Editorials/Opinions Analysis For UPSC 15 April 2023
Contents
- R&D Policy at a Crossroads: A Challenge for Policy
- Lack of skills prevents farm mechanisation
R&D Policy at a Crossroads: A Challenge for Policy
Context
Finding a balance is crucial for achieving strategic goals and promoting private-sector innovation.
Relevance:
GS Paper-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
Mains Question
How can India’s regional and national innovation systems be strengthened by achieving the ideal balance of public and private R&D spending? Provide some recommendations for accelerating India’s economic growth overall and the pace of innovation. (150 words)
Introduction
- Research and development (R&D) has long been regarded as an important factor in economic growth because it fosters creativity, advances technology, and boosts productivity.
- The public nature of knowledge, an externality of R&D, has led to widespread government intervention in R&D, resulting in positive spillovers in terms of innovation and economic growth.
- In order to strengthen their economies, governments around the world have been increasing their R&D spending.
The Age of Dirigisme: Butter and Guns
- The past of science and technology policies (STP) shows that they haven’t always had economic growth as their only goal.
- In fact, the development of STP over time saw a shift from military applications in 16th century England to civilian needs in 19th century Denmark.
- During the “guns” phase, STP modified property rights and used public procurement as a tool to improve national security.
- The Agricultural University of Copenhagen was founded in Copenhagen in 1856 as a result of the “butter” policies, which simultaneously sought to spread knowledge of dairy techniques.
- In the middle of the 20th century, many nations started to place a higher priority on medical research, while the Soviet Union, China, and Western economies framed their science policies with an eye towards ideological rivalry and national prestige.As a result, basic and applied scientific research was used to advance societal welfare, economic development, and national security.
Laissez-Faire’s Golden Age: Commercialization
- Contrary to popular belief, a phenomenon was also seen in many countries with increased government spending on R&D.
- As government R&D funding was found to be outpacing private R&D investments, the returns to R&D spending showed diminishing marginal returns after a certain point.
- As a result, developed economies and governments adopted a laissez-faire strategy, giving the private sector in R&D a more supportive role.
- A paradigm shift in developed economies began in the 1980s, when the proportion of private R&D spending to total R&D spending began to rise.
- The public conversation about scientific research began to be dominated by the intention of commercialization. Private R&D spending and technological advancement have emerged as key drivers of economic expansion.
India’s Science Policy
- India’s history of science policy began in 1958 with the publication of the Science Policy Resolution, which was followed in 1983 by the Technology Policy Statement, which sought to achieve self-reliance in technology.
- A formal science and technology policy that sought to boost R&D spending only became available in India in 2003.
- The ‘Draught 5th Science, Technology and Innovation Policy (STIP)’ has been released for public review by the Department of Science and Technology (DST) of the Government of India after almost ten years.
- The proposed National STIP, which is currently in draught form, outlines a variety of fiscal and non-fiscal measures to achieve these goals.
- The policy seeks to achieve technological self-sufficiency, foster human capital development, and increase private sector research and development (R&D) spending through a systemic approach. Similar to this, the government of Tamil Nadu launched its R&D Policy in 2022 with the goal of increasing investment in R&D by both the public and private sectors by twofold through practical measures.
The Best Combination of Public and Private R&D
- As state and national governments increase their R&D spending around the world, it is crucial to understand that there is a point beyond which such spending produces diminishing returns.
- Therefore, a balanced distribution of public-private R&D spending is necessary to improve local and national innovation systems.
- Despite having a low per capita Gross Expenditure on R&D (GERD), India is ranked 40th out of 132 countries in the 2022 Global Innovation Index. Governments at all levels, national and local, are increasingly funding R&D without taking part in it directly.
- However, the Central Government must also support local innovation systems by using cooperative federalism to compile information on commercial and public R&D spending.
- Private R&D investment in India is still low, and to increase it, a careful balancing of dirigisme and laissez-faire policies is required.
- The government has put forth a research-linked incentive (RLI) that, if accompanied by precise definitions and standards, could be significant.
Conclusion
- R&D promotes productivity, innovation, and economic expansion. The non-excludable and non-rivalrous nature of knowledge, which is an externality of R&D, has compelled governments all over the world to increase R&D spending in order to boost their economies.
- Effective regional and national innovation systems require a balance between public and private R&D spending. Both Tamil Nadu’s R&D Policy and India’s new 5th Science, Technology, and Innovation Policy are constructive steps.
- R&D investment data collection and analysis, as well as governance of science and technology policy, should be improved to foster innovation and economic growth.
Lack of skills prevents farm mechanisation
Context
An imbalance exists between what the organised industrial sector is producing and what the small and marginal Indian farmers want, according to a white paper published recently by the National Council of Applied Economic Research (NCAER) titled “Making India a Global Power House in the Farm Machinery Industry.”
