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GS Paper: GS3

  • Manipur Crisis

  • Miles to go: On change in Manipur, the road to normalcy

    Why in the News?

    After months of struggling to manage the ethnic crisis, the Union government finally took action by removing the N. Biren Singh-led government in Manipur and imposing President’s Rule, hoping this change would bring peace and stability.

    Who are the key stakeholders involved in the ethnic conflict, and what are their demands?

    • Meitei Community: Seeks protection of territorial integrity and opposes any division of Manipur. Example: Meitei groups have opposed the creation of a separate Kuki-Zo administrative region, fearing it would fragment the State.
    • Kuki-Zo Community: Calls for Union Territory status or a separate administrative arrangement to safeguard their identity and security. Example: Civil society organizations representing the Kuki-Zo people have warned against free movement unless their request for separate governance is met.
    • Naga Community: Resists any move to carve out a separate region, as it could affect their ancestral lands and autonomy. Example: Naga groups have opposed the Kuki-Zo call for Union Territory status, fearing loss of their territorial claims.
    • Union Government: Aims to restore law and order, maintain territorial integrity, and recover stolen arms. Example: After imposing President’s Rule, the government set a deadline for militant groups to surrender looted weapons and worked to reopen blockaded highways.

    What steps has the Union government taken to restore normalcy in Manipur after imposing President’s Rule?

    • Weapon Recovery Drive: Initiated efforts to retrieve stolen weapons from non-State actors to curb violence. Example: Set a deadline for groups to return weapons looted from police armories, recovering nearly one-third of the 3,000 missing firearms.
    • Clearing Highway Blockades: Worked to remove blockades on key highways to restore the free movement of goods and people. Example: Central armed police forces attempted to clear blockades in Kangpokpi district, though clashes resulted in one death and over 40 injuries.
    • Strengthening Security Measures: Deployed additional central forces to control violence and secure vulnerable areas. Example: Increased the presence of paramilitary forces in both the hill and valley regions to prevent further ethnic clashes.
    • Engaging in Dialogue: Encouraged talks with community representatives while rejecting violent and separatist threats. Example: Continued discussions with leaders from the Meitei and Kuki-Zo communities to find a peaceful resolution.
    • Central Leadership Involvement: Called for the active engagement of senior government officials to address grievances and appeal for peace. Example: The Union Home Ministry and senior officials emphasized the need for dialogue and public appeals to restore calm and facilitate the return of displaced persons.

    Why is the demand for Union Territory status or a separate arrangement for Kuki-Zo areas considered a dangerous move?

    • Deepening Ethnic Divisions: Such a move could escalate tensions between communities, worsening the already fragile social fabric. Example: It may intensify hostility between the Meitei and Kuki-Zo groups, making reconciliation and long-term peace more difficult.
    • Resistance from Other Communities: The proposal could face strong opposition from other ethnic groups, such as the Nagas, who also reside in the hill areas and have their own territorial interests. Example: Naga groups may view the creation of a separate Kuki-Zo region as a threat to their claims and autonomy, leading to new conflicts.
    • Undermining Territorial Integrity: Fragmenting the state could weaken Manipur’s territorial integrity and set a precedent for further separatist demands. Example: Accepting such a demand could encourage other communities to seek similar autonomous arrangements, complicating governance and stability.

    Way forward: 

    • Inclusive Dialogue and Mediation: Facilitate continuous engagement with all ethnic groups to address grievances and promote mutual understanding through impartial mediation.
    • Strengthening Law and Order: Intensify efforts to recover illegal weapons, enforce rule of law, and ensure equitable development to rebuild trust and maintain peace.

    Mains PYQ:

    Q Analyze internal security threats and transborder crimes along Myanmar, Bangladesh and Pakistan borders including Line of Control (LoC). Also discuss the role played by various security forces in this regard. (UPSC IAS/2020)

  • RBI’s Financial Stability Report (FSR) 2024 and Rising Household Debt

    Why in the News?

    The Reserve Bank of India (RBI) Financial Stability Report (FSR), 2024 has highlighted an increasing household debt burden and a concerning rise in consumption-based borrowing.

