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The Hindu Notes for 21st November 2018

Topic Discussed: The Hindu Notes of 21st November 2018

Make it the Indian way

As industrial 3D printing transforms manufacturing, the country must adapt to additive technologies

  • If ‘Make in India’ is to succeed, it needs to encompass ‘Make it the Indian Way’. It need not emulate mass production technologies, fuelled in Detroit by massive capital investment or in Beijing by cheap labour. We are fortunate to be in a historic moment when the manufacturing sector is about to go through a transformation wrought by disruptive technologies — we have to find a way of making it work in India’s favour rather than against it.
  • Getting a measure

  • Industrial 3D printing has begun to transform manufacturing in Western countries. The 3D printing has not yet entered our everyday lexicon, and even people who have heard of it view it as a toy technology that geeks play with, creating prototypes of robots using small machines that create moulds using materials such as plastic and photosensitive resins. Part of it must be the name, whoever heard of serious manufacturing using a printer! Rename this to “additive technology” and think of Ford Motors cutting down its cost of creating a new car prototype from six months and several hundred thousand dollars to four days and $4,000, and you begin to see its power.
  • Traditional manufacturing of mechanical parts involves making a mould and then stamping out parts by thousands every day. The equipment to make these parts and moulds is expensive, thus the cost of the first hundred units is high. Per unit costs decline only when they are mass produced. Because of limitations of how this technology works, one typically builds many small parts, which are later on assembled on an assembly line using unskilled labour or robots to build an entire system. Traditional manufacturing leads to high inventory costs of multiple parts that need to be produced and stored before being assembled. This makes the design phase complex and costly, rendering it expensive to redesign to correct initial mistakes or innovate to meet changing consumer needs.
  • In additive manufacturing, the physical object to be built is first designed in software. This design is fed to computerised machines, which build that object layer by layer. The technology is suitable for building the entire system in one go, with hollow interiors without assembly or interlocked parts. Changing features or tweaking shapes is a simple software change effected in minutes. Retooling of machines is not required and each unit can be customised. By eliminating the need to hold a large inventory of parts, set up an assembly line and purchase costly machines, adaptive manufacturing reduces capital and space requirements as well as the carbon footprint.
  • No longer geeky

  • Additive manufacturing started out as a technology for nerds and geeks trying to build an arm of a robot or a body of a drone in their garages. Rapid progress in technology over the last five years has taken this type of machines from using one nozzle and simple resin materials to multiple nozzles, diverse materials and materials with different hardness in the same system. Today it is possible to build an entire shoe, including shoelaces, in a university laboratory. Tomorrow, Adidas and Nike may well start manufacturing them en masse.
  • Although it began as a quick and cheap way of developing prototypes, additive manufacturing has now gone mainstream in developed countries and is beginning to replace traditional manufacturing for many different applications. One recent survey of U.S. manufacturers shows that about 12% have started using additive manufacturing for their products and expectations are that this will result in about 25% of products in the next three-five years. This technology is used to build helmets, dental implants, medical equipment, parts of jet engines and even entire bodies of cars. In some industries, the progress is astonishing. Nearly all hearing aid manufacturers now use additive manufacturing.
  • This technological nirvana carries dangerous implications for developing nations. It decreases reliance on assembly workers and bypasses the global supply chain that has allowed countries like China to become prosperous through export of mass-produced items. This may well lead to the creation of software-based design platforms in the West that distribute work orders to small manufacturing facilities, whether located in developed or developing countries, but ultimately transfer value creation towards software and design and away from physical manufacturing. This would imply that labour intensive manufacturing exports may be less profitable.
  • Opportunities in India

