12 Sep 2023: UPSC Exam Comprehensive News Analysis

E. Editorials

Category: SOCIAL JUSTICE

1. Ridding India of food insecurity

Syllabus: GS-2, Issues relating to Poverty and Hunger

Prelims: State of Food Security and Nutrition in the World Report, Food and Agriculture Organization (FAO), Green Revolution

Mains: Measures to address food insecurity in India, Need for a second Green Revolution

Context

• There is a need for a second Green Revolution in India to address the issue of rising food prices and improve agricultural productivity to ensure food security for all. 

Is nutritional food becoming costlier for Indians? 

• The rise in food prices has been steadily increasing since 2019, with a significant acceleration in recent years, reaching an alarming 11% annual inflation rate in July of this year. 
• Continuing high food price inflation implies that vulnerable sections could be facing hardship in consuming adequate nutritional food.
• According to the ‘State of Food Security and Nutrition in the World’ report by the Food and Agriculture Organization (FAO), an estimated 74% of India’s population cannot afford a healthy diet.
• A study found that the cost of preparing a thaali at home in Mumbai has risen by 65% between 2018-2023, while manual worker’s wages increased by 38% and salaried worker’s wages increased by 28%.
• According to the latest National Family Health Survey, over 50% of adult women in India are estimated to be anaemic, suggesting that the FAO’s finding is plausible.
• Reduction in purchasing power could lead to a decrease in food consumption and an increase in anaemia cases.

Why is there a need for a second Green Revolution? 

• Macroeconomic policy (for example, the tuning of repo rates by the RBI) has proven to be ineffective in managing food inflation stemming from the supply side.
• Demand-side measures such as cash transfers and priority lending are insufficient policies to contain the rising price of food.
• To address this issue, it is necessary to intervene on the supply side to ensure that food is produced at a steady price by raising the yield on land.
• The first Green Revolution, in the 1960s, was successful in making India self-sufficient in food, through high-yielding seeds, cheap credit, and assured prices through procurement.
• However, there were a few drawbacks such as the overuse of chemical fertilizers, reliance on procurement prices instead of productivity increases, and a focus on cereals rather than pulses.
• A second green revolution to address the issue of rising food prices and to lower the cost of production should include: 
  • Yield-increasing interventions on farms to lower the cost of production.
  • Irrigation extended to 100% of the net sown area.
  • Increased ease of land leasing to make mechanization feasible. 
  • Accelerate the agricultural research and extension services to farmers. 

Way forward: 

• Public expenditure on irrigation should be increased and properly managed to avoid waste and diversions of funds.
• Fragmentation of land holdings should be addressed through solutions such as leasing to increase productivity.
• Public agricultural research institutes need to be revitalized to play a key role in developing and disseminating innovative farming techniques.
• Extension services should be revived and strengthened to help farmers adopt best practices.
• All of these initiatives should be integrated into a program aimed at significantly increasing protein production in India.
• State governments must work closely with the central government in the spirit of cooperative federalism to implement these programs and take ownership of enhancing agricultural productivity.
• Private enterprises can also play a role in achieving the food security goals with innovation and infrastructure creation, but their approaches must be environmentally sustainable.

Conclusion: 

• Addressing malnutrition and ensuring access to healthy diets for all Indians requires a multi-faceted approach that includes ecological security and should be the most important task of economic policy over the next few years. 

Nut Graf: Rising food prices and malnutrition are major challenges facing India. A second Green Revolution is needed to address these challenges by increasing agricultural productivity, improving access to healthy diets, and ensuring food security for all.

Category: INTERNATIONAL RELATIONS

1. The signals from this ‘Made in China’ smartphone story

Syllabus: GS-2, Effect of Policies and Politics of Developed and Developing Countries on India’s interests

Prelims: Deep Ultraviolet (DUV) and Extreme Ultraviolet (EUVs) lithography tools, Kirin 9000 processor

Mains: US-China Rivalry, Chip War between the US and China, Opportunities for India’s Semiconductor Industry

Context: 

• Huawei, a Chinese smartphone company, has launched the Mate 60 Pro, which features the Kirin 9000 processor. This processor was made using Semiconductor Manufacturing International Corp (SMIC)’s second-generation 7nm fabrication technique.
• This development demonstrates China’s capability to manufacture a 7nm chip with big implications for China’s strategic and commercial interests. 

What are the challenges for China’s dominance in semiconductor technology? 

• The fabrication techniques used in the manufacturing of these processors are inefficient, resulting in a low wafer yield (less than 50%) compared to Taiwan (over 90%). Yield is the actual number of wafers produced to the total numbers of wafers that were put into the fabrication system. The higher the yield, the higher the productivity.
• China’s process is expensive, up to 10 times the cost of other players in the market, making it uncompetitive.
• The 7nm fabrication technique represents the limit of China’s capabilities with available Deep Ultraviolet (DUV) lithography tools, which are less advanced than the Extreme Ultraviolet (EUVs) tools used by the US and its allies. These tools are used to etch patterns with precision in chip design. 
• The use of DUVs leads to a lower yield due to the need for multiple rounds of layering on the wafer.
• Uncertainty exists on whether Huawei-SMIC can produce the current chipsets on a large scale due to restrictions on China’s access to DUVs.
• Due to the sanctions imposed by the US and its allies on China’s semiconductor industry, failure to commercialize the product could impact innovation and long term competitiveness. 

Comparison of semiconductor industry in the USA and China

• Functional Specialization: 
  • The US-led ecosystem is part of the most advanced economies in the world, allowing for functional specialization. It is more distributed in nature, with different countries specializing in different aspects of the chip production process, such as EDA tools, lithography tools, specialized materials, and fabrication.
  • China, on the other hand, aspires to become self-sufficient in each segment of the value chain, which is highly capital-intensive and difficult to achieve. It is also relatively isolated, limiting Beijing’s potential with finite resources.
• Cost Distribution
  • The US-led ecosystem can distribute costs among participating countries making it easier to compete with a larger pool of resources.
  • China is under pressure to perform and deliver with limited resources and in an authoritarian system, limiting the country’s appetite for absorbing failures.
  • Innovation thrives best in a free environment, which is lacking in China’s system.
    
• Human Capital
  • The US-led ecosystem allows for sourcing talent from diverse regions through its open immigration policy while China relies solely on its national or overseas diaspora.
  • Movement of human capital to China is becoming increasingly difficult due to deepening rivalry in high-tech sectors.

Conclusion: 

China might have achieved some victories in specific areas of tech development but replicating such success across all domains and throughout the value chain is unlikely given the limitations of its isolated tech ecosystem and resource constraints.

Nut Graf: China’s breakthrough with the 7nm chip is a significant development in its semiconductor industry. However, China faces challenges in achieving dominance in this sector, including low wafer yields, high costs, and restrictions on access to advanced technology affecting its long-term competitiveness.