    About Financial Stability Report (FSR):

    • The FSR is published biannually (June & December) by the RBI.
    • It reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC – headed by the Governor of RBI) on risks to financial stability and the resilience of the financial system.
    • The Report also discusses issues relating to the development and regulation of the financial sector.

    RBI’s Financial Stability Report (FSR) 2024 and Rising Household Debt

    Key Highlights of the Financial Stability Report (FSR) 2024:

    • Rising Household Debt-to-GDP Ratio:
      • Household debt-to-GDP ratio: 36.6% (June 2021) → 42.9% (June 2024).
      • Household assets declined: 110.4% (June 2021) → 108.3% (March 2024), indicating more borrowing for consumption.
    • Credit Growth Trends:
      • Total credit growth (March 2024): 15.4% YoY.
      • Prime & Super-Prime borrowers: 66% of total loans, reducing risky lending.
      • Super-prime borrowers mainly borrow for asset creation, while sub-prime borrowers rely on loans for consumption.
    • Rising Unsecured Loans & Financial Stress:
      • 50% of sub-prime loans are for consumption; 64% of super-prime loans are for asset creation.
      • Credit card delinquencies: 1.8% (Sept 2023) → 2.4% (Sept 2024).
      • Personal loan defaults: 3.2% (Sept 2023) → 3.9% (Sept 2024).
      • Low-income households rely more on credit cards & personal loans than secured loans.
    • RBI’s Measures to Curb Consumer Borrowing:
      • September 2023: RBI raised risk weights on unsecured loans, slowing credit expansion.
      • Auto loan growth fell: 18.2% (March 2023) → 14.5% (March 2024) due to tighter lending norms.
    • Consumption Loans & Economic Impact:
      • More borrowing for consumption, less for housing, education, or business investment.
      • Rising debt repayment reduces spending, weakening GDP growth.
    • NPA Risks from Consumer Credit:
      • Unsecured loans growing faster, raising default risks.
      • Half of borrowers with credit card/personal loans also have home/auto loans—defaulting on one triggers loan classification as NPA.
    • Fintech’s Role in Rising Debt:
      • Digital lending & BNPL schemes enable easy credit but increase financial vulnerability.
      • Regulatory oversight needed to prevent excessive debt accumulation.

    PYQ:

    [2022] In India, which one of the following is responsible for maintaining price stability by controlling inflation?

    (a) Department of Economic Affairs, Ministry of Finance

    (b) Financial Stability and Development Council (FSDC)

    (c) NITI Aayog

    (d) Reserve Bank of India

     

  • Genetically-Engineered Bananas to Reduce Food Waste

    Why in the News?

    Scientists at Tropic, a UK-based biotech company, disabled the PPO gene in bananas slowing down the browning process while allowing normal ripening.

    About the Genetically Engineered Bananas

    • Genetically engineered bananas are modified using biotechnology to extend shelf life, resist browning, and enhance durability.
    • These bananas stay yellow for 12 hours after peeling and are less prone to bruising.
    • The modification prevents enzymatic browning, making bananas look fresh for longer without altering their ripening process.
    • The modification targets polyphenol oxidase (PPO), the enzyme responsible for browning.
    • By disabling PPO activity, oxidation of pigments is slowed, delaying the formation of brown spots.

    Gene-Silencing Method Used:

    • RNA interference (RNAi) is used to silence the PPO gene, reducing its activity without affecting overall banana development.
    • RNAi introduces small RNA molecules that block PPO gene expression, preventing the synthesis of the browning enzyme.
    • This method is precise and does not introduce foreign DNA, making it different from traditional genetically modified organisms (GMOs).
    • Gene-editing techniques like CRISPR-Cas9 are also being explored for future crop modifications.

    PYQ:

    [2019] ‘RNA interference (RNAi)’ technology has gained popularity in the last few years. Why?