Relevance:
GS Paper-2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation
Mains Question
What difficulties does India’s farm mechanisation industry face? Give some recommendations for effective and efficient ways to deal with these problems. (250 Words)
Key Highlights
- The National Council of Applied Economic Research (NCAER) is the largest and oldest independent non-profit think tank for economic policy research in India.
- It was founded in New Delhi in 1956 and is one of a small number of think tanks worldwide that combines in-depth data collection capabilities with rigorous analysis and policy outreach.
- In India, farm mechanisation is at 40–45 percent, which is still low compared to the rest of the world; in the US, it is 95 percent, in Brazil, 75 percent, and in China, 57 percent.
- NCAER has analysed the non-tractor farm machinery industry from both demand and supply side perspectives, bringing out the challenges in the sector, and recommending measures & reforms in their report.
Farm Machinery Industry
- The Farm Machinery Industry is a sector of the economy that manufactures and provides a wide range of tools, machinery, and equipment for use in farming and agriculture, including ploughing, planting, harvesting, and other tasks.
- The industry includes both small-scale and large-scale farming equipment, and these farm machines are made to increase productivity and efficiency in farming activities.
Challenges on both the demand and supply sides include:
- Inadequate Information and Awareness: Farmers do not have enough knowledge of technology and machinery management.
- As a result, they frequently choose subpar machinery, which results in a wasted investment.
- Skills Shortage: The industry is caught in a low-equilibrium trap as a result.
- Village craftsmen, who are at the bottom of the industry’s pyramid, make up the largest group and are primarily responsible for supplying, maintaining, and fixing farm machinery for Indian farmers.
- Micro, small, and medium-sized businesses (MSMEs) struggle with a lack of skilled workers on the supply side.
- Semi-skilled workers frequently produce agricultural machinery and tools without the proper tools.
- Small-scale fabricators have very few qualified supervisors to keep an eye on quality.
- It can be difficult to find qualified people to test machinery.
Krishi Vigyan Kendra (KVK)
- A Krishi Vigyan Kendra (KVK) is an agricultural extension centre in India that is connected to a regional agricultural university and acts as a conduit for farmers and the Indian Council of Agricultural Research to apply agricultural research in a real-world setting.
- Each of India’s 11 Agricultural Technology Application Research Institutes (ATARIs) has jurisdiction over one or more KVKs.
- A KVK may be established under the auspices of a number of host organisations, including agricultural universities, state agencies, ICAR institutes, other academic institutions, or NGOs.
- Approximately 725 KVKs are currently employed across India.
- To test new agricultural technologies, a KVK must possess land measuring about 20 hectares.
Agricultural Skills Council of India (ASCI)
- The Ministry of Skill Development & Entrepreneurship (MSDE) oversees the activities of the Agriculture Skill Council of India (ASCI), a Section 8 not-for-profit organisation.
- Specifically at a time when the nation’s agriculture is experiencing stagnant growth, exodus of quality manpower to other sectors, changing climate with increased variability, and skill gaps among farmers, wage workers, self-employed, and extension workers, ASCI is assisting in nation building through skill development in agriculture.
Need of the Hour:
- To address demand-side issues, extension programmes must be strengthened.
- Young farmers, owners, and operators should be given responsibility for training in the selection, use, and maintenance of farm machinery. This responsibility should fall to state agricultural universities, ICAR and other institutions with tractor training facilities, Krishi Vigyan Kendras, and industry (through their dealers).
- They ought to also give details on mechanisation advancements, such as the availability of more advanced farm machinery for various uses.
- The front-line demonstration programmes for farm equipment need to be improved.
- Handheld training for users of new farm equipment may promote the adoption and extension of farm power.
- To address skills shortages on the demand side, the Agricultural Skills Council of India should work at the district level; public-private partnerships with Custom Hiring Centres may be particularly helpful.
- Industrial Training Institutes (ITIs) can be used to fill skill gaps in repair and maintenance, and ICAR institutes can offer short courses that address skills shortages on the demand side.
- The private and industrial sectors may promote service centres at the regional and state levels.
- This will eliminate the need for every farmer to own equipment and acquire the necessary skills to operate each piece of machinery.
- Each centre is also capable of renting out equipment with the bundled services.
- These service businesses will also give the area’s educated youth jobs.
- On the supply side: o The District Industries Centre should collaborate with regional industrial clusters to enable ITIs to offer pertinent courses that incorporate the most recent technical know-how and abilities.
- Industrial clusters found in tier-II and tier-III cities will greatly benefit from dual vocational skilling programmes.
- It may be advantageous for the youth if MSMEs take advantage of the Central Government’s Apprentices Policy.
Conclusion
India has the potential to, within the next 15 years, become a production and export centre for non-tractor farm machinery if the suggested measures are carried out effectively and efficiently.