  • Fortunately, this manufacturing paradigm has several features that play to the strengths of the Indian ecosystem. First, it eliminates large capital outlays. Machines are cheaper, inventories can be small and space requirements are not large. Thus, jump-starting manufacturing does not face the massive hurdle of large capital requirement and the traditional small and medium enterprises can easily be adapted and retooled towards high technology manufacturing. Second, the Indian software industry is well-established, and plans to increase connectivity are well under way as part of ‘Digital India’. This would allow for the creation of manufacturing facilities in small towns and foster industrial development outside of major cities. Third, it is possible to build products that are better suited for use in harsh environmental conditions. Products that required assembly of fewer parts also implies that they may be better able to withstand dust and moisture prevalent in our tropical environment and be more durable. Fourth, in a country where use-and-throw is an anathema, maintaining old products is far easier because parts can be manufactured as needed and product life-cycles can be expanded. Finally, maintaining uniform product quality is far easier because the entire system is built at the same time and assembly is not required.
  • For countries that have already invested in heavy manufacturing, this shift to adaptive manufacturing will be difficult and expensive. For new entrants, it is easier to leapfrog. The “Make it the Indian Way” approach we advocate will need public-private partnership and multi-pronged efforts. On the one hand, we need to accelerate research at our premier engineering schools on manufacturing machines and methods and encourage formation of product design centres so that the products built suit the Indian environment and consumers. We also would need government support to provide incentives for distributed manufacturing in smaller towns, and for the IT industry to work on creating platforms and marketplaces that connect consumer demands, product designers and manufacturers in a seamless way.
  • However, a combination of science and art, with a pinch of Indian entrepreneurship thrown in, will allow us to develop a manufacturing ecosystem that will not only allow India to compete with global manufacturing, it will also create products that are uniquely suited to Indian conditions. The Industrial revolution somehow bypassed India, but we have a unique opportunity to catch the wave of the manufacturing revolution if we can learn to surf.
  • Hemant Kanakia is an electrical engineer and high-technology investor. Sonalde Desai is Professor of Sociology at the University of Maryland and Senior Fellow, NCAER. The views expressed are personal
  • Amid institutional decline

    The issue today is whether a dishonest system can be managed honestly

  • Allegations of interference in major institutions have been the big news of late. The ongoing fracas in the Central Bureau of Investigation (CBI) has got out of hand, with the two top officials in the chain of command accusing each other of corruption. The recent pronouncements in the Supreme Court do not promise an early resolution.
  • The fight against widespread graft in the country has been set back. The Deputy Governor of Reserve Bank of India (RBI) has highlighted the serious consequences if there is an erosion of its autonomy. The intervention by the Supreme Court in the CBI issue places a question mark on the independence of the Central Vigilance Commission (CVC) and the functioning of the government as a whole in making key apointments in the CBI. The CBI controversy has also left an imprint on the Intelligence Bureau and the Research and Analysis Wing.
  • The list of institutions in decline is long. The ongoing #MeToo movement has exposed the sordid goings-on in large swathes of the media and the entertainment industry. Earlier too, the Election Commission was under a cloud over the announcement of election dates, action taken against some Delhi legislators and the functioning of electronic voting machines. The functioning of the judiciary itself has been a cause for concern. Then there is the attempt to introduce Civil Service Rules in Central universities, an attempt to erode the autonomy of academics. The crisis in the banking system and the huge non-performing assets that overrun their balance sheets impact the viability of the financial system.
  • The present and past

  • The storm is gathering pace. The decline of institutions in India is not recent. In 2016, demonetisation brought out the centralisation of power and a lack of consultation with important sections of the government. The chaos prevailed for months and about 99% of the money came back into the system, thus defeating the very purpose of carrying out this draconian measure. Those with black money escaped and those who had never seen black money were put to great hardship. The RBI and the banks were marginalised.
  • The CBI imbroglio is no surprise. Political interference in the agency and corruption among its ranks have been talked about but are hard to prove. The Supreme Court, in 2013, even called the agency a ‘caged parrot’ but this was not concrete enough. The political Opposition when feeling the heat of various investigations has always accused the agency of being its ‘master’s voice’. Now that the spat within has come out in the open, with a spate of accusations, these fears have become all the more credible.
  • A deep rot

  • The rot has set in deep, with charges of government manipulation in crucial cases. With the Vineet Narain case, in the 1990s, the Supreme Court tried to insulate the CBI from political manipulation by placing it under the supervision of the CVC. But that has not worked since the independence of the CVC itself has been suspect.
  • Why is the autonomous functioning of the CBI and CVC such an irresolvable issue?
  • The CBI is an investigative agency largely manned/controlled by personnel drawn from the police force. And this is a force used to doing the bidding of the ruling dispensation. The rulers themselves commit irregularities in the routine and depend on the police to cooperate with them. The rulers cannot pull them up in their own self-interest.
  • In the police, there are ‘wet’ and ‘dry’ duties where money can be made in the first but not in the second. Being on the right side of the political masters is lucrative. While earlier there may have been few such officers doing political bidding, now it seems they dominate.
  • It is akin to having a ‘committed bureaucracy’, an idea floated during the Emergency. The issue is: Committed to whom? To the national interest or to the rulers?
  • The rule of law is being subverted and illegality being committed on a large scale. Growth of the black economy is a measure of illegality. It has gone up from 4-5% of GDP in 1955-56 to the present level of 62%. It has become ‘systematic and systemic’ and eroded institutional functioning all across the board. This has damaged institutions.
  • Institutions provide the framework for individuals and systems to function. Their breakdown leads to a breakdown of societal functioning — democracy is weakened, the sense of justice is eroded and the Opposition is sought to be suppressed. The tainted not only survive but also get promoted and damage institutions.
  • If institutions are strong, they are respected and it becomes difficult to manipulate them. It enables the honest to survive. In strong institutions, individual corruption is an aberration but when they weaken, it becomes generalised. It leads to individualisation, illegality becomes acceptable and the collective interest suffers. Even an ‘honest’ Prime Minister tolerated dishonesty under him. The dilemma is, can a dishonest system be managed honestly?
  • ‘Pollution is now a political subject, that has been its big success’

