop. Hybrid technology would be strengthened. India would be able to fully utilise the potential of post-harvest technologies for processing and storage facilities.
In the field of advanced new materials technologies, India would be a market leader in the modern wonder metal, titanium. There would be a marked increase in the technological strength related to cheaper alloys and composites. But we would still be away from the levels attained in the developed nations. The use of photonic materials like the laser and fibre optics will be widespread. Except in the case of titanium, we may not be in a position to strategically exploit our technological strengths in the areas of advanced new materials.
India would make headway in the fields of bio-catalysis, bio-engineering systems, bio-molecular materials and bio-materials. But we would be still very far from the levels attained in the developed countries. Environmental considerations would compel the use of cleaner processes with near total recycling and recovery in the chemical industries. In pharmaceuticals, we would have developed many strategic molecules which would greatly enhance our reputation and standing in the world pharmaceutical industry. We would have gone past the take-off stage in the exploitation of our rich bio-resource.
In the area of information technology, our strength would lie in the development of software, where we would emerge as a significant world player. But we would still lag behind in the hardware sector.

The manufacturing sector would witness the adoption of the state-of-art technologies across the board in order to remain internationally competitive. Bulk of the new technologies would be imported, but innovative modifications would be carried out by Indian scientists and technologists to suit the local and international market conditions.


On the energy front, there would be greater reliance on the fast breeder technology for nuclear energy, all forms of renewable sources of energy including solar, ocean, wind and biomass, and mini-, midi- and mega-hydel power. Technologies for these would see significant progress. In the hydrocarbon sector, the refining and pipe transportation technologies would be upgraded to international standards, but we would still lag behind the world majors in prospecting and exploitation of the oil and natural gas reserves.

Technologies for efficient use of water, water harvesting and the creation of a national water grid by linking up all the major rivers of the country would be in position.

Emphasis would be on conservation and waste elimination. Recycling and conservation techniques would be in position.