    1. It is used in developing gene silencing therapies.

    2. It can be used in developing therapies for-the treatment of cancer.

    3. It can be used to develop hormone replacement therapies.

    4. It can be used to produce crop plants that are resistant to viral pathogens.

    Select the correct answer using the code given below:

    (a) 1, 2 and 4 (b) 2 and 3 (c) 1 and 3 (d) 1 and 4 only

     

  • Kisan Credit Card (KCC) Scheme

    Why in the News?

    According to the RBI, bad loans in the Kisan Credit Card (KCC) Scheme segment increased by 42% over the last four years, reaching ₹97,543 crore by December 2024, up from ₹68,547 crore in March 2021.

    About the Kisan Credit Card (KCC) Scheme

    • The KCC Scheme is a government-backed credit initiative designed to provide timely and adequate credit to farmers for agricultural and allied activities.
    • Launched in 1998 on the recommendation of NABARD (R.V. Gupta Committee), the scheme aims to ensure easy access to institutional credit, reducing farmers’ dependency on moneylenders and informal credit sources.
    • Purpose of KCC:
      • Provides short-term credit for crop cultivation and post-harvest needs.
      • Supports working capital requirements for farm mechanization, dairy, poultry, fisheries, and other allied agricultural activities.
      • Helps meet household consumption needs of farmers.
      • Allows credit access for investment in agriculture-related businesses.
    • Credit and Repayment System:
      • Farmers can avail collateral-free loans up to ₹2 lakh.
      • Interest rates start as low as 4% per annum (with government interest subvention for timely repayment).
      • The loan limit was increased from ₹3 lakh to ₹5 lakh in Budget 2025-26.
      • Revolving credit system allows farmers to withdraw and repay as needed within the sanctioned limit.
      • Repayment schedules are linked to the crop harvesting cycle, ensuring no undue financial burden.
    • Implementation: Commercial Banks; Regional Rural Banks (RRBs); Small Finance Banks; Cooperative Banks.
    • Additional Benefits:
      • Comes with insurance coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY) to protect against crop loss.
      • Covers fisheries and animal husbandry farmers (since 2018-19).

    Successes and Limitations of the KCC Scheme:

    Successes Failures
    • Increased Financial Inclusion: 7.3 crore active accounts, reducing reliance on moneylenders.
    • Higher Agricultural Productivity:  Easy access to inputs like seeds, fertilizers, and machinery.
    • Increased Support: Interest subvention makes loans affordable; loan limit raised from ₹3 lakh to ₹5 lakh (Budget 2025-26).
    • Promoted Rural Development: Covers women farmers, Farmer Producer Organizations (FPOs), and non-farm activities.
    • Rising NPAs:  Discussed above.
    • Loan Misuse: Funds diverted for non-agricultural expenses, increasing defaults.
    • Low Financial Literacy: Many farmers unaware of repayment terms, leading to debt traps.
    • High Credit Dependency: Continuous borrowing without income growth raises financial risks.

    PYQ:

    [2020] Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

    1. Working capital for maintenance of farm assets
    2. Purchase of combine harvesters, tractors and mini trucks
    3. Consumption requirements of farm households
    4. Post-harvest expenses
    5. Construction of family house and setting up of village cold storage facility

    Select the correct answer:

    (a) 1, 2 and 5 only

    (b) 1, 3 and 4 only

    (c) 2, 3, 4 and 5 only

    (d) 1, 2, 4 and 5

     

  • What are Collisionless Shock Waves?

    Why in the News?

    A recent study published by Johns Hopkins University (USA) and Northumbria University (UK) reveals how Collisionless Shock Waves act as cosmic accelerators, helping subatomic particles gain ultra-high energy and travel vast distances in space.

    What are Collisionless Shock Waves?

    • Collisionless shock waves are disturbances in plasma (ionized gas) where energy transfer occurs without direct particle collisions, relying instead on electromagnetic forces.
    • They are found in supernova remnants, black hole disks, pulsars, magnetars, and planetary magnetospheres.
    • They act as natural cosmic accelerators, boosting electrons and other charged particles to ultra-high speeds.