    The Director General of The Energy and Resources Institute on what to expect from the Katowice Climate Change Conference and how to tackle pollution

  • Ajay Mathur is the Director General of The Energy and Resources Institute (TERI). He is also a member of the Environment Pollution (Prevention and Control) Authority and has been part of India’s negotiating team in earlier editions of the United Nations-convened Conference of the Parties (COP). In this interview, Mr. Mathur says we shouldn’t expect a big bang result next month at the Katowice Climate Change Conference, and explains how the air pollution problem is not insurmountable. Excerpts:
  • Next month, the COP will convene in Katowice, Poland, to finalise the rule book on how the 2015 Paris commitments should be implemented. Do you expect major headway?
  • The 2018 COP was always seen as the one where the rules for Paris would be put in place. Over the years there’s been a lot of discussion on that. At several meetings leading up to the COP, we’ve seen a lot of convergence on the rules regarding transparency (mainly on how nations will report their greenhouse gas emissions and mitigating actions) such that when you’re reporting, it is credible. This was a group of countries that was led by India’s Environment Secretary and was very successful as well as able to close discussions and get people together.
  • However, transparency is just one aspect of this rule book. There is still a huge degree of difference on issues related to financing. The developing countries believe that they cannot have certainty of action till international financial flows are known. So, they have to be reported ex ante (based on forecasts rather than on actuals). The developed countries don’t like it at all.
  • But isn’t this what the dialogue in every COP is usually about: Where’s the money that has been promised: about a $100 billion dollars annually by the developed countries, until 2020?
  • It’s absolutely clear that if you focus on this subject alone, there’s bound to be disappointment. I can’t see either the developed countries or the developing countries moving on this. But the point is that there are newer areas, like transparency, where we have moved ahead. The issue is, how will the political leadership be taken in Katowice, so that we can have an agreement on a rule book? This agreement could well be, say, here’s the core of the rule book and here are five other things that need to be agreed on and we we will do it over the next, say, one year, because Paris doesn’t kick into place until 2020. It could even mean that a rule book will be ready only in 2020. We were very ambitious and thought it would be ready in 2018 but we aren’t, so that’s fine.
  • But wouldn’t firming up a rule book mean that countries would have to agree to fixed targets on setting greenhouse gas emissions limits for themselves?
  • Absolutely not. As of now, the convergence is on transparency: How we will collect data, report the data, be sure that the reported data meet an acceptable level of quality control. If we agree to move ahead on obligations of the Paris deal, this is how you would do it. It is more about building trust that all of us are using the same kind of data. There may be differences in the (duties of) developed and developing countries but at least the elements are in place. We should go to Katowice expecting that at least the elements of the rule book are in place.
  • Through the years, there’s been concern that whenever India attends high-level meetings, it lacks its own empirical data and so ends up getting snowed in by modelling and projections made by others. Can the convergence towards transparency address this?
  • I would dispute that Indian experts are ‘snowed in’ by others’ data. What is true is that the level of analysis we do at a global level is more limited than what is done by others. What transparency will mean for us and other countries is that the basis for future projections and the basis for seeing whether we are actually achieving what we have promised is going to be much more superior than in the past. There were years in which we weren’t sure of data from many countries. Katowice is not a Paris but an essential meeting to operationalise Paris. There’s another thing in the rule book that relates to ‘stocktake’. It’s been decided that every few years from 2022, we will see how the world is doing as far as their actions are concerned. Are they on track to achieve what is promised? The stocktake will tell us that. As you can imagine, if we have poor data, we will make poor decisions.
  • Among India’s commitments is to achieve 100 GW of solar power by 2022. Several reports seem to suggest that we will fall short, particularly due to the slow uptake in rooftop solar. Will that be a major problem? Do we have time to fix this problem?