Employment



Most Likely Scenario
The process of globalisation and liberalisation, while a laudable objective in itself, has ushered in an era of competitiveness compelling the domestic industries not only to increase productivity but also to undertake fierce cost cutting exercises through capital intensive technological innovations and other measures. Employment expansion, thus, has suffered. The rate of unemployment, measured on current daily basis, has increased from 6.03% in 1993-94 to 7.32% in 1999-00. The post reforms period has, in fact, witnessed a jobless growth, a condition which has inevitably led to growing frustration among the youth, in particular, the educated youth.
The quality of employment also leaves much to be desired, particularly in the context of rising levels of aspirations of not only the educated unemployed but also the general masses who are now increasingly politically relevant, and, hence, whose voices are now being heard. Therefore, not only must new employment opportunities be created commensurate with the growth in the labour force, but these opportunities must also be of the right quality, measured in terms of the incomes generated and the preferences/expectations of the labour force. The traditional low quality, low income employment opportunities must give way to high quality, high income employment either in the preferred organised sector ( wage employment ) or in the unorganised sector.
According to the population projections, the population in the working age group of 15-64 would increase from 598 million in 2000 to 940 million in 2025 under the most likely scenario. This would mean an average growth rate of 1.83% per annum in the population of the working age group. With a baseline labour force of 363.33 million in 1999-00, on the basis of 5.2% GDP growth during 2000-01 and 2001-02, the Special Group constituted by the Planning Commission has computed that the labour force in 2002 would be 378.21 million ( CDS basis ). If it were to be assumed that the rate of growth in the labour force would be in line with the rate of growth of the population in the working age group, or that the labour force participation rate on an average for the entire working age group population remains unchanged, the total labour force by 2025 comes to 570.07 million ( labour force growth at 1.8% per annum ). But as schooling has increased over the years, the labour force participation rates in the lower age groups have declined. Even otherwise, there has been a general deceleration in the participation rates from 1983 to 2000. Should the participation rate increase, as it should with accelerated development, the labour force would also register an increase. Employment in 1999-00 is 336.75 million on Current Daily Status basis. If the elasticity of employment to GDP is assumed to remain constant at 0.165, the actual elasticity during the period 1994-00 for the economy as a whole, then the employment by 2025 for a baseline growth rate of 6% would be 430.79 million. The number of unemployeds would, therefore, be 139.28 million, and the unemployment rate would be 24%, a situation which would be highly explosive for the economy as well as the democratic fabric of the country. If the participation rate increases, the situation worsens, but if the GDP growth rate increases, then there could be some softening of the situation.
A baseline growth rate of 6% per annum is considered very reasonable if viewed in the global context. According to the Special Group appointed by the Planning Commission, the GDP (net) growth rate during the period 1993-94 to 1999-00 in the organised sector responsible for 8.34% of the employment has been 8.5% pa. During the same period, employment in the sector grew at a rate of 0.56% pa, giving an employment elasticity of 0.066. However, the period selected has been the period of adjustment when the Indian industries were compelled to cut costs and to employ capital intensive technologies to bring down the manpower costs so as to be competitive internationally. Meanwhile, with growth in the educational standards and the upgradation of the skills of the labour force, there is a strong likelihood of the productivity of labour increasing. With economic development at the reasonably respectable rate of growth of 6% pa on a sustained basis, the employment opportunities in the organised sector are also likely to multiply. Enhanced labour productivity, and widening job opportunities, as a fall out of the opening of the market, for the skilled labour force would mean not only a more competitive Indian industry structure but also greater investments and hence more diversified employment opportunities and higher employment elasticity than the one witnessed during the period 1993-94 to 1999-00.
Agriculture, Manufacturing, Trade, hotels and restaurants and Community, social and personal services sectors, between themselves were responsible for about 90% of the total employment in 1999-00. Of the total organised sector employment of 28.11 million, these sectors contributed about 72%. Of the above four sectors also, it is mainly manufacturing and community and social and personal services sectors which are significant organised sector employers, the other two are very significant unorganised sector employers. A determined bid to improve the lot in these sectors would go a long way in improving the employment scenario. A 50% increase in the employment elasticities in these sectors by 2025 may seem daunting, but is not very difficult to achieve with the right mix of policies and incentives. Should that happen the unemployment rate by 2025 may well be around 16%, a rate which would still be explosive, fraught with severe political, social and economic travails. However, the problem would be much less exacerbated. The ultimate answer would obviously lie in a faster rate of economic growth and an employment-oriented growth policy
The Special Group appointed by the Planning Commission on targetting 10 million employment opportunities per year has recommended that “Government should revamp the activities in those sectors where the comparative advantage lies in a labour intensive production.” The Group’s emphasis, and rightly so, is on agriculture and allied activities, small and medium enterprises, broad-based rural non-farm activities and some of the socoial services sectors like education and health. Development of high labour intensity sectors like construction, tourism, communication and information technology and financoial services has also been emphasised. The Group feels that with the appropriate policy mix and reallocation of resources, it should be possible to eliminate unemployment by the end of the 11th Plan period. The Group has estimated that for a growth rate of 8% per annum during the 10th Plan period, “nearly 20 million person years of employment opportunities would be created by selective innovative programmes and policies leading to a changed pattern of growth in favour of labour intensive sectors; the remaining 30 million will come from the normal buoyancy of growth as perceived over the recent past ( 1993-94 to 1999-00 ).” In the perception of the Group, in the low growth scenario of 6.5% per annum during the 10th Plan period, even with the policy changes, there would be a 9.3% rate of unemployment by the end of the 10th Plan.
Bhattacharya, however, feels that India will not be able to go beyond a baseline growth rate of 6% per annum during the coming period till 2025. Most likely, therefore, the unemployment scenario will continue to cause severe headaches to the social fabric and the economic and the political systems.



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