12 August 2024

MAINS DAILY QUESTIONS & MODEL ANSWERS

Q1. Examine the concept of deep industrialization in India, underscoring its importance and potential obstacles in fostering economic and societal progress.

GS II – Government Policies and Interventions

Introduction:

• While industrialization typically refers to the process of developing industries in a region or country, deep industrialization goes further by emphasizing sustainable and inclusive growth.
• It involves integrating industries with advanced technologies, fostering innovation, and ensuring environmental and social responsibility.

Need for Deep Industrialisation in India:

• Ineffective Manufacturing Competitiveness: To improve competitiveness in manufacturing, high-tech infrastructure and skilled manpower are crucial. However, India faces challenges such as limited telecom facilities outside major cities and loss-making State Electricity Boards.
• Industrial policies in India have failed to push the manufacturing sector whose contribution to Gross Domestic Product (GDP) is stagnated at about 16% since 1991.
• Lack of Adequate Transportation Facilities: India’s transportation infrastructure is strained, with overburdened rail networks and various issues plaguing road transport. These challenges hinder the efficient movement of goods and impact manufacturing competitiveness.
• MSME Sector Constraints: The MSME sector faces difficulties in accessing credit compared to medium and large-scale industries. This bias needs correction to support the growth of the MSME sector, which is vital for India’s economic development.
• High Dependency on Imports: India still relies on foreign imports for various critical sectors, including transport equipment, machinery, iron and steel, chemicals, and fertilizers. This dependency highlights the need for import substitution strategies.
• In India, the total industrial production of consumer goods contributes 38%.
• Lack of Effective Industrial Policy Reforms: Historically, industrial locations were often chosen for political reasons rather than cost-effectiveness. Additionally, the focus on public sector industries during early five-year plans led to inefficiencies and losses due to red-tape and labor-management issues, necessitating significant government expenditure to sustain them.
• Selective Inflow of Investments: In the current phase of investment following liberalisation, while substantial investments have been flowing into a few industries, there is concern over the slow pace of investments in many basic and strategic industries such as engineering, power, machine tools, etc.
• Skewed Consumption-Led Growth: Focusing attention on internal liberalisation without adequate emphasis on trade policy reforms resulted in ‘consumption-led growth’ rather than ‘investment’ or ‘export-led growth’.

Potential Challenges in India’s Industrialization:

• India’s Post-Pandemic Distorted Economic Landscape: India has maintained its growth momentum, recovering relatively quickly from the pandemic. However, it is experiencing “premature deindustrialization,” where high growth benefits a small minority, exacerbating existing inequalities.
• While high-end cars sell out, common people struggle with high food prices, highlighting structural flaws in India’s growth model.
• Drawbacks of Services-Led Growth: While services-driven growth has been a focus since the late 1980s, it has not absorbed labor from agriculture as effectively as manufacturing would have.
• Additionally, the service sector requires a highly skilled workforce, leading to deep inequalities. Investments in higher education have contributed to the neglect of basic and elementary education, further exacerbating inequalities.
• Education Disparities and Industrial Stagnation: India’s education system reflects deep inequalities, with investments in human capital favoring the elite. This has led to a lack of entrepreneurial ventures on a large scale, unlike in China.
• The differential quality of schooling and higher education contributes to unequal labor market outcomes, particularly affecting first-generation graduates from rural areas and small towns.
• Cultural Factors in Industrialization: A key cultural prerequisite for industrialization is mass education, which India lacks. Joel Mokyr suggests that the rise of useful knowledge is crucial for technological progress and growth.
• India’s cultural devaluation of certain occupations essential for manufacturing, as well as the undervaluation of vocational skills, hampers organic innovation and industrial progress.
• Challenges in Job Creation: India’s labor market is characterized by low-paying and informal jobs. Most MSMEs are in the unorganized sector, lacking flexibility for job creation. China’s experience underscores the importance of scale in manufacturing for job creation.
• Over 99% of India’s 63 million MSMEs are in the unorganised sector with very little flexibility for productive job creation. Their hand-to-mouth existence is not a recipe for jobs or scale. China’s example suggests the influence of scale in manufacturing for more and more jobs.
• Assessing Make-In-India’s (MII’s) impact on job creation is challenging due to a lack of frequent and comprehensive data. While the Production Linked Incentives Scheme (PLI) benefits high-end manufacturing, traditional manufacturing sectors remain vital for job creation among the masses.
• Concerns of Protectionism and Past Experiences: Past experiences of protectionism in the 1970s and 1980s led to shortages and rent-seeking behavior, benefiting producers more than consumers. There are fears that protectionist measures under MII may lead to similar outcomes.
• The National Manufacturing Policy (NMP) of 2011 highlighted constraints in infrastructure, regulation, and manpower in the manufacturing sector. MII aims to raise manufacturing’s GDP contribution to 25% and create 100 million jobs, building on NMP’s objectives, but the situation remains bleak.