    Key Findings from the Study

    • NASA’s MMS, THEMIS, and ARTEMIS missions observed an electron acceleration event near Earth’s bow shock on December 17, 2017.
    • Electrons in Earth’s foreshock region gained 500 keV of energy, reaching 86% of the speed of light, a huge increase from their usual 1 keV.
    • Diffusive shock acceleration (known for producing high-energy cosmic rays) requires electrons to already be moving at 50% of light speed before further acceleration can occur.
    • The study identifies how electrons receive this initial boost, a long-standing astrophysical mystery.
    • Scientists have long assumed that supernova explosions are the primary source of cosmic rays.
    • The recent study suggests that planetary magnetospheres interacting with stellar winds could also contribute to high-energy cosmic rays.

    How Shock Waves accelerate Particles without Collisions?

    • Unlike in solids, liquids, or gases, where energy is transferred via molecular collisions, plasma particles interact through electromagnetic fields.
    • This allows shock waves to accelerate electrons without direct contact.
    • Multi-Stage Acceleration Process:
      1. Plasma waves interact with electrons, imparting initial energy.
      2. Magnetic turbulence in the shock front causes electrons to spiral, further increasing their speed.
      3. Repeated interactions with plasma waves push electrons to relativistic speeds.
    • Role of Earth’s Bow Shock & Foreshock:
      • When the solar wind collides with Earth’s magnetosphere, it forms a shock wave.
      • The foreshock region ahead of this wave is highly turbulent, enabling efficient electron acceleration.

    PYQ:

    [2009] In the year 2008, which one of the following conducted a complex scientific experiment in which sub-atomic particles were accelerated to nearly the speed of light?

    (a) European Space Agency

    (b) European Organization for Nuclear Research (CERN)

    (c) National Aeronautics and Space Administration (NASA)

    (d) National Academy of Sciences, USA

     

  • Income levels of salaried class have stagnated in recent years

    Why in the News?

    According to PLFS reports, employment in India is increasing, but the real wages of salaried workers have remained unchanged since 2019.

    What are the key reasons behind the stagnation of real wages for salaried workers in India since 2019?

    • Inflation Outpacing Wage Growth: Rising consumer prices (CPI) have eroded the purchasing power of salaries despite nominal wage increases. For example, Real wages for salaried workers in India were 1.7% lower in the June 2024 quarter compared to the June 2019 quarter (PLFS data).
    • Excess Labour Supply and Declining Returns to Education: An oversupply of qualified workers has reduced the premium for higher education, limiting salary growth. For example, the share of self-employed workers increased from 53.5% in 2019-20 to 58.4% in 2023-24, indicating a shift from salaried roles due to a lack of opportunities.
    • Depressed Private Sector Investment: Reduced corporate investment leads to slower job creation and wage stagnation. For example, India’s private sector investment-to-GDP ratio declined from 28% in 2011-12 to 21.1% in 2022-23 (Reserve Bank of India).
    • Policy Shocks (Demonetisation and GST Impact): Economic disruptions from demonetisation (2016) and GST (2017) weakened small and medium enterprises (SMEs), affecting formal employment. For example, Formal employment fell, and salaried employment as a share of total workers dropped from 22.9% in 2019-20 to 21.7% in 2023-24 (PLFS data).
    • Shift Toward Informal and Contractual Work: Companies increasingly rely on temporary and gig workers, offering lower pay and fewer benefits. For example, Casual labour wages increased by 12.3% (real terms) between 2019 and 2024, while salaried wages stagnated, reflecting a rise in informal work.

    Why is the increase in wages for casual labour not considered a net positive for the economy?

