Gist of EPW November Week 1, 2021

The Economic and Political Weekly (EPW) is an important source of study material for IAS, especially for the current affairs segment. In this section, we give you the gist of the EPW magazine every week. The important topics covered in the weekly are analyzed and explained in a simple language, all from a UPSC perspective.
TABLE OF CONTENTS

1. National Manufacturing Policy: A Reality Check
2. Climate: The Global Commons

1. National Manufacturing Policy: A Reality Check

Context

The article analyses the National Manufacturing Policy 2011 as it is approaching its target deadline of 2022.

Introduction

• The global financial crisis of 2008 re-emphasised the role of the government in facilitating sustainable industrial growth and employment creation.
• India has always recognised the regulatory and market-based policy interventionist role of the government in facilitating industrial development since the planning era. 
• India introduced major industrial policies in June 1991 that aimed to reduce the entry barriers to Indian industries, embraced open-door policies towards foreign direct investment, and reformed public sector entities that allowed disinvestment. 
• India initiated the National Manufacturing Policy in 2011 to tap the economic opportunities of the sector and attain sustainable economic growth.

National Manufacturing Policy (NMP) 

• The NMP provided an appropriate policy to enhance the global competitiveness of Indian manufacturing. 
• It focuses on the two building blocks: 
  1. technological up-gradation and 
  2. incentives for strategic and special focus sectors. 

• For the short-term goals, the policy focuses on industry-specific programmes to consolidate the stronger engineering base for cost-effective manufacturing in the automobile, pharmaceuticals, and medical equipment industry to retain global leadership. 
• The policy also recommends the implementation of the National Manufacturing Competitiveness Programme that prioritises lending to SMEs to enhance their competitiveness in the short term. 
• For the long term, the policy focuses on implementing specific measures in strategic industries, such as aerospace, shipping, information tech­no­­logy (IT) hardware and electronics, telecommunication equipment; defence equip­ment; and solar energy. 
• The Government of India decided to bring out the National Manufacturing Policy to bring about a quantitative and qualitative change with the following six objectives:
  • Increase manufacturing sector growth to 12-14% over the medium term to make it the engine of growth for the economy. The 2 to 4 % differential over the medium-term growth rate of the overall economy will enable manufacturing to contribute at least 25% of the National GDP by 2022.
  • Increase the rate of job creation in manufacturing to create 100 million additional jobs by 2022. 
  • Creation of appropriate skill sets among the rural migrant and urban poor to make growth inclusive. 
  • Increase domestic value addition and technological ‘depth’ in manufacturing. 

• Major thrust of the Policy:
  • Employment-intensive industries to ensure job creation.
  • Capital goods industries to build manufacturing capabilities.
  • Public sector to fulfil the strategic requirement of the country and build national capacities.
  • Industries with the competitive advantage to create indigenous expertise and cost-effective manufacturing.
  • Small and Medium Enterprises to promote growth and employment generation. 

The Decade Analysis

• NMP aimed to increase the manufacturing growth rate to about 10%–12% in the medium term and expand the share of manufacturing to 25% of the national GDP by 2022. 
• The manufacturing GVA growth rate increased from around 1% in 2011–12 to around 5% in 2015–16. However, it plummeted to -1.07% in 2019–20, which further declined to -3.22% in 2020–21. 
• The share of manufacturing in national GVA followed a similar trajectory. After a brief surge from 17.40% in 2011–12 to 18.36% in 2017–18, it declined to 17.1% in 2019–20, which further decelerated to 16.9% in 2020–21.

Image source: EPW

• NMP aimed to create an additional 100 million jobs in the manufacturing sector with the policy identified labour-intensive industries, such as textile and garment, leather and footwear, gems and jewellery, food processing as potential labour absorbers. 
• The Indian manufacturing sector experienced a net job loss of 14,70,000 between 2010–11 and 2017–18. 
• Within the aggregate manufacturing, the identified labour-intensive industries, which were considered to be the potential employment generators, witnessed job destruction to the tune of 17,31,000 and 6,07,000, respectively. 

