Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

India’s catch-up evolution in techno-policy landscape


From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Loopholes in India's policymaking

This newscard is an excerpt of the original article published in the DownToEarth.

Central theme: India needs to work out problems in old policies and develop new ones that ensure a rapid tectonic shift in India’s technological future.

Past lessons:

(1) From Agriculture

  • The Father of the Green Revolution, Norman E Borlaug, was credited with the development of semi-dwarf, disease-resistant and high-yield variety of wheat that he introduced in India, Pakistan and Mexico.
  • Led by Mexico, and soon followed by India, many countries adopted what is now commonly known as the ‘Green Revolution’.
  • Even after suffering two famines and recovering from the colonial catastrophe, India transformed itself into a self-sufficient nation in terms of rice and wheat over the next two decades.

Sustaining GR with farm mechanization

  • Nearing the end of this decade, farm mechanization in India stands at 40-45 per cent, which is low compared to the USA (95 per cent), Brazil (75 per cent) and China (57 per cent).
  • Renewal of focus on farm mechanization was afforded only in the 12th five-year plan through a sub-mission on agricultural mechanization.
  • Regional disparities aside, India has broken the inertia in adopting farm machinery when compared to previous decades that is largely owed to the current push by the Union government.

Still stranded with Land reforms

  • Yet, the response came late as compared to other countries with similar levels of development and was off by decades when compared to advanced economies.
  • Indian policymakers are still catching-up when implementing agriculture reforms, including land record digitization that should have been done and dusted by now.

(2) Agriculture to Industries

  • After adopting resistant-variety cotton, India became the largest producer and second-largest exporter of cotton.
  • But it lags significantly behind in exporting cotton fabric at 5-6 per cent of the global share as China leads at 51 per cent.
  • Even with technical textiles, India’s production share is at four per cent and we suffer from an overall trade deficit.

Why do we lag?

  • The earlier policies have not been revamped to reorient them into improving the technologically laggard and decentralized small-scale industries.
  • The overall direction is guided by budgetary announcements and segregated schemes that often leads to ambiguity in policy.
  • The new textile policy that is expected to provide for the economy of scale through textile parks is yet to be rolled out and the dedicated National Technical Textile Mission has only been recently announced.
  • Both policies should have been in place a decade ago.

(3) Automobile sector

  • India’s automobile sector is yet another example of playing policy catch-up.
  • None of the Indian companies has any substantial market share in electric vehicle (EV) production, and retail sale of EVs in India has not registered any significant growth.
  • The biggest hurdle to the growth of EVs in India, among others, is policy ambiguity in relation to conventional internal combustion (IC) engine vehicles that hamper strategic business decisions.

Beyond lofty roadmaps

  • In June 2019, NITI Aayog claimed that only EVs would be sold in India after 2030, replacing conventional IC engine vehicles, a claim that was later refuted by the Union Minister of Transport.
  • Policy ambiguity and lack of clear-cut directives on such a revolutionary technology can create disarray within the industry and on the broader strategic direction of the manufacturing sector.

(4) Gaps in data and privacy lawmaking

  • The world is fast changing with the advent of the fourth industrial revolution, artificial intelligence (AI) and quantum computing (QC).
  • Every dimension of technology will start interacting with each other as the physical operations will all be controlled and operated by intelligent and adaptive virtual systems.

Here too, India lags

  • Advanced economies have already put data regulation guidelines in place. China and the United States are already far too ahead in their R&D and policy research into AI and QC.
  • India developed its national strategy for AI only in 2018 and still lacks a full-proof futuristic policy on quantum computing.
  • Revolutionary and disruptive technologies require full-proof futuristic policies and strategies for development, and not vision documents and segregated schemes.

Dealing with data

  • As of November 2019, the Internet and Mobile Association of India put India’s active Internet users at 504 million; in 2020, India would register nearly 700 million internet users.
  • We generate a copious amount of data, which, when combined with personal data from individual users in India, demand a new legal and paradigm change.
  • India’s data fiduciary laws are still in their nascent stage.
  • Data Protection Bill based on the recommendation of the Justice BN Srikrishna Committee is still pending with Parliament.

Not treating the symptoms

  • Every day millions of Indians share intricate personal details and data over the internet; a majority of active users are unaware of the threats posed by an open-access to data.
  • Political battles are slowly gaining traction on the internet by harnessing the loopholes in social media.
  • Threats of state surveillance loom over millions of Indians and even now, any legal framework to protect data or privacy is missing.

What we can deduce from the above discussion?

  • The Indian State heavily influences the outcome of the country’s technological development, largely due to the significant presence of PSEs, the dominance of public expenditure in R&D and the type of mixed economy.
  • Therefore timely policy intervention is essential to drive technological development in India.
  • Policies also require time to materialise and bear fruit, and thus far, India’s track record in implementing policies does not inspire confidence.

India isn’t always laggard

  • India has been able to harness the potential of technology in the past by timely policy intervention. India was an early bird to its environmental policies and space technology.
  • The United States set up its Solar Energy Research Institute in 1977 and India set up its Commission of Alternate Sources of Energy (CASE) in 1981.
  • Today, India leads by example in the share of renewable energy in its power generation matrix. India’s space technology is another success story that doesn’t miss the public eye.
  • Time and again, through innovation and research, Indian academia and industries have exemplified its willingness and capacity to change, and all it requires is the desired policy push.


  • With the rapid pace of technological development, the Union government and states cannot set to lose out time, as they have done in the previous decades.
  • India must hunt for new technological innovations, fund research into prospective applications and build policies to facilitate the adoption of new technologies.
  • Ministries and public-funded research bodies must be re-tasked to actively seek out new and emerging technologies all across the globe.

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