A Few Suggestions for Promoting Deep Industrialization in India:

• Multi-Faceted Approach to Deep Industrialization: India requires deep industrialization, not just a focus on the service sector, to transform its society fundamentally. This would involve a reevaluation of labor, production, and technology, along with a shift in societal attitudes toward vocational skills and artisanal knowledge.
• Deep industrialization would not only drive economic growth but also address societal divides rooted in caste and class.
• The Role of New Industrial Policy (NIP ’23): The draft NIP ’23 (currently on hold) seeks to attract investments, enhance efficiency, and make Indian manufacturers globally competitive, especially in sectors like toys, garments, and footwear.
• This should be incorporated and implemented by following locally based aspirations and manufacturing expertise of respective state governments.
• Industrial Policy for Inclusive Job Creation: In a labor-abundant country like India, industrial policy should prioritize job creation for the masses, particularly women. Labor-intensive manufacturing is crucial for creating productive jobs and achieving scale.
• Importance of Data in Policy Making: Economic policy making requires both data interpretation and a moral compass. Without high-frequency data on PLI’s impact, policymakers must rely on broader principles to shape industrial policy effectively.
• Integrating Industrial Revolution 4.0 in Economic Growth: It is characterised by the use of technology to blur the boundaries between the digital, physical, and biological worlds, and is driven by data.
• Key technologies include cloud computing, big data, autonomous robots, cybersecurity, simulation, additive manufacturing, and the internet of things (IoT).
• Rethinking Economic Growth Strategies: Some economists suggest shifting focus from manufacturing-led growth to high-skill, services-driven growth.
• Also, this approach should synchronize with current industrial policies in order to effectively harness its effectiveness.

• Deep industrialization in India holds the potential to drive sustainable economic growth, create employment opportunities, foster technological innovation, and improve living standards for its citizens. However, it requires careful planning, policy support, and investment in infrastructure and human capital to realize its full benefits while addressing challenges such as environmental sustainability and inclusive growth.

Q2. Investigate the factors contributing to the escalation of plastic pollution in the IHR (Indian Himalayan Region). What steps need to be taken to mitigate the crisis in the region?

GS III – Environmental Conservation

Introduction:

• The Indian Himalayan Region (IHR) is a critical source of water in the subcontinent, feeding a number of major rivers of India including the Indus, Ganges, and Brahmaputra river systems. Unscientific plastic disposal is causing soil and water pollution in the IHR and impacting its biodiversity, which is having an adverse impact on the freshwater sources that communities downstream depend on.