Image source: EPW

• NMP aimed to provide appropriate skills to the rural migrants and urban poor to make manufacturing growth inclusive. 
• The skill-specific trained workforce required in the manufacturing was proposed to be created under four different structures: 
  1. skill-building among a large number of the minimally educated work­force
  2. relevant vocational and skill training through the establishment of industrial training institutes in public-private partnership mode
  3. specialised skill development through the establishment of polytechnics
  4. establishment of instructor’s training centre in each NIMZ. 
• NMP aimed to increase domestic value addition and technological depth in manufacturing.
• The NMP emphasises leveraging the existing schemes and incentives to develop advanced indigenous technologies. 
• It also introduced a new mechanism to promote the usage of green technologies for resource conservation. In addition to this, the government established the Technology Acquisition and Development Fund to acquire appropriate technologies from foreign countries.
• The R&D intensity in India’s manufacturing has been very low (around 2%) in comparison to other emerging economies such as China (Mani 2018). 
• The R&D intensity in Indian manufacturing increased from 1.17% in 2010–11 to 2.41% in 2018–19.
• The acquisition of embodied and disembodied technologies imported from foreign countries demonstrate the level of domestic reliance on foreign technologies.
• The NMP aimed to ensure environmental sustainability, speci­fically energy efficiency and optimal utilisation of natural resources. 
• Besides, leveraging the existing policies on environmental sustainability, the government introduced various regulatory and market-based policy interventions to encourage green manufacturing. 
• It provides monetary and non-monetary incentives for adopting clean and green technologies that improve energy efficiency and conserve resources.
• It prescribed the emission and waste-water discharge standards to promote environmental sustainability in the industry. 
• The policy also focuses on the applications of green technologies in NIMZs. 

2. Climate: The Global Commons

Context

The article highlights the climate concerns and challenges ahead of the world and alternative approaches to tackling climate change.

Introduction

• The historical cumulative global emissions have heated the earth by 1.1% and presently, immediate action is needed.
• The continuous rise in sea levels, uncertain weather changes, cyclones and storms will reduce the habitable parts of the planet. 

India in the Context of Global Emission & UNFCCC

• India is the third largest emitter of CO2 but the per capita share is 1.96 tonnes.
• India represents 17% of the global population, but its historical cumulative emissions are only 4% of the global emissions.
• India has always advocated Common but Differentiated Responsibilities for the world regarding global warming.
• India’s lead role in the United Nations Framework Convention on Climate Change 1992, by introducing Common but Differentiated Responsibilities and Respective Capabilities, paved the way for the principle of equity and climate justice. 
• Common but Differentiated Responsibilities and Respective Capabilities
  • Common but Differentiated Responsibilities and Respective Capabilities is a principle within the United Nations Framework Convention on Climate Change for the acknowledgement of the different capabilities and differing responsibilities of individual countries in addressing climate change.

Conference Of Parties 

• The United Nations Framework Convention on Climate Change came into force on 21st March 1994.
• It has been ratified by 197 countries and is called to have a near-universal membership.
• The countries that have ratified the convention are called the UNFCCC conference of parties.
• The COP is the supreme decision-making body of the Convention. 

COP26

• The COP 26 UN Climate Change Conference took place from 31 October to 12 November 2021.
• India has promised to deliver the following goals:
  • To power 50% of our energy needs from renewable sources.
  • To increase the renewable installed capacity to 500 gigawatts by 2030 from the present 100 GW.
  • To reduce the total emission to 1 billion tonnes from its projected emissions from now till 2030.
  • To reduce the carbon intensity of the economy by 45% by 2030.
  • To achieve net zero by 2070.

Technology Transfer

• In the collective aim of protecting the planet, technology transfer can play a vital role. It would ensure clean production practices. 
• The developed part of the world, which is the historical emitters, should share their clean technology, which they acquired.
• This is the first time that UNFCCC has adapted Technology Transfer to achieve the climate goals.

Challenges for India

• Agriculture is a major part of the Indian economy and the activities in this sector emit methane which is a major greenhouse gas. 
• Livestock emissions make up 32% of anthropogenic methane emissions.
• The aim of cutting down the methane emission may affect the rural economy adversely and hence, there is an immediate need for farmer-friendly technologies to reduce emissions from livestock and bring climate-friendly paddy cultivation practices within the reach of farmers.

Global Commons & Non-Excludability

• The concerns for the climate is a complex problem to solve as there is a conflict of interest between different countries. 
• The net-zero emission pledge is expected to deliver the needs of Climate Change but it does not guarantee any check on the emissions before the target date.
• Any commitment to net zero by India and similar developing countries will not bring a sizeable reduction in GHG emissions unless the United States, European Union, and China fulfil their goals.
• If the Nationally Determined Contributions and revised submissions are achieved, there would be a rise of 2.7% above the pre-industrial levels by the end of the century. 
• The failure of the COP25 was attributed to the poor initiative by the highest polluters.
• An alternative approach to determining the growth curve of emissions could deliver better results.
• We should also engage in practices like climate finance and technology transfer.

Read previous EPW articles in the link.

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