  • One part of the answer is that it is possible that 60 GW of grid-connected solar photovoltaic (like in solar farms) can become large enough to meet the target. With rooftop solar there are a large number of implementation problems and policy issues that we are still trying to understand. Only a few years ago, our concept of solar PV, especially in rooftop solar, was that it would be used only in isolated places where electricity would be available sporadically. Now, we have a situation where it is possible that by the year-end or next March, every home in the country will be able to access a wired connection. As per the Saubhagya scheme, I believe 94% of the homes are already connected. This has a different meaning for micro-grids, or mini-grids, because they were envisioned as being completely isolated. Now it means that it will take care of local power supply needs and anything additional would go into the grid, and if you need more power, you take it from the grid. In other words, it becomes grid-interactive. This means a completely different technical and business model.
  • Now, how can we operate this within a grid-operated system? Our meters are built for a one-way flow. We now need safety and isolation equipment that can be built for a two-way flow. We are used to electricity being produced at a higher voltage and being ‘stepped-down’ to come into your house. Now we need the lower voltage current produced in the house to be ‘stepped-up’ for giving back to the grid. All these things need to be put in one place. The other aspect is that electricity companies will now say, everybody wants to buy from me at the same time and sell to me at the same time. This means a huge amount of capacity for meeting night-time loads; and during the day, when electricity companies produce a lot, they have to buy. So, we also need to put all these things in place and have diversity in the rooftop solar grid system. These are things we are learning.
  • Then there are problems with urban planning. Say, I have a system in place and another taller building comes up which blocks out my solar system. What happens to my investment? Eventually it will all work. We are trying out 10 different things and two will work and become the ruling models.
  • TERI and the Automotive Research Association of India presented a study earlier this year that showed that cars and two-wheelers together contributed about 10% of the pollution caused by the transportation sector, which contributes 28% of the overall winter pollution load. This is not a small number. However you haven’t suggested a congestion charge or reigning in private vehicles during emergencies.
  • We need solutions that are necessary for Delhi. Let’s look at where the pollution comes from. One of the fastest-growing components is secondary particulate matter. They are not emitted as gases but become particles once they are in the atmosphere for some time. There are ammonium-based gases that are emitted and become particulate matter. If you ask me, the single largest impact is if we can address fires (biomass fires which also include fires from burning wood or for cooking). If we could completely switch over to gas and ensure uninterrupted supply of electricity, it would make a massive difference to pollution.
  • We just celebrated Diwali. There was a lot of hope for reduced emissions vis-à-vis the Environment Ministry’s pollution-restraining drives. However, we saw a blatant violation of the Supreme Court order on crackers. Don’t you think a lack of implementation is the key cause of Delhi’s air pollution problem?
  • The Supreme Court had said that crackers were only to be allowed from 8-10 p.m. That too green crackers. The data show that the day before Diwali was a clear day. There were hardly any crackers. Come Diwali evening and — just look at the data — crackers were lit with a vengeance. A friend who did this analysis said that the crackers burnt on Diwali night were no less than last year. And all illegal, as there were no green crackers. What this suggests is that private lighting of crackers from 8-10 p.m. is also a problem. Even if you have crackers that reduce emissions by x% but you have more crackers, reduction will be more than compensated. You will have the same problem.
  • We need to change the way crackers are used. We need to agree on an overall cap. If you want some equity around it, you could say that in each area there would be a locally organised community function and each of them would be given a permit to buy x amount of crackers. We need to control supply.
  • You’re a member of the Environment Pollution (Prevention and Control) Authority. How effective has this agency been as an implementing body to address sources of pollution?
  • First of all, the EPCA is not a direct implementing body. It can direct agencies to take steps, point out to them that there’s a problem emerging, and fix it. If rules are flouted, the committee can issue directions to check activities in the National Capital Region. Those are its strengths. I’m a new member of the EPCA and have only been able to attend one meeting. I see that the EPCA will increasingly focus on the kinds of action that can lead to change that is felt here and now. We have an extremely active chairperson who has got huge experience in this area and there is no reason to think that he cannot lead a larger group of people. I would like more real-time data to be available to the EPCA to help with its decision-making.
  • Has the government become better at addressing pollution or is it restricting itself to legislation?
  • What has changed is that pollution has entered into the public consciousness in a big way. Pollution is also now a political subject and that has been its big success.
  • The Maine example