Reasons Behind Rising Plastic Pollution in IHR:

• Poor Waste Collection Infrastructure: Reports from NITI Aayog and the World Bank estimate that the IHR now generates more than five to eight million metric tons of waste annually. Uttarakhand and Himachal Pradesh have witnessed more than 400 million tourists since 2010 and are among the worst-performing states when it comes to solid waste management.
• Poor waste collection and infrastructure leads to more than 60% of waste being dumped, burned, or swept downstream into key rivers like the Ganga, Yamuna, and Sutlej.
• Heavy Influx of Tourists and Single-Use Products: With more travel options via road, train, and air, tourists are increasingly flocking to Himalayan states. Additionally, they visit more remote rural destinations and trekking routes.
• Their urban consumption patterns influence local residents to procure and sell packaged FMCGs, Polyethylene Terephthalate (PET) bottles, and single-use plastics to meet the large demand generated by the tourism, food, and hospitality sectors. This leads to widespread littering, dumping, and burning of waste in and around tourist areas.
• Lack of Reach of Extended Producer Responsibility (EPR): Even though the Ministry of Environment, Forest and Climate Change has mandated FMCG brands to set up and support reverse logistics for their plastic waste as a part of their EPR mandate under the Plastic Waste Management Rules 2016, most brands do not invest in reverse logistics in hilly areas due to the high cost of collection.
• Moreover, many of the products available in these villages are produced by local brands, which do not have the capacity to invest in reverse logistics. Tourists carry products by the more popular brands with them, and the waste they leave behind does not get collected or recycled.
• Lack of Policy Enforcement and Convergence: Waste collection in the IHR is sporadic, and waste is immediately dumped either at designated sites that lack environmental clearance or directly downhill and in rivers. Informal waste pickers and scrap dealers play a major role in material recovery, but only for high-value materials such as PET plastic, metals, cardboard, and glass.
• Additionally, such waste picking remains limited to urban and tourist areas. It doesn’t help that most gram panchayats and village or block development officers are ill-equipped to handle the exponentially increasing waste generation by local and floating populations.
• Inadequate Funding Capacity: Another important factor to be noted is that the per capita amount provided by the central government to gram panchayats under the Swachh Bharat Mission-Gramin guidelines is insufficient to meet the expenses in hilly areas due to the widely spread-out population and difficult terrain as compared to villages in the plains, which have a much higher population density.
• Social Stigma and Informal Livelihoods: There is a social stigma attached to working with waste as a means of livelihood. In most urban areas, informal migrant workers are involved in waste collection and segregation. However, rural areas do not attract these migrant workers, further exacerbating the crisis which calls for urgent redressal on a war footing.

Steps Required to Mitigate the Plastic Crisis in IHR:

• Plugging Data Gaps: Data gaps in terms of the quantum and quality of waste being generated in the Indian Himalayan Region States should be plugged in.
• Convergence in existing schemes such as SBM, the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and the Finance Commission’s grants could be used to create the infrastructure, maintain and run operations.
• Ensuring Sufficient Investments: The systemic nature of the problem implies that no singular institution or stakeholder can be held responsible for it. There is certainly an urgent need to solve the waste management problem in the IHR, but the current efforts in this direction are not commensurate with the scale of the issue.
• The Swachh Bharat Kosh Trust set up to facilitate the channelization of philanthropic contributions and corporate social responsibility funds towards this cause could also be used to augment resources.
• Adopting State-Specific Initiatives: States across the IHR have also been taking various initiatives including enacting laws to curb this menace which need to be adopted by other States also. For Instance,
• Himachal Pradesh has a buy-back policy for non-recyclable and single-use plastic waste since 2019.
• Sikkim banned packaged mineral water use in January 2022 and has a fairly robust regulatory system.
• Devolving Powers to Local Bodies: Though local bodies are the pivot of the waste management system in the country, a commensurate devolution of power to them is still a work in progress.
• The value of the EPR (Extended Producer Responsibility) certificate which is earned by a PIBO (Producers, Importers, and Brand owners) in the IHR could be higher than one earned in the rest of the country for every ton of plastic waste processed.

• The vision for the Indian Himalayan Region should extend beyond mere waste management to embrace a paradigm shift towards a circular economy that values conservation, sustainability, and resilience. By embracing innovation, inclusivity, and a shared commitment to environmental stewardship, India can safeguard the precious freshwater sources and biodiversity of the Himalayas for generations to come.