Editorial 1: The issue is not about India’s GDP, but its JDP
Introduction
- India’s Gross Domestic Product (GDP) growing in double digits, the Indian economy being the world’s fastest, and also highlighted glowing reports by foreign institutions such as the International Monetary Fund (IMF) and Morgan Stanley. The whole debate among India’s leading economic policymakers has revolved around whose GDP growth was higher (i.e. the National Democratic Alliance or the UPA), or what must be done to achieve higher growth.
The issue is job potential
- India’s economy is growing so rapidly, but the demand for minimum wage work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme also growing fast.
- That is, when India was apparently the fastest growing economy in the world, more and more people were also clamouring for MGNREGA work.
- If the economy is doing well, it should be creating many jobs, which should then lower the demand for minimum wage MGNREGA work. MGNREGA demand should be inversely proportional to economic growth.
- Clearly, there is a big dissonance between GDP growth and its translation into actual jobs and incomes for people.
- Further, even the jobs that are being created tend to exacerbate India’s social fissures.
- People from higher castes constitute nearly three quarters of the formal service sector jobs that GDP growth produces while 80% of workers under the MGNREGA programne are from the oppressed castes of Dalits, tribals and backward castes.
- here is an alarming decline in the number of jobs that are being created with every percentage growth in GDP. This is a function of the poor quality of GDP growth, rapid increase in productivity and extreme automation.
- Thus, it is important to focus on the job intensity of economic initiatives rather than merely chase headline GDP growth.
The Mines and Minerals Bill, India’s future
- The MMA Bill, can be a potential booster shot in India’s economic arm, if administered properly.
- The world is in the midst of an inevitable transition to electric mobility. While electronic chips and equipment are key to this transition, the fountainhead for this change are minerals such as lithium, cobalt, graphite and other ‘rare earths’.
- These minerals are the foundation for the whole electric mobility supply chain which countries such as China are pursuing aggressively.
- China dominates this supply chain through a belligerent geo-economic policy of sourcing, extracting and refining these minerals from various parts of the world.
- Various studies have shown that India’s topography is very conducive to finding similar mineral deposits as found in Afghanistan and Western Australia
- But India has not explored even 10% of its potential mineral deposits below the earth and has mined even less.
- With a coastline that is over 7,000 kilometres long, India’s potential in finding rich strategic minerals can be even greater through deep sea mining.
- However, lack of access to latest mining technologies, environmental concerns and previous incidents of labour exploitation in mines have prevented India thus far from exploring this opportunity.
- The new MMA Bill promises to change that through private sector participation in exploration of strategic minerals including lithium.
Way forward
- It is very important for political leaders to change the nation’s economic discourse and abandon this blind quest for headline GDP growth.
- Economists, technocrats and the IMF peddle GDP growth, since it is a convenient measure to compare what they can forecast through excel models on their computers.
- For political leaders who are entrusted with people’s real welfare, it is critical not to fall prey and question whether such headline GDP delivers true economic prosperity to all its people.
Editorial 2: A ‘fab’ way to conduct India-Japan tech diplomacy
Introduction
- India and Japan, in July 2023, agreed to collaborate on semiconductors in a bid to create a more resilient supply chain for this critical technology and work together for the joint development of the semiconductor ecosystem. The partnership will focus on five areas: ‘semiconductor design, manufacturing, equipment research, establishing resilience in the semiconductor supply chain, and talent development’, paving the way for government-to-government and industry-to-industry collaborations.
An alignment of policies
- The deal comes in the wake of the rapid expansion in the semiconductor industry, particularly the importance of specialised chips, which has prompted the need for growing the pool of talent available in the industry alongside increasing the number of semiconductor fabrication plants (fabs).
- The partnership fosters the exchange of technical knowledge, research, and innovation between the Indian and Japanese semiconductor industries, facilitates technology transfer, and enables Tokyo and New Delhi to stay at the forefront of semiconductor advancements.
- Both nations have aligned their policies to support semiconductor manufacturing and research.
- India’s “Make in India” initiative and Japan’s “Society 5.0” vision share the goal of technological self-reliance and innovation-driven growth.
- Bilateral agreements have been signed to promote technology transfer, cooperation in semiconductor research, and reciprocal trade in semiconductor-related products.
- The collaboration stands as a testament to the power of strategic alliances and technological synergy.
- Both nations recognise the critical importance of semiconductor technology in driving innovation, economic growth, and national security. Japan, with its advanced semiconductor industry, has long been a global leader in chip manufacturing and research.
The issues and the correct approach
- Supply chain disruptions and geopolitical tensions, which are of particular significance in the Indo-Pacific region, have underscored the need for diversifying semiconductor supply chains and cross-country collaboration.
- Joint research initiatives enable the pooling of resources and expertise to tackle complex challenges in semiconductor design, manufacturing processes, and materials science.
- This collaborative approach accelerates both innovation and the development of cutting-edge solutions.
- The partnership also emphasises human resource development through skill exchange programmes, workshops, and training.
The American partnership
- India’s strength in semiconductor design and packaging offers scope for it to join forces with leaders in the industry.
- The agreement with Japan follows close on the heels of the charting of a technology partnership for the future between the United States and India which also covers investment, innovation, and workforce development, facilitating the long-term strategic development of complementary semiconductor ecosystems.
- As part of the agreement with Washington, New Delhi is set to sign an agreement with Georgia Tech University.
Way forward
- Both agreements indicate the confidence placed in India by the two Quad countries (The Quad has India, Japan, Australia and the U.S.) and also signal the coming of age of India’s own capabilities in the development of semiconductors and related technologies.
- By combining Japan’s technological prowess and India’s innovation and design capacities, the collaboration on semiconductors paves the way for a future characterised by advanced electronics, enhanced connectivity, and a shared commitment to pushing the boundaries of technological excellence.
Conclusion
- The India-Japan partnership is poised to play a pivotal role in shaping the global semiconductor landscape. As technology continues to evolve, their collaboration will remain dynamic, addressing new challenges such as semiconductor miniaturisation, AI integration, and quantum computing. This partnership will also have far-reaching implications for the global technology ecosystem and the dimensions of geopolitical partnerships in the Indo-Pacific.