    • Lower Productivity Contribution: Casual labour typically involves low-skilled, irregular work with limited productivity gains. While wages may rise, the overall economic output does not grow proportionately.
      • For example, the agriculture sector, which employs a large share of casual labour, contributed only 16% to India’s GDP in 2023-24 despite employing over 45% of the workforce (Economic Survey 2023-24).
    • Informal Nature of Work: Casual jobs lack social security, health benefits, and job stability, leading to long-term economic insecurity despite wage increases.
      •  In India, 93% of the workforce remains in the informal sector with minimal social protection, contributing to economic vulnerability (ILO report, 2023).
    • Wage-Price Spiral Risk: Rising wages in low-skilled sectors can increase the cost of goods and services, driving inflation without improving living standards.
      • For instance, wage increases for casual farm labour contribute to higher food prices, intensifying retail inflation (CPI rose by 7.44% in July 2024, RBI).
    • Limited Skill Development and Upward Mobility: Casual work offers fewer opportunities for training or career advancement, trapping workers in low-wage cycles despite nominal wage growth.
      •  The Periodic Labour Force Survey (2023-24) shows that only 2.4% of India’s workforce received formal vocational training, limiting skill-based upward mobility.
    • Depressed Consumption and Savings Rates: Casual labourers typically earn subsistence-level wages, leaving little room for savings or significant consumption, which hampers long-term economic growth.
      • Household savings as a share of GDP declined from 23.6% in 2011-12 to 18.1% in 2022-23, reflecting weak wage-driven consumption (RBI report).

    When did real wages for self-employed workers begin to recover after the pandemic?

    Real wages for self-employed workers in India began to recover after the pandemic in the quarters. Despite this recovery, as of the June 2024 quarter, real wages remained 1.5% lower than in the June 2019 quarter.

    • Rural vs. Urban Disparities:
      • Rural Areas: In rural regions, self-employed workers experienced a 3.02% increase in real wages during the same period.
      • Urban Areas: Conversely, urban self-employed workers saw a decline of 5.2% in real wages compared to pre-pandemic levels.

    How have policy decisions like demonetization and the implementation of GST affected wage growth and employment patterns? 

    • Disruption of Informal and Small-Scale Enterprises: Both demonetisation and GST disrupted cash-dependent small and medium enterprises (SMEs), leading to job losses and reduced wage growth in the informal sector. Example: The share of salaried workers declined from 22.9% in 2019-20 to 21.7% in 2023-24 (PLFS data), indicating a shift away from formal employment.
    • Shift Toward Informal and Gig Work: Policy shocks accelerated the transition from stable salaried jobs to informal, gig-based, and self-employed work, which generally offers lower pay and fewer benefits. Example: The share of self-employed workers increased from 53.5% in 2019-20 to 58.4% in 2023-24, reflecting a rise in informal employment (PLFS data).
    • Slower Wage Growth and Employment Stagnation: Compliance burdens from GST and cash shortages from demonetisation constrained business operations, leading to slower wage increases across sectors. Example: Real wages for salaried workers were 1.7% lower in June 2024 compared to June 2019 (PLFS data), indicating stagnant wage growth despite economic recovery.

    Way forward: 

    • Enhance Formal Employment and Skill Development: Promote labour-intensive sectors and incentivize formal job creation through targeted tax benefits and reduced compliance burdens.
    • Strengthen Social Security and Wage Policies: Implement comprehensive social protection schemes for informal workers to ensure income stability and healthcare benefits.

    Mains PYQ:

    Q Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss. (UPSC IAS/2022)

  • India second-largest arms importer after Ukraine

    Why in the News?

    India remained the second-largest arms importer, despite a 9.3% decline in imports between 2015-19 and 2020-24 a/c to the Stockholm International Peace Research Institute (SIPRI) Report.

    About SIPRI

    • The SIPRI is an independent organization established in 1966, based in Stockholm, Sweden, conducting research on conflict, arms control, and disarmament.
    • SIPRI provides comprehensive data on global arms imports, exports, and military expenditures, tracking defense trends and geopolitical conflicts worldwide.
    • It analyzes ongoing wars, nuclear proliferation, cybersecurity threats, and environmental security, offering policy recommendations for international peace and stability.
    • SIPRI publishes flagship reports such as the SIPRI Yearbook, Arms Transfers Database, and Military Expenditure Database, which are widely used by governments, researchers, and policymakers.