    The preferential voting system ensures a truly representative winner

    the Maine Example
  • The recently concluded mid-term elections in the U.S. received a lot of attention as the opposition Democrats managed to decisively bring about a “blue wave” to capture the House of Representatives flipping at least 37 seats in the process from the Republicans. One such win in a tiny district in Maine was particularly significant. Democrat Jared Golden won 45.5% of the vote. He was runner-up to Republican Bruce Poliquin (46.2%). The rest was won by an independent. But Mr. Golden triumphed in the district after a run-off second round where second preference votes were tallied in his favour, helping him trump his Republican opponent.
  • The electoral system used exclusively in Maine in House polls features not just a choice of the candidates, but also a preferential ranking of them. A voter can choose just one candidate, but also rank candidates in an order of preference. If a candidate wins 50% of the mandate plus one vote, she is declared the winner. But if the candidate falls short of this threshold, the candidates are ranked again based on their second choices. And if this still falls below the threshold, the contest moves on to the third round, and so on.
  • Clearly, voters who supported the independent candidate felt that the Democrat was a better choice than the Republican and this helped Mr. Golden win. Nobel laureate Amartya Sen had lauded the preferential voting system before it was implemented in Maine, as the ordered voting allows for a true majority choice to emerge, both in the form of the candidate chosen as well as the reflection of the views of the majority, unlike the simple first-past-the-post (FPTP) system. In the FPTP system, the leading candidate can win an election despite winning a minority of the votes. This happened in the U.S. in 2016, when Donald Trump won the presidency despite winning less than 50% of the vote, thanks largely due to the nature of the electoral college, but also due to third candidates acting as spoilers in several seats in swing States. If given a choice, it could be argued that the voters who chose the third candidates could have chosen Hillary Clinton over a more polarising figure like Mr. Trump.
  • India too follows an FPTP system. In several States with a high number of effective parties in particular (U.P. and Bihar, for instance), parties which secure less than 50% of the vote tend to win substantive majorities. In the past, this was mitigated at the Central level by the need for coalitions — even if the leading party in the election fell short in vote share terms, it had to get the support of regional parties to go past the halfway mark in seat terms. This rendered the system a truly representative one. In 2014, however, the NDA won the majority of seats despite a vote share of only 38.5% and little accretion of outside support after the election. Even if the preferential voting system is more complicated than the FPTP system, it is worth considering as a just alternative in the longer term.
  • The writer is Associate Editor of The Hindu
  • Give and take

    The Centre and the RBI did well at the board meeting to address each other’s concerns

  • After the heat and dust of the last one month, the board meeting of the Reserve Bank of India on Monday turned out to be muted and professional, as it should have been. Any summary and precipitate action by the Centre to have its way would have created more problems than it solved, apart from it not going down well with the markets. The decisions taken by the board address the concerns of both the Centre and the central bank, though on balance it appears that the RBI carried the day. Two of the biggest concerns of the Centre where it was expecting an immediate resolution — relaxation of the Prompt Corrective Action framework on 11 public sector banks and provision of liquidity for non-banking financial companies — will be addressed at a future date. The first one has been referred to a department of the RBI for examination, while no decision seems to have been taken on the second. In addition, the Centre’s attempt to tap the RBI’s rich reserves has also been staved off for now, with the matter left to be decided by a committee set up exclusively for the purpose. This is as it should be. Given that the membership and terms of reference of the committee will be jointly decided by the Centre and the RBI, there is little scope for either side to complain of bias. The RBI has been transferring all of its surpluses to the Centre in the last five years based on the recommendations of an earlier committee led by Y.H. Malegam. Given this, it is unclear what more the new committee can possibly recommend on future surpluses, unless of course it is allowed to go into sharing of the reserves that now exist on the RBI’s balance sheet.
  • The central bank partially yielded to the Centre on two other issues — the Basel capital framework for banks and easing credit flow to micro, small and medium enterprises (MSMEs). The RBI didn’t concede the demand for alignment of the capital norms to Basel (they are higher now), but by pushing back the deadline by a year for increasing the capital buffer, it has freed up funds for banks to lend. Again, by permitting debt recast for MSME borrowers of up to ₹25 crore, the RBI has attempted to address their credit concerns, which was one of the major demands of the Centre. Clearly, there was enough give-and-take in the meeting that left both sides with the feeling that they had gained something. At Monday’s meeting the board turned hands-on probably for the first time in recent memory, from being just an advisory body. That the meeting went on for over nine hours clearly indicates that there was an intense exchange of views, which is not a bad thing at all. Differences between the Centre and the central bank must be thrashed out in such a setting, rather than in the media or in public speeches.