    India’s Arms Imports: Trends and Shifts

    • India remained the world’s second-largest arms importer, despite a 9.3% decline in imports from 2015-19 to 2020-24.
    • Russia accounted for 36% of India’s arms imports in 2020-24, significantly LOWER than 55% in 2015-19 and 72% in 2010-14.
    • India has reduced dependence on Russia and increased arms deals with France, the U.S., and Israel.
    • India became France’s largest arms importer (28%), with 36 Rafale fighter jets and six Scorpene submarines already contracted.
    • India is finalizing agreements for 26 Rafale-M jets and three additional Scorpene submarines.

    Global Arms Trade Highlights

    • Ukraine – The Largest Importer: Due to the ongoing war, Ukraine’s arms imports surged nearly 100 times in 2020-24 compared to 2015-19.
      • The U.S. accounted for 45% of Ukraine’s imports, followed by Germany (12%) and Poland (11%).
    • U.S. dominance in exports: The U.S. expanded its global arms market share to 43%, reinforcing its position as the top exporter.
    • Russia’s decline: Russian arms exports fell by 64%, dropping to 7.8% of global exports, behind France (9.6%).
    • European rearmament: European arms imports surged by 155% in response to rising security threats from Russia.
    • Pakistan’s growing imports: Pakistan’s arms imports grew by 61%, with China supplying 81% of its weapons, up from 74% in 2015-19.
    • China’s self-reliance: For the first time since 1990-94, China dropped out of the top 10 arms importers, reflecting its expanding domestic defense industry.
    • Italy’s rise in arms exports: Italy climbed from 10th to 6th place, with a 4.8% share of global arms exports.

    PYQ:

    [2020] What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region.

     

  • Exercise Khanjar-XII

    Why in the News?

    The 12th edition of the India-Kyrgyzstan Joint Special Forces Exercise KHANJAR-XII is set to be held in Kyrgyzstan.

    About Exercise KHANJAR-XII

    • KHANJAR-XII is the 12th edition of the India-Kyrgyzstan Joint Special Forces Exercise, aimed at enhancing counter-terrorism and special operations capabilities.
    • It is a bilateral military exercise held annually since 2011, alternately hosted by India and Kyrgyzstan.
    • The 2025 edition is being conducted in Kyrgyzstan.
    • Participants:
      • Indian Contingent: Parachute Regiment (Special Forces).
      • Kyrgyzstan Contingent: Kyrgyz Scorpion Brigade.
    • The primary objective is to strengthen military cooperation, improve joint operational capabilities, and enhance interoperability between the two nations’ Special Forces.

    Key Features:

    • Counter-Terrorism Focus: Training in urban and high-altitude warfare to counter modern security threats.
    • Special Forces Interoperability: Strengthening coordination in joint military operations.
    • Mountain Warfare & Survival Skills: Enhancing operational effectiveness in challenging terrains.
    • Military Technology Exchange: Sharing expertise on weapons systems, surveillance, and intelligence gathering.
    • Reinforcing India’s Central Asia Outreach: Strengthening India’s engagement with Central Asian nations under its Connect Central Asia policy.

  • As imports of semiconductor chips rise, India eyes local production

    Why in the News?

    At the World Economic Forum in January, Electronics and IT Minister Ashwini Vaishnaw announced that India will produce its first locally made semiconductor chip this year.

    What is the primary goal of India’s Semicon India Programme?

    • Reduce Import Dependency: To decrease reliance on foreign countries for semiconductor chips used in electronics, automobiles, and communication devices.  
    • Boost Domestic Manufacturing and Innovation: To establish a strong domestic ecosystem for semiconductor fabrication, assembly, testing, and packaging (ATP). Example: Construction of the Dholera semiconductor fabrication facility in Gujarat by Tata Electronics in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation.
    • Enhance India’s Position in the Global Supply Chain: To integrate India into the global semiconductor value chain and attract investments from global tech giants. Example: The Tata Semiconductor Assembly and Test facility in Morigaon, Assam, is part of India’s effort to develop advanced chip packaging capabilities and reduce external reliance.

    How will it reduce import dependency on semiconductor chips?

    • Local Production of Semiconductor Chips: Domestic manufacturing of chips will reduce the need to import critical components used in electronics and communication. Example: India’s first indigenously manufactured semiconductor chip is expected to be produced in 2024, cutting reliance on imports from countries like China and South Korea.
    • Building Fabrication (Fab) Facilities: Establishing semiconductor fabrication plants allows India to produce advanced chips domestically. Example: The Dholera fabrication facility in Gujarat by Tata Electronics, in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation will reduce the need for importing high-end chips.
    • Developing Assembly, Testing, and Packaging (ATP) Capabilities: Setting up ATP units enables India to process raw semiconductor wafers into finished products locally. Example: The Tata Semiconductor Assembly and Test facility in Morigaon, Assam, will handle large-scale chip assembly and packaging, decreasing dependence on foreign ATP services.
    • Diversifying Supply Chains and Strengthening Indigenous Innovation: Promoting research and development will encourage innovation in chip design and technology. Example: Investments in EDA software (Electronic Design Automation) and Core IP (patents) will enable India to design proprietary chips instead of relying on external technologies.
    • Attracting Global and Domestic Investments: Incentives and policy support under the Semicon India Programme will attract both domestic and foreign semiconductor companies to manufacture locally. Example: Government partnerships with industry leaders like Tata Electronics and Foxconn encourage private investment in chip manufacturing, reducing future import needs

    Where are the major semiconductor manufacturing and assembly facilities being constructed under the Semicon India Programme?

    • Tata-PSMC Semiconductor Fab, Dholera, Gujarat: ₹91,000 crore investment for a fabrication unit with a capacity of 50,000 wafer starts/month, producing 28 nm compute and power management chips for EVs, telecom, defense, and consumer electronics.
    • Tata TSAT ATMP Unit, Morigaon, Assam: ₹27,000 crore investment in an advanced packaging unit handling 48 million chips/day, catering to automotive, EV, telecom, and consumer electronics sectors.
    • CG Power-Renesas-Stars ATMP Unit, Sanand, Gujarat: ₹7,600 crore investment for specialized chip manufacturing with a capacity of 15 million chips/day, focusing on consumer, industrial, automotive, and power applications.
    • Micron Technology ATMP Unit, Sanand, Gujarat: $2.75 billion investment for a memory and storage chip assembly plant, expected to deliver the first chip by 2025, primarily for export.
    • Kaynes Semicon OSAT Facility, Sanand, Gujarat: ₹3,307 crore investment in an outsourced assembly and test unit, aiming to produce 200 million chips annually by March 2025, focusing on power electronics and industrial uses.

    Why has the actual spending under the Semicon India Programme consistently fallen?

    • Delays in Project Approvals: Lengthy evaluation and approval processes for semiconductor projects have slowed fund disbursement. For instance, the Tata and Micron projects faced regulatory and environmental clearance delays.
    • High Capital-Intensive Nature: Semiconductor manufacturing requires significant upfront investment, and the government has struggled to allocate sufficient funds. For example, the revised estimate for FY24 dropped to ₹1,503.36 crore from the budgeted ₹3,000 crore due to financial constraints.
    • Limited Domestic Expertise: India’s lack of advanced technological expertise in areas like chip design and fabrication has slowed implementation, resulting in underutilized budgets.
    • Complex Global Partnerships: Collaboration with international firms, such as Powerchip Semiconductor Manufacturing Corporation, involves lengthy negotiations and compliance with global standards, delaying fund utilization.
    • Infrastructure Bottlenecks: Inadequate supporting infrastructure (like power and water supply) at manufacturing sites has caused delays. For example, the Dholera facility required significant investments in infrastructure before full-scale construction could begin.

    Way forward: 

    • Streamline Approval Processes and Policy Support: Implement faster clearance mechanisms and provide consistent policy incentives to accelerate project approvals and fund disbursement.
    • Invest in Skill Development and Infrastructure: Enhance domestic expertise through specialized training programs and improve infrastructure at manufacturing hubs to ensure timely